The Art Of The One Year Deal

The World Series is over, the Boston Red Sox are World Series Champs. Finally, Boston gets to celebrate a championship.

Now that they’ve gotten their chance to celebrate, it’s time to move on to more important things: the offseason.

This offseason, in particular, should be an interesting one. We all know that last year, the offseason was, an interesting one. Last years offseason got a ton of coverage for being one of the weirdest offseasons in quite a while. Players that were expected to be paid handsomely, weren’t. Players that were looking for mediocre sized contracts got minuscule sized contracts. This offseason, there is a range of talent available. You have the Harper/Machado combo, the LeMahieu/Dozier type of talent, and even the Josh Harrison/Jung Ho Kang type of players will be available. The point is, there will be a ton of talent.

Right now, people are theorizing whether or not Machado will get 300 million or 400 million. I think there’s a good chance that Machado will get a massive contract, along with Harper, along with (maybe) Kershaw. Then there are about 20 other players who should get decent contracts. Then about 40 more who will, in all likelihood, have a tough time finding jobs.

Kevin was right about last year. Last offseason was a stark wake-up call for free agents in Major League baseball. Players entered with grand dreams of having cash cascade over them like a waterfall, only to leave the free agency period still thirsty for a glass of water.

This year, Kevin thinks that is all likely to change. I don’t. Manny will get to own a few islands, Harper will get to live like Marlins Man for a few years, and if Kershaw opts out of his contract, he’ll be able to buy himself a fistful of championship rings. But then what? Are the Yankees going to get in a bidding war over Josh Donaldson? Yasmani Grandal? What about Patrick Corbin?

All are deserving of large paydays. But all have obvious risks. And the supply of free agents seems to be rapidly outpacing the demand. Ethan just wrote about the economics of free agency, and whether or not the free agent market follows the efficient market hypothesis. He says that the free agent market is not efficient. Ethan then goes on to give multiple reasons for why he believes that is the case, and I highly suggest reading what he had to say about the subject because what Ethan said is exactly the reason the Pirates need to be aggressive in the coming days and months ahead.

This week, I tweeted a poll on Twitter. This is the result of that tweet:

If you were the Pirates, would you offer Machado a one year, $45,000,000 deal?

— Cannonball Corner (@CannonballCrner) October 29, 2018

For one, this is an interesting thought experiment if you are Manny Machado or if you are a team looking to sign Manny Machado. One team limits their downside risk by acquiring Machado for only one year, while Machado maximizes his upside potential by possibly signing another one year deal at the same price again, and again, and again.

The Pirates couldn’t afford to do this with Manny Machado. Half of the team payroll going to a single player would just be a poor business decision. However, a one year deal to say Daniel Murphy, or maybe even Jed Lowrie, or heck, why not Andrew Miller?

We all know that the Pirates won’t be able to outspend about 27 of the other Major League Baseball teams. But what they can do is get creative and maximize every dollar spent. Right now there aren’t many glaring holes on this team. Yeah, we all wish Colin Moran was a little better, but 3B is not currently a glaring hole. Shortstop, right now, is a glaring hole. Second base, with Frazier playing in RF, is a glaring hole. The bullpen isn’t a glaring hole, but, another bullpen arm is always welcome.

If the Pirates went out and signed Jose Iglesias, Daniel Murphy, and Andrew Miller all to one-year deals, what could go wrong? The Pirates avoid a lot of risk in doing this. They will have to pay a premium for eliminating the long-term risk, but they will be rewarded with veteran players who will undoubtedly inject some enthusiasm into this fanbase. If Jose Iglesias performs like he should, then its a net positive for the Pirates. If he performs above expectation, then great, sign him again.

It’s obvious that some teams are going to pursue Machado and Harper and pay them obscene amounts of money. The Pirates can’t, and won’t bother with that. What they should focus on is the mid-tier guy that gets overlooked, and capitalize by offering them a one year contract. Mike Moustakas is an excellent example of how this can benefit both parties. He only signed for $5.5 million last year after getting no interest on the free agent market. The Royals then traded him for a couple of prospects. Mike Moustakas is now going to retest the free agent market and should make more than what he was given last year.

The Brewers, Cubs, and Cardinals could all make a push for a big name guy this year. That is fine, it is what it is. The Pirates can make their own opportunities by being a little creative in their negotiations. Big Data Baseball was once what made the Pirates so good, now with other teams analytics departments growing at rapid rates, the Pirates will have to be efficient and creative by using a weak free agent market to their benefit.