Edwards: Is the cost of a win in free agency still linear?

From Craig Edwards at FanGraphs on January 9, 2020:

It’s no secret that free agency has changed over the last decade. As more teams have embraced analytics by focusing on paying for future, rather than past, performance, and owners have pinched pennies, we’ve seen slower winters, and in the case of last offseason, teams paying significantly less for a win on the open market. This offseason has seen a welcome return of activity, with good players receiving top-dollar contracts. When we consider the health of free agency for players, the big deals seem to grab a lot of attention, as with Gerrit Cole, Anthony Rendon, and Stephen Strasburg‘s this season, and Manny Machado and Bryce Harper’s a year ago. Mega-deals create the impression that all is well, and the size of those deals can have an outsized affect when calculating dollars per win, as in my piece yesterday on the cost of a win in free agency. But the players who don’t receive those big contracts deserve a bit more attention because it is possible that as free agent spending has shifted, the money teams are paying for wins may no longer be linear.

When we talk about the linear cost of a win, we’re talking about there being a uniform amount teams are generally willing to pay per win on the free agent market; if the cost of a win is $9 million, a three-win player gets $27 million, a two-win player gets $18 million, and a one-win player receives $9 million. And while we recognize the three-win player doesn’t actually receive a one-year deal worth $27 million, when the money is spread over a multi-year deal and the presumed decline from aging is factored in, the wins paid for over the life of the contract come out in roughly that manner.

Read the full article here: https://blogs.fangraphs.com/is-the-cost-of-a-win-in-free-agency-still-linear/

Originally published: January 9, 2020. Last Updated: January 9, 2020.