The growing dilemma of underpaying young players

Ask any baseball fan or analyst about the one thing that sticks out about baseball in the year 2017. Some will immediately jump to the soaring strikeout rates and velocity epidemic. Others will point to the absurd amount of home runs being hit. Many, however, will point out the abundance of young players who are dominating the game like the sport has never seen. Young players like Mike Trout, Kris Bryant, Bryce Harper and Mookie Betts are not just young players with potential but they are the best in the game. Every generation has good young players but has there ever been a generation run by the young players? Unlikely. This begs the question: why is it that these young players are being paid significantly less than they should be getting paid?

Young players have always been underpaid relative to their performance, even before this upbringing of young talent. But now that we have a trend of players being called up and being better than ever, this issue looks even worse right now. The salary and club control systems are pretty straight forward. When a player is called up to the majors, he will be under club control for 6 years, sometimes 7 years if he qualifies as a Super 2 player, such as Kris Bryant. Super 2 players generally qualify for a 7th year of club control if you just call them up shortly after a season begins, rather than start them on the Opening Day roster, which the Cubs controversially did before the 2015 season. For the 1st 3 years of a player’s career, the team can pay that player the league minimum each year, which hovers around 500,000 dollars these days. The club can give a raise to these players but they have no incentive to do so, unless they want to reward a young player after a big season. From years 4-6, or 4-7 for a Super 2 player, the team and player go through the arbitration system, where both sides have to determine what a player is worth. Generally, both sides are able to agree on the set number but occasionally the 2 sides can’t agree to a number, which sends the 2 sides and the case to an official arbitrator panel, who decide which side wins the case. In year 1 of arbitration, most players will start in the 800,000-3 million dollar range, obviously dependent on how good the player is. After that, there is a 50-75% increase in the years following that if the player shows progress. Bryce Harper, a Super 2 qualifier, made 2.5 million dollars in his first year of arbitration in 2015, 5 million dollars in his second year and 13.625 million dollars in year 3. He will most likely break David Price’s arbitration record of 19.75 million dollars set in 2015, possibly going into the 22-24 million dollar range.

In real world terms, this type of money sounds perfectly fitting for a baseball player. In baseball terms, 22-24 million dollars pays for good players with a track record. Bryce Harper, however, has a generational type skill set and is being paid well below market value for a player of his caliber. As of right now, Bryce Harper has accumulated 23.4 WAR(Wins Above Replacement) in his big league career. Including his signing bonus, Harper has 30,525,000 dollars, which in baseball terms is not very much. The value of of 1 WAR on the open market, based on the 2017 offseason, is worth about 8 million dollars. If you include inflation from year to year, that number was lower when Bryce Harper first appeared in the majors. Let’s assume during Harper’s time in the big leagues, 1 WAR on the open market has been around 7 million dollars. Multiply 23.4 WAR by 7 million dollars and you come to a whopping 163.8 million dollars. He has been paid 133,275,000 dollars less than that. This is not a sob story to proclaim Bryce as a poor man, as he will make at least 300 million more dollars when he hits free agency after the 2018 season, but rather pointing out how the current MLB system doesn’t reward its’ young players based on production. Bryce is not alone here.

Kevin Kiermaier, the league’s premier defensive outfielder who also happens to be a league average hitter and good baserunner, recently signed away the remaining arbitration years, 2 free agent years and another potential free agent year by signing a 7 year 53.5 million dollar deal with a 13 million dollar option in 2023. Kiermaier was worth 13.4 WAR in his 1st 3 big league seasons, being paid the league minimum while doing so. If we assume Kiermaier is roughly a 4 WAR player for the next 4 years, then a 3 WAR player for the remaining 4 years of his contract, he will rack up 41.4 WAR in his 1st 10 years in the majors while making approximately 68 million dollars. Multiply the 41.4 WAR by approximately 8 million dollars, the open market value for 1 WAR, and you have 331.2 million dollars. Kiermaier, a young player who is also hurt by being a strong defensive player, players who are generally underrated in arbitration and free agent contracts, sold himself short potentially by hundreds of millions of dollars.

The list doesn’t end there. Paul Goldschmidt, Andrew McCutchen, Chris Sale, Jose Quintana Corey Kluber, Jason Kipnin, Michael Brantley, Ender Inciarte, Odubel Herrera, Chris Archer, Salvador Perez, Matt Moore, Carlos Martinez, Brandon Crawford and Brian Dozier are some examples of players who signed crazy cheap deals early on in their careers. Some of the best and most talented players in baseball, guys who can help win championships, are signing deals well before they reach free agency because they know the current system screws them.

To make it clear, there isn’t anything wrong with young players coming up and not being paid well right away. Earning your paycheck is not limited to jobs outside of the sports industry. However, if a player shows he is indeed elite, or even good, after 2 years in the majors, why is he not being paid appropriately? Does it seem appropriate to pay less money to the young talented players, the ones running the show, rather than an older, aging veteran on the open market? Older players who have proven themselves in the majors and reach free agency deserve to be paid well and appropriately. But young players, in this current system, are getting the short end of the stick.

To find a solution to this problem, you don’t have to look around too far by just looking at how the National Football League system is set up. The NFL is doing a lot of things poorly right now but their current set up for handling young players and their proximity to free agency would be an interesting set up for Major League baseball. I’m looking at changing the years of club control from 6-7 years to 3-4 years, or 4-5 years, like the current set up in football. For the first 2 years, you can pay the player whatever it is that you deem he deserves. After year 3, however, the team has to decide to either keep the player, at a higher price, or you risk losing that said player to another team that may want to sign him and give something back in return(compensation picks or draft picks after the 1st round perhaps). Basically, it’s just like a restricted free agent. After year 4, a player becomes an unrestricted free agent, free to sign with any team he wishes to. This is where draft pick compensation would come into play, like the way it is now, and the system can determine which players are worth picks and which ones aren’t. In this set up, you create a very quick and easy way to start paying young players their appropriate worth.

There’s a clear and obvious counterargument to this ever happening: Owners of MLB teams would have a fit, as they would be losing players prematurely and end up having to dish out more money earlier for players. However, it seems fairly logical to assume that if more young players hit free agency earlier, they’d be more attractive players than the usual aging 29-30 year old that hits free agency. To put this into perspective, if you have more Mike Trouts and Bryce Harpers, or even lesser players such as Gregory Polanco or Joc Pederson, reaching free agency at age 24 or 25, you’re creating a frenzy in the open market for these players, raising prices for the young and productive players to higher levels. At that same time, players like Alex Gordon, David Price or Yoenis Cespedes, quality players who are also entering their so called decline, are deemed as less attractive players. Instead of paying older players far too much money and handicapping teams with albatross contracts, more resources are being poured into the young players and less towards the old players, which seems like a fair system. This proposal increase salaries in baseball, without a doubt, and that is a more than fair proposition. Fans of baseball have a weird obsession by claiming the players they support make too much money but baseball is a filthy rich business, that is only being made richer by the addition of MLB Advanced Media.

Another counterargument to this set up is the rich teams would benefit while the poor, small market teams would be in trouble. Truthfully, some of these small market teams, such as the Oakland Athletics and the Kansas City Royals, will claim they can’t compete with these bigger market teams, which is somewhat true. It’s true they can’t hand out mega deals to every star player like the Yankees or Red Sox can but these small market teams generally have enough money to be able to spend on players. They just choose not to. Again, with the addition of MLBAM, there is a lot of revenue sharing going on that is benefitting all the teams, not just the big market teams, so every organization has the financial resources to be able to compete in this new system. These teams also still have the option to extend players early in their careers, such as the A’s extending Sonny Gray and the Royals extending Eric Hosmer. They just have to be willing to dish out a little more money and also get creative with how they do this. There might be a small benefit to big market teams and a negative repercussion for small market teams, only if those small market teams are unwilling to spend the available money that they have.

Going back to the NFL set up, the sport could possibly benefit from handing out non-guaranteed contracts, another fix that would limit how much older players, and even the younger ones, would be making. In the non-guaranteed contract system, players receive a “guaranteed” amount of money in their contract but have to earn the whole paycheck if they want it, a very simple and basic philosophy in life. For example, Manny Machado reaches free agency at the age of 26 and signs a 8 year 300 million dollar deal with the New York Yankees, with only 180 million dollars guaranteed. In this set up, Machado receives a huge guaranteed total but to earn his paycheck, he needs to provide his worth through the duration of the deal. If Machado earns his worth and makes more money based on incentives, it works out for him and the team. If it doesn’t work out, the Yankees probably come out a bit short on what Machado provided or he provides enough value to make the deal look fair, and Machado still makes a lot of money in the process. The MLB Players Association(MLBPA), headed by former big leaguer Tony Clark, would not be on board with this, since players aren’t being paid appropriately enough as is. But if you implement the new system to get players to free agency earlier, you’re opening up quicker chances to earn big paydays. You just have to earn those paychecks. Implementing both of these systems allows owners to be able to hand out big deals but not be totally handicapped by a bad player who is a being paid twice as much as he is worth for the back end of the contract(Albert Pujols, Zack Greinke). At the same time, the owners have to start paying young players quicker and learn how to construct the roster in a different manner. There’d be an adjustment period but changing the club control, salary system and the free agent set up could be a healthy change for baseball.

Another interesting aspect of this young generation is how we view a player’s prime window. The old adage in baseball is that players are in their “prime years” from ages 27-29. This current influx of young players, however, is showing that young players are running this game and may be doing it for the foreseeable future. Baseball players of this generation have been introduced to year round baseball, new workout regimes and healthier diets, leading to young players being good or great right off the bat. The new “prime years” may start to be ages 24-26, the same time when these players are being paid well below their worth. Instead of paying top shelf dollars for older players in their decline years, why wouldn’t teams allocate their funds to the young players smack in the middle of their prime?

By Wins Above Replacement, 8 of the top 10 position players last season were under the age of 30, including the top 3 players. Mike Trout was #1 playing in his age 25 season. Kris Bryant followed him in his age 24 season. Mookie Betts followed Bryant, playing in his age 23 season. For pitchers, 6 of the top 10 pitchers were under the age of 30, including the top 2 pitchers being 24 years old(Noah Syndergaard and the late Jose Fernandez). 12 of the top 12 pitchers were under the age of 30, too. Again, why does it seem fair to pay more money for aging veterans when the numbers show the young players are producing much of the value?

As more and more young players are signing deals early in their career, it becomes more painfully obvious that these players are selling themselves short, a result of an outdated salary system. With the young talent ruling the game, it seems inevitable that the sport will reach a tipping point at some point in the next decade. Or maybe we don’t reach that tipping point and simply see more players just decide to not sign contracts early, taking the risk by going year to year and striking gold in free agency. Carlos Correa recently came out to say he won’t sign an early career extension. He might not be the only star player, or even good young player to do this, going forward. If more young players, such as Francisco Lindor, Mookie Betts, Kris Bryant and Corey Seager, decide to go year to year, not sign early extensions and get filthy rich in free agency, it will create an interesting dilemma. Instead of just having the usual free agents above the age of 30, you’ll add a superstar or 2 here and there. That doesn’t affect the free agent spending much for the older veterans, however. If only a few young players are reaching free agency, only a few suitors are signing these players, leaving the rest of 28 teams to spend on aging veterans. If you change the current club control system, however, and have 5-6 young players reach free agency, then the need for the older players dissipates, leaving less teams battle it out for the 30+ year olds. This means less interest and less interest means less money being thrown out to the aging players, which pushes the league closer to appropriately paying the young players more money while paying older players less. Pretty simple concept, huh?

The recent Collective Bargaining Agreement(CBA) was agreed upon this past offseason so it’s unlikely that anything will change in the next few years. When the next CBA comes around, baseball could be presented with an interesting issue. More and more money will be poured into the game of baseball, more older veterans will be getting paid around their market price and the young talented players may still be getting screwed. If less young players stop signing these early career extensions, the future offseasons in free agency will get very interesting. We don’t have to look too far to a fascinating and fun offseason, the one following the 2018 season when young players such as Manny Machado and Bryce Harper hit free agency along with older stars such as Josh Donaldson. Baseball right now is doing phenomenally well and doesn’t have a ton to fix but that doesn’t mean it is a perfect sport. One of the glaring issues with the current game right now is underpaying its’ young players, the very ones driving baseball to success. It’s only a matter of time until there are tweaks made to the system.

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