Others to Follow Cleveland Indians Lead

The Cleveland Indians didn’t make a deep playoff run in 2013. They didn’t draw a huge number of fans either. But… their 92 wins (a 24 game improvement over 2012) stand out because their offseason strategy – as a small-market team with limited means – was to take advantage of the free agent market to the fullest possible extent.

Sep 28, 2013; Minneapolis, MN, USA; Cleveland Indians first baseman Nick Swisher (33) at bat in the first inning against the Minnesota Twins at Target Field. Mandatory Credit: Brad Rempel-USA TODAY Sports The Cleveland Indians won 5-1.

We’re already getting the sense that the most recent Collective Bargaining Agreement (CBA) for major league baseball is set up to favor teams like the Indians in free agency whereas the last one was set up to benefit teams like New York and Boston. It’s possible that many teams hadn’t figured that out yet a year ago, but I imagine that this time the Indians will have a number of imitators (and they themselves won’t be pursuing the same strategy, having spent their money a year ago). The penalties for going over the luxury tax threshold are harsh – which dampens the desire to spend by the teams at the top. The rules regarding draft signings and international free agents make it tough to use cash to compensate for lost picks. The additional revenues coming in from the central fund increase the amount that “small-market” teams can reasonably afford to spend. And, perhaps most importantly, bad teams can protect their first-rounder as the Indians did last year.

The overall logic of the free agent market remains the same – guys tend to be old and they tend to be expensive. The strategy that seems to make sense at the moment – if you aren’t a team pushing the luxury tax threshold to win every year – is to go from “rebuilding” through player development to “contention” in one massive flurry of free agent activity (possibly aided by trades, if you have the chips). As before, if you’re going to be bad no matter what there isn’t all that much incentive to spend the money that you can afford to spend (thanks to central fund redistribution) – but the fact remains that you can if you want to. There is surprisingly little competition over free agents that come with draft pick compensation – relative to the way things used to be, which is why the Indians were able to sign Michael Bourn and Nick Swisher. The draft pick cost for each signing after the first gets lower and lower – it makes more sense now to sign a bunch of guys all at once, particularly after a bad year, than it does to sign one good free agent every year. It used to be that the sensible thing to do was to sign a top free agent to push your team over the hump once you had managed to win, say, 84 games through organic growth. Not anymore – that costs you a first-rounder. Signing 2 if not 3 (or 4?) guys after finishing in the bottom 10 (but having good reason to hope for better next year) now makes more sense for a team looking to create a 3 or 4 year window.

The only teams that can follow this plan are those that finished in the bottom 10, that think their underlying talent is significantly better (or will be next year) that haven’t already spent all that their revenue base can theoretically support. This year a number of teams finished 74-88, any of whom could claim to be at least tied for a spot in the bottom 10. A number of them have markets that can support larger payrolls and a number of them are probably sick and tired of waiting for “development” to bear fruit. I imagine the Astros are at least a year away from this situation – but I expect them to make a big splash when they are ready. For this offseason, I’m going to be watching the Seattle Mariners, New York Mets, Chicago Cubs and (yes) Minnesota Twins most intently – though I think the first two are the most likely to go crazy. The Twins are obviously the ones we Tigers fans care most about – the Central feels a little too competitive as it is, even with the White Sox roster gutted. Their farm system looks really deep right now and they might feel like the sorts of free agents they’d like to go after just aren’t there right now, but they might also worry that if they wait a year with only modest signings (like an Aaron Harang) they’ll do too well in 2014 to finish in the bottom 10. Might be go nuts now or never go nuts.