During last year's winter meetings, baseball executives hobnobbing at Las Vegas' Bellagio Hotel were trying to make sense of the broader market. The collapse of
This year? They know it's going to be lousy--and free agent spending is likely to follow suit.
"I see things being about the same or slightly worse," says Chicago White Sox owner Jerry Reinsdorf, who expects to lose some sponsorship dollars again this year.
A year ago, the top-flight free agents CC Sabathia, Mark Teixeira and A.J. Burnett got big contracts (all from the Yankees), while the rest of the market was slow--a record number of players went unsigned into January. This year is shaping up the same way. The big trio of pitcher John Lackey and outfielders Jason Bay and Matt Holiday is less impressive than last year's cream of the crop, though all should get nice deals. So should Roy Halladay, arguably the best pitcher in baseball, who's being shopped by the Toronto Blue Jays a year prior to his eligibility for free agency. He'll undoubtedly cost a big-market team a bundle of young talent plus a lucrative contract extension.
But with much of the rest of this year's free-agent class older and lacking in star power, teams will look before they leap. Players will find jobs, but mostly on short-term deals. As the meetings move into day two, the most significant deal so far has been the Washington Nationals' signing of veteran catcher Ivan Rodriguez for two years and $6 million.
Major League general managers aren't much different from consumers: During tough times you still shop for what you need, but you look for value. For consumers, that means fewer leased BMWs and 60-inch plasma TVs. In baseball, it means less rolling of the dice on 30-something free agents looking for long-term deals. Much of this year's crop--outfielders Johnny Damon and Hideki Matsui plus infielders Nick Johnson, Orlando Cabrera and Miguel Tejada--fall into that category.
"If anything, we are a year behind (the economic curve), so we're prepared," says Randy Smith, the San Diego Padres' director of international scouting, who previously served as a general manager with the Padres and Detroit Tigers.
The New York Mets and Detroit Tigers have already lowered ticket prices in many categories for 2010, a trend that execs think will spread around much of the league.
Damon and his agent, Scott Boras, have been publicly whining in recent days about age discrimination (Damon is 36). Coming off a career-best 24 homers while helping the Yankees to a championship, Damon figures he's worth something close to the four-year, $52 million package the Yanks gave him in 2006. Problem is, Damon has already proven that he wasn't even worth that deal at age 32, in the midst of an economic boom. The .285 batting average and 19 homers he averaged during his Yankee stint were pretty routine for a left fielder; a Forbes salary analysis in 2008 pegged him, at $13 million a year, as the game's most overpaid outfielder. The difference between then and now: A sour economy is forcing teams to take a harder look at the expected ROI of a contract it doles out.
Even the rich and powerful Yankees, rarely gun shy about risking big money and multiple years on aging players, are making noises about shedding some age and payroll in 2010. Hence the hesitation to retain Damon and Matsui. Without the Bronx Bombers driving the market, the process is moving pretty slowly. It has the union and their agent allies whispering of a conspiracy to keep salaries down. A better explanation: Baseball players who were in diapers or grade school during the last significant recession in 1982 are facing the reality that the good times can take a pause once in a while. And that team executives are getting smarter with their money.
