After Ozzie Albies’ contract, MLB may never value players the same again

Ozzie Albies’ contract is terrible by old MLB standards, but it just might become the norm in the league’s new era of austerity.

The Ozzie Albies contract extension was hard to miss, even in the flurry of other long-term deals we’ve seen for players scrambling to avoid free agency. The Atlanta Braves have locked up — an on the nose, but accurate turn of phrase here — their 22-year-old second baseman to a contract that is worth at least $35 million over seven years, and $45 million over nine if the club exercises two option years. It’s an implausibly team-friendly deal that stands out in a year of implausibly team-friendly deals:

It's typical that agents criticize competitors' deals. But I've now heard from executives, players, analytics people, development side and scouts who are saying the same thing: The Ozzie Albies extension might be the worst contract ever for a player. And this is not hyperbole.

— Jeff Passan (@JeffPassan) April 11, 2019

Albies came into 2019 with five years of team control remaining. This contract paves over those five years, which would have included a significant string of raises as he hit his arbitration-eligible seasons, plus a possible four years of free agency. According to Dan Szymborski at Fangraphs, Albies’ projected value over the next nine seasons is somewhere in the realm of $280 million. Even if you think ZIPs is too bullish on Albies, it’s not hard to remember a time when $45 million deals were being handed out like candy to mediocrities. Which Albies is not.

But let’s go back to $280 million. How does an analyst get to that number? Simple: project the number of wins a player is worth, then convert that number into dollars based on historical spending per team games won, which comes up to around $10 million per win for recent seasons*. And Voila! You get Value, of which Albies appears to have left some $200-plus million on the table.

*In Albies’ case that number has to be adjusted for his league minimum and arbitration years.

So what gives? Obviously, Albies is free to sign whatever contract he damn well pleases, and despite the hand-wringing over the exploitative nature of the contract, $45 million is enough to secure his family’s future. The new deal also accelerates his earnings over the next two years, during which he’d have earned an MLB-minimum salary otherwise. That a player who went pro for $350,000 might be tempted to sign such a deal is obvious. It’s what he gave up that’s perplexing.

The money left on the table gives the Braves some serious payroll flexibility, especially when combined with the team-friendly deal Ronald Acuña signed at the beginning of the month. With two key pieces secured for the long run, Atlanta are in position to make plays at the biggest free agents in baseball, potentially setting themselves up for several championship runs starting as early as next year. Remember, according to traditional baseball economics, every $10 million saved is the potential for an extra win.

Here’s the thing about that calculation, however: It’s based in the old world. Traditional baseball economics worked on an incomplete relationship between wins and dollars — having grown up during an age of regular, inflationary spending — and built up tools equipped to handle that environment by repeating the context back to us. Those tools, however, fail under different regimes, and no longer work in a new world where Ozzie Albies is getting paid $5 million a year for the better part of a decade.

The understood relationship between dollars and wins is a historical one. Wins have been worth what teams have been willing to spend to get them, rather than having any sort of inherent value. Purely descriptive relationships, however, can present a false reality, deluding us into thinking that the link is causal rather than coincidental. In truth, thanks to the dizzying combination of TV rights deals and revenue sharing, team income and team wins are only loosely correlated.

Certainly, a winning team makes more money: the Braves’ own financial statements for 2018 claim that “for the full year 2018, baseball revenue grew primarily due to increased ticket sales and concession revenue, as well as post-season revenue,” and due their status as a publicly traded company, they’re about the only baseball team you’d take on their word there. But now we’re looking at a second- or third-order relationships, one that produces results significantly lower than our nice, linear $10 million per win however you slice it.

This is bad for baseball players, who’ve been conditioned to deal with six years of movement restriction in the hope that they’d make up the lost early-career earnings by tapping into the free agency money hose. Now that that hose has dried up, early extensions are going to become more and more common, and more and more team-friendly. The decision to give up vital years of free agency makes far more sense in a world in which free agency is dead.

It’s also bad for fans. When payroll, income, and winning were linked by a coherent thread, we could at least expect teams to spend money to win and therefore make more money. With the relationship between winning and extra profit now so tenuous, it’s unclear whether it’s in anyone’s best business interests to try to win at all. Sports have always been a means of extracting money from communal excitement, but rarely has it looked so cynical.

In the long run, this situation will probably also be bad for baseball as a whole. TV deals will have to be renegotiated eventually, and with less than half the league trying at any one time, throwing money at teams will becoming less and less appealing. There’s also the looming prospect of a player strike as they watch owners’ profits balloon while their share of the pie drops.

It’s too early to accurately predict how all this will turn out. We’re barely 15 months removed from the first dismal sputterings from the previously reliable free agency machine, after all, and nobody — teams, analysts, nor players — have had time to properly adjust. But what we do know, and what the Albies deal tells us more clearly than anything we’ve previously seen, is that a new regime is here, and that our old ways of thinking are not up to coping.

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