In his "The Two Markets" post on Fangraphs, Dave Cameron talked about how the trade market and the free agent market relate to each other, and if the decrease in trade returns may be related to the increase in free agent spending.
I wondered if there was any indicator of what is going on with the free agent market, decided to grab some data and see if I could figure out anything. To be honest, I didn't know what (if anything) I would find, and just figured I'd dive into the data and see what there is to see. As a quick note, I took away international signings from the pool -- they really muck things up (players from Cuba come over pretty young and throw off averages since they are complete outliers). I also ignored minor league deals.
First thing I looked at was the average age of free agents. My thought was, "Maybe the recent trend of signing players before their arbitration runs out has reduced the pool of young free agents, and increased the free agent age -- that would reduce supply of younger talented players, and increase costs of the remaining free agents."
Well, the data didn't exactly bear that out. It looks like the average age of free agents has had a consistent downward trend. So I thought, "Well, maybe that's because guys like Julio Franco refused to retire and drove up the average age. Maybe we should be looking at the average age of free agents who were signed!"
I thought about contract length next. How many contracts of each type are they handing out? And what age are players in each bracket? Are they giving more 1-year contracts to younger players who had a bad year, injury concerns, or something to prove?
But unfortunately, I'm still nowhere near answering my original question. Why the heck are we seeing such a decline in free agent ages?
So through all this, I never really figured it out. What I can say is that it looks like teams are getting a lot more conservative about big free agent signings, and that something around 2007-2008 seemed to cause it. It could be that the huge amount of contracts signed in 2006 flooded teams with players that are still under contract, and we will see a small rebound as those players go back on the market leaving more openings on each team. Or it could be a new understanding of aging, causing teams to be more conservative about signing aging players. Or it could be something I'm not seeing.
I'm sorry that this is so long and drawn out, but I think there's something hidden in the data trying to jump out. I fiddled around with it a dozen ways over many hours, and spent quite a bit of time thinking of different ways to tackle the data, but whatever is hidden didn't jump out at me.
I think that it may be hidden in data I haven't put in the spreadsheet. Perhaps the poor free agent signings of 2006 (Soriano, Zito, Carlos Lee, Juan Pierre, etc.) made people think twice about spending big bucks on the Free Agent market. Or maybe the Financial Crisis starting from 2007-2008 had an impact on team finances. Or maybe there just weren't good players on the market. Or...
If you can figure it out, please, let me know.