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At some point, MLB executives decided to call the MLB offseason free agency period the “hot stove.” In years past, the term was appropriate. The most sought after free agents saw heated bidding wars as soon as the World Series ended and were signed soon after. The last two seasons, however, has seen the “hot stove” come to a freezing halt. Some analysts blame qualifying offers, others blame penny pinching priorities, and old school fans blame analytics. So what’s at fault? Let’s take a look.
Qualifying offers – At the end of every season, MLB teams are able to extend qualifying offers to their pending free agents. Some players sign the lucrative one year deals and return to the team. The rest enter free agency, giving other teams the chance to match or exceed the offer. When these players sign, their former team gets compensated with a high draft pick.
Essentially, Team A extends a qualifying offer to Player X for $20 million. Team B comes in and signs Player X to a multi-year deal. At the same time, they send Team A their first round draft pick for the signing. Teams don’t like this, and these players sit on the market for months. Just ask Mike Moustakas.
Penny Pinching/Luxury Tax – Modern thinking says this; why spend $325 million on Giancarlo Stanton when he’ll only be on the field 60 percent of the time (defense and four at bats a game)? There must be cheaper and younger options who might produce the same results. Signing the cheaper player keeps the team under the luxury tax as well. These things are all true, except MLB executives have no reason to penny pinch. In 2018, the league saw record revenues over $10 billion. They don’t need to be cheap, they just… are.
Analytics – This feeds into the previous point. The rise of analytics, which values wins above replacement, on base percentage, fielding percentage and other sabermetric heavy stats has turned MLB scouting in simple computation. There is always going to be a cheaper option if you look deep enough in the free agent well; That hidden gem with Giancarlo Stanton power and Billy Hamilton defensive metrics. Pay him league minimum. Pay them all league minimum and leave the high priced free agents on the market until their asking prices inevitably drops.
Which one do think is the keeping the stove so cold?