Wage wars: How the MLB's middle market changed the game

By Adam Cancryn

A new group of teams have pushed their way into the MLB's upper ranks by handing out outrageous contracts.

At 10 years and $225 million, Joey Votto is the latest in a string of MLB players joining the ranks of the mega-rich this offseason.

This year's class is a distinguished bunch. Albert Pujols (10yrs/$240M) and Prince Fielder (9yrs/$214M) were due for a big payday, while Matt Cain (6yrs/127.5M) and C.J. Wilson (5yrs/$77.5M) cashed in on their consistency over the past few years. Lost in the flurry of the recent eye-popping numbers are the sizable deals signed earlier in the year by players like Jose Reyes (6yrs/$106M) and Yu Darvish (6yrs/$56M plus a record $51.7M for negotiating rights).

However, this group is notable not just for their on-field accomplishments, but for the seeming ease with which they secured the kind of long-term, double and triple-digit contracts previously reserved for game's most elite players. Since Alex Rodriguez broke the $200 million barrier in 2000 and became baseball's new financial barometer, payouts had arranged themselves into a logical, top-down system. This offseason has upended that, and touched off the MLB's latest wave of wage inflation.

Baseball has undergone this kind of chaotic correction before. Usually, there's a single driver behind a coordinated jump in salaries: the advent of free agency, or the increasing use of arbitration, or the Yankees deciding they just had to have a player. But until now, those jumps obeyed a few rules:

1. The teams with the most money set the new bar.
2. Only the very best (say, the top three) players can force a team to radically move that bar.
3. When that bar does move, it's because the richest team and the best players have decided to join forces.

But this year has altered those generally accepted principles. The Yankees, Mets, Red Sox and Cubs largely shied away from the big-ticket signings, due to either a lack of need or financial means. Outside of Pujols, none of the signees are among the top five players in the league (Fielder is arguable, but has never finished in the top 10 in Wins Above Replacement). As a result, the matches that were made this offseason were not necessarily indicative of a wage-shifting year.

Nevertheless, there was the money. All those piles of money. To Pujols, Fielder and Votto, $200 million plus. The No. 2 pitcher on a team full of aces got $127.5 million, while the lefty with just two years experience as a starting pitcher got $77.5 million. A shortstop with balky wheels? $106 million. And don't forget $107.7 million total for the import with no MLB experience, despite history pointing to Japanese pitchers' struggles in the big leagues.

The middle to upper-middle market teams took over the offseason, and most wielded their newfound power by signing great but not best-of-the-best players to ridiculously long and expensive contracts.

The reaction among fans has been predictable, and no doubt even the Yankees and Red Sox shook their heads at the idea of paying Votto $25 million in 2023 or committing to a 10-year, $10 million personal services contract for Pujols after his original 10-year, $240 million deal expires. But baseball, of all sports, favors the bold, the front office willing to gamble big to win even bigger. And at least in this case, there are some indications that these big contracts are educated gambles.

By handing out exorbitant contracts now, these teams are betting that a few things will happen in the future. The first, as originally outlined by Fangraphs, is that they'll be able to secure a lucrative television contract at some point down the road. The Angels' deal with FOX allowed them to start spending big in the first place, and the Yankees and Mets, among others, have profited from their media arrangements for years. The price companies are willing to pay for exclusive game rights is climbing, and as News Corp. and other newer players commit more resources to the medium, the exclusivity price tag could skyrocket. Sign that kind of lucrative deal, and payroll instantly expands, allowing a team to absorb whatever multimillion-dollar promises they've made.

Apart from getting outside financial help, these teams are buying into the concept of a first-mover advantage. Decades-long, $200 million contracts as the new normal for elite players is shocking now, but baseball has shown a willingness to quickly recalibrate its standards. Just as $100 million contracts have become routine over the past decade, it's conceivable that $200 million could become the new benchmark over the next few years. By the time Votto or Pujols reach the final years of their deals, the money could be right in line with what others of their caliber are paid. As far as Reyes, Cain and the others, they could prove to be downright steals. In any business, there are often disconnects and inefficiencies that can be exploited by being the first to act. These teams were willing to endure some criticism on the front end for the potential payoff down the line.

Of course, each of these teams all face some sort of pressure to generate that payoff sooner than later. The Angels are nouveau rich; a decade ago they ranked 16th in payroll, last year they were fourth. With that money comes the expectation of star players and championship trophies.

The Tigers have always had the talent to stay near the top of the league, but lacked that one difference maker. Each year they've fallen short has been another prime opportunity wasted. The Reds are similar in that expectations have often gone unfulfilled. Locking up Votto is the first step toward fulfilling that promise.

The Rangers and Giants, meanwhile, are supposed to contend for the World Series again, while the Marlins need to draw fans to their brand new ballpark. Both goals require star power.

Facing those kind of pressures, general managers are more likely to pull the trigger on a large deal, in hopes the early returns outstrip the overall costs. It's the kind of decision that can elevate a franchise or send it into a spiral, secure one's place in history or ensure one's firing.

This offseason has been a generation-defining one for these five teams. Whether the results are spectacular, or spectacularly bad has yet to be determined, but either way, they are already responsible for the latest to shift in way that baseball does business.

Adam Cancryn in an editor and co-founder of Began in '96.