Two Decisions Provide Expectations for the Free Agent Market

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Two seemingly unconnected decisions involving major players in the AL East occurred earlier this week. Somewhat unsurprisingly, the Yankees decided not to offer Didi Gregorius a Qualifying Offer, valued at approximately $17.8 million for the 2020 season, thus making Sir Didi a Free Agent. Somewhat more surprisingly, J.D. Martinez decided not to opt-out of his contract with the Red Sox, forgoing another shot at Free Agency prior to his age-33 season in favor of the penultimate year of his original contract with the Red Sox, valued at $19.35 million.

The obvious difference here is that one player will be forced to test the waters of Free Agency, while another will play another year in familiar and friendly confines. However, while both Gregorius and Martinez will follow different paths this off-season, the process that brought each player to their current status is telling. What binds the Yankees and J.D. Martinez (and by extension his agent, Scott Boras) are their evaluation of what the Free Agent market will likely bring players this off-season (hint: it isn’t good for the players).

Evaluating the Players

Before I talk about the current Free Agent landscape, it is important to understand how valuable both Didi Gregorius and J.D. Martinez are from the perspective of their on-field performance. Despite being very different players, both Didi and Martinez are good ballplayers.

Since taking over for Derek Jeter at SS for the Yankees in 2015, Didi Gregorius had cemented himself as a good Major League shortstop, something which was not a forgone conclusion prior to the trade that sent Didi to the Yankees. Didi came to the Yankees as a player with a reputation as a slick defender with a good arm and a light bat. Didi quickly shed the light bat label in pinstripes, making year-over-year improvements at the plate prior to the 2019 season. In his first season as a Yankee, Didi swatted just 9 HR and produced just an 89 wRC+ (signifying a total offensive contribution which was 11% below-average). Didi made improvements each year, adding power to his profile, evidenced by homer totals of 20+ each of the next 3 seasons, while improving his wRC+ (97 in 2016, 109 in 2017, and 122 in 2018). Most importantly, 2018 appeared to be a stepping stone, as Didi made marked improvements to his notoriously low walk rate. Didi’s offensive ascent was all the more impressive given the fact that he played above-average defense at one of the most valuable positions on the baseball diamond. When all the factors are added up, Didi was a consistently above-average, often All-Star caliber player prior to the 2019 season.

Obviously, we can’t ignore Didi’s 2019 season. Following off-season Tommy John Surgery, Didi never really got going in 2019. While his power and defense remained, Didi made less contact, and his newfound plate discipline regressed to its previous, albeit playable, levels. If you prorate Didi’s contributions across 600 plate appearances, his performance was roughly average in 2019.

Detractors will point to Didi’s struggles in 2019 and his poor batted ball profile (according to Statcast) to knock his future value projections down a peg. That said, Didi was never an exit velocity darling, and while his average exit velocity was barely above-average in 2019 (88.2 MPH vs. the league average figure of 87.8 MPH, according to Statcast), it represented Didi’s best year with regards to exit velocity. Didi also produced the best hard hit rate of his career (34.9%), indicating that Didi is still capable of impacting the ball. Didi may be entering his age-30 season, but he still pretty clearly has value as a player. At worst, Didi is a league-average shortstop with some pop and solid defense. At his best, Didi is still capable of producing All-Star caliber seasons in the 4-5 WAR range by either Fangraphs’ or Baseball-Reference’s metrics. Based on pretty much every $/WAR model one can reasonably come up with, paying Didi the $17.8 million Qualifying Offer is a pretty good gamble.

J.D. Martinez has been an offensive juggernaut since getting released by the Astros following the 2013 season. Prior to 2019, Martinez was simply one of the best hitters in the sport, consistently producing OPS+ figures 55+% better than league average. Upon signing with the Red Sox, Martinez used the Green Monster to his advantage, seeing a large spike in ISO. All of Martinez’s advanced batted ball numbers available via Statcast are top-of-the-scale whether we talk about exit velocity, hart hit rate, xSLG, or xwOBA.

There are only two knocks on Martinez. For one, he is a poor defender according to most defensive metrics, bringing his total value back to human levels. Secondly, his offensive performance relative to the league dipped a bit in the year of the juiced ball. Despite the negatives, Martinez remains valuable, and his batted ball profile suggests that he will remain an offensive force for years to come. Typically, players like Martinez are rewarded handsomely on the Free Agent Market.

In short, both Gregorius and Martinez are highly valuable players, despite any negative attributes we can see.

Context is Key

The Free Agent market has slowed considerably in the last couple of off-seasons, highlighted by the glacial rate at which players were signed last off-season. Not only were players signed at a low rate, but many non-elite players settled for far less money and guarantees then players in years past had received. Questions have remained regarding how to evaluate the Free Agent Market moving forward due to the economic shift occurring throughout baseball.

Multiple factors have created this situation. On the one hand, the Luxury Tax threshold is functioning less as a way to redistribute wealth to lower-revenue teams and more as a hard cap that most teams are avoiding at seemingly all costs. On the other, teams have gotten smarter and are less likely to pay big money for the decline phase of a player’s career, which is when most players reach Free Agency due to the current structure of team control for players.

Clearly, changes are needed with regards to teams’ control over a player’s most valuable season and to the economics of the luxury tax. That said, those changes are not happening until a new CBA is in place, and until then, our expectations for Free Agency cannot follow traditional thought processes.

In evaluating Didi’s case above, I briefly mentioned $/WAR. Given the current economic landscape across Major League Baseball, I’m not sure that any of the models out there are really valid at the current time, and I think that the Yankees’ and Martinez decisions reflect that fact.

Conclusion

Despite the fact that Didi and Martinez appear to be the types of players that traditionally do well for themselves in Free Agency, I think that their current status tells us that this Free Agency period will likely be sluggish, much like the last couple. The fact that the Yankees were not willing to pay Didi slightly above-average shortstop money for one season means that they are conscious of the Luxury Tax Threshold and that they don’t think that Didi will match that money on the open market. Despite the fact that Martinez remains one of the premier hitters in baseball, neither Martinez nor Scott Boras (one of the most aggressive agents in the sport) were willing to bet that Martinez could match even his current deal on the open market.

Some people have opined that this Free Agent market could be more lively due to the fact that more impact talent is available. I think that the decisions made by the Yankees and J.D. Martinez signal otherwise.

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