Free Agent Signings by Year

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!"

Again, we see the same trend, there's almost no difference. So it looks like the talent pool, for some reason, is getting younger in the MLB from 2006 to today. It looked to be time to take it from a different angle.

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?

The darker the color, the more recent the year (2006-2010). As you can see, for the most part, the contracts are granted to younger players pretty-much across the board, regardless of contract length, with longer contracts being given to progressively younger players. That makes sense. So I looked at the average age that a contract ends, so that we get an idea of when teams want to cut ties, rather than the age they want to make them:

Lighter colors are shorter contracts (from 1-5+ years). A couple things I noticed here are that the younger the player (and the longer the contract), the older the player seems to be when he ends. I wonder if this is a premium on getting premier talent signed long-term -- you are almost required to keep the player longer than you would otherwise like to. We don't see the same pattern in 2-year or 3-year contracts, but we see it in 4-year contracts for 2008 (Derek Lowe, 41 and Ryan Dempster, 37), and we see it in 5+ year contracts from 2008 through 2010.

But unfortunately, I'm still nowhere near answering my original question. Why the heck are we seeing such a decline in free agent ages?

I looked at how many years of contracts teams were giving to free agents, and how many players they gave them to. The closer the two lines get, the shorter each contract will be. If they're on top of each other, it would mean that they are only handing out 1-year contracts.

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.

References:

• Data from ESPN
• Raw Data in a Google Spreadsheet

Note: For reasons unknown, Google doesn't do the formulas right. If you download as an Excel file, then you should be able to see a lot fewer #DIV/0 errors. Graphics were created in Excel and then imported into Adobe Illustrator. There's nothing special about them, but if you do want to use them, feel free under a Creative Commons Attribution, Non-commercial license.