Analysis : Free Agency and Player Salaries

Richard Moss, the agent for former free agents Jack Morris and Andre Dawson, says his clients have few regrets. “Both of them are making $2 million,” Moss said, “so it’s not like they feel cheated. What they do regret is not having a chance to test their value in a free marketplace.”

Morris and Dawson were free agents in the winter of 1986-87. By the calendar, that was a mere 24 months ago, but in baseball terms, it was a completely different era, the winter some of the game’s biggest stars tested the formerly friendly waters of free agency and found them icy and hostile.

It was when Tim Raines, the National League batting champion, couldn’t get an appointment, much less a locker, with the Los Angeles Dodgers. When Dawson and Lance Parrish took substantial pay cuts to join new teams. When Morris was forced to go to arbitration to win a $1.85 million salary from the Detroit Tigers.

In the two years since, Morris has more than recovered his losses, having won a record arbitration decision, then signed a two-year, $4 million contract. Likewise, Dawson ($1.95 million in 1988), Raines ($1.66 million) and Parrish ($1 million) are all living nicely.

In the end, it was not Raines or Morris who suffered. That was left to others, to players who were less than premier talents and to youngsters who didn’t qualify for free agency or salary arbitration. They were the ones who got smaller raises and shorter contracts, and they were the ones responsible for ending a decade of furious salary increases.

Yet, even as competitive bidding has returned to free agency this winter, there are still dozens of players, agents and club officials who believe salaries may never rise as quickly as they once did. They see the rebirth of free agency as a product of several factors -- including the possibility of a $50 million damage award stemming from three collusion cases -- but they also believe that, in the long run, owners will keep salaries and contracts on a short rope.

They say the recent numbers may be the new real numbers, and that what happened to salaries in the first decade of free agency -- rising from an average of $53,500 to $412,520 -- probably won’t happen again. Salaries actually decreased slightly in 1987, then rose only moderately in 1988. This, they say, is baseball’s new math. A bear market.

“I think the owners realize they can’t completely change the bidding process,” said Jack Sands, a Boston-based agent. “What they can do is keep young players down for four years. I think those players will still get minimal raises. What they can also do is weed out a lot of older players who can still contribute, but are making big salaries.”

In fact, a couple of agents privately wonder why owners didn’t think of this strategy earlier. Players need three full years of major-league service to be eligible for arbitration and six full years to be eligible for free agency. In between, owners can get a lot of games for not a lot of money, and they can do it legally.

For instance, there’s the case of Oakland’s Jose Canseco. He earned the minimum $62,500 during his rookie season (1986) while hitting 33 homers and driving in 117 runs. The A’s raised him to only $165,000, and Canseco had another terrific year -- 31 homers and 113 RBI.

He got another moderate raise, to $325,000, and responded by hitting 42 homers, driving in 124 runs and stealing 40 bases. His team won the American League pennant and Canseco the American League MVP award. This winter, he’s finally eligible for arbitration, and his 1989 salary probably will be around $2 million. So even if he slumps for a season or two, the A’s will have gotten three big years at a minimal salary.

Similarly, California’s Wally Joyner has begun his major-league career with three big seasons, but his salary has gone from $62,500 to $165,000 to $340,000, modest increases. Likewise, he’ll join the $1 million club in 1989.

What has happened to Canseco, Joyner and others is far different from what once happened to young players, who were winners in a more active free-agent market and a new era of owners who hadn’t learned about caution. The previous basic agreement allowed players to go to arbitration after two years of service and, in 1985, Kansas City’s Bret Saberhagen went 20-6 and won a Cy Young Award. For that, an arbitrator raised his salary from $150,000 to $925,000.

“You don’t mind paying a player for producing,” Cleveland president Hank Peters said. “But the problem when a guy gets a raise like that is you can only cut him 20 percent after he does nothing. So if you’re talking about a 21-year-old guy (which Saberhagen was), his salary gets pretty high at a pretty early age, and if he has a bad year (as Saberhagen did, winning seven games in 1986), you still can’t get his salary back to where it should be.”

It will be difficult for younger players today to benefit as quickly as Saberhagen did, and while the big free-agent spending gets more of the headlines, the quiet negotiations in January and February may still keep the averages lower.

Not only do players now need three full seasons, “but more and more players start their rookie years in the minors,” Sands said. “That means teams can get almost four seasons before they have to worry about arbitration. By then, you know if a guy is going to be worth the big money.”

Until this year, the last winter of competitive free-agent bidding had been after the 1984 season when Rick Sutcliffe got $9 million over five years, Fred Lynn $6.8 million over five years and Bruce Sutter $10 million over six years.

Even players who weren’t eligible for free agency won as teams scurried to keep them from considering it a year down the road. Rickey Henderson, a year away from free agency, got a five-year, $8.6-million contract when the A’s traded him to the Yankees, and the Red Sox gave Jim Rice $8.6 million over four years to keep him at home.

Even while signing the checks, owners argued that free agency was bankrupting the game and, coincidentally, after three winters when they managed to kill it, they now say the industry has shown a $21 million profit. The Major League Players Association never agreed with those figures, and even assuming they were true, the values of franchises rose so astronomically as to make yearly profits and losses almost irrelevant.

What’s more, agents always wondered why owners wanted to kill free agency, because every dollar spent on players generated tremendous fan interest and newspaper and television coverage.

“No question, the game is better than ever,” Moss said. “Bowie Kuhn argued that free agency would destroy that competitive balance of the game. We now know that is nonsensical talk, but these are people who’ve spoken nonsensical things before.”

It certainly didn’t destroy the competitive balance, not with the Royals and Twins having won two of the last four World Series. While no one has spent more free-agent millions than George Steinbrenner of the Yankees, his team hasn’t made a postseason appearance since 1981. If Steinbrenner is discouraged, he hasn’t shown it, having opened his checkbook again this winter to sign Andy Hawkins, Steve Sax and Dave LaPoint for a total of $11 million.

More than any other owner, Steinbrenner led this winter’s charge back into free agency, having signed second baseman Sax for $4 million over three years. Sax made $800,000 with the Dodgers in 1988.

His most surprising bid was for Hawkins, who made $453,000 from the Padres last season and was mulling only one other offer, a $2.8 million bid by the Twins. Steinbrenner, however, blew the Twins out of the water by upping the ante by $800,000.

The Red Sox, Angels and Padres entered into a furious bidding war for left-hander Bruce Hurst, who picked the Padres even though their three-year, $5.25 million offer was the smallest of the three.

By the end of the week, a lot of teams who thought they’d never get involved in such things had become involved. The Seattle Mariners, who lost right-hander Mike Moore to the A’s, gave outfielder Jeffrey Leonard and reliever Tom Niedenfuer two-year, $1.75-million offers, even though they were bidding against themselves.

What was so surprising about the Seattle signings is that Mariners owner George Argyros has been one of the game’s harshest critics of free agency and a hard-line anti-union advocate.

If there was an owner more anti-union than Argyros, it may have been Houston’s John McMullen. But a week after he cursed Nolan Ryan’s $2 million departure to the Texas Rangers, McMullen threw a three-year, $3.45 million contract to right-hander Jim Clancy (120-148 career record).

All of a sudden, it wasn’t bidding just by Steinbrenner and California’s Gene Autry, but by owners all over the map.

“I think there were three factors,” Sands said. “The first is the most obvious. The owners had lost two collusion cases, and it wasn’t going to be worth it to continue to depress the market. Secondly, the new television contract ($1 billion over four years) means a huge infusion of cash.

“Up until six months ago, I think owners thought they would get less money out of the next television contract. They could read. They saw there had been cutbacks at all three networks, and the baseball ratings hadn’t been great. Thirdly, I think there was a real desire to win immediately. The Dodgers turned it around in one year. The Twins and Royals won the World Series, and owners have something approaching NFL parity. One or two players can make a difference.”

Sands and others say there’s one other important factor: 1990.

With the basic agreement expiring after next season, owners are set on not even opening spring training until there’s a new agreement, and negotiations are expected to be long and bitter.

“Who knows when the 1990 season will begin,” Sands said. “That puts the focus on 1989, and I think a lot of owners aren’t looking past 1989. That means winning in that season is extremely important to them.”

Sands and others are quick to point out some differences from, say, 1979, when Dave Goltz and Rennie Stennett got rich. For one thing, contracts are shorter. No player has received a five-year deal since the Baltimore Orioles signed Eddie Murray in 1985, and no one has received four since the Atlanta Braves signed Ken Oberkfell a few months after that.

“It’s important to remember that these salaries are based on an artifically and illegally controlled market,” said Donald Fehr, executive director of the Major League Players Association. “These may be market corrections, but it won’t correct itself on its own.”