April 21, 2021

How Winning and Financial Power Affect Free Agent Spending (FanGraphs)

Over the past few days, we’ve discussed the cost of a win in free agency and how that cost has been lowered for slightly below-average players. In this post, I want to examine some of the potential driving forces behind these changes. Specifically, I want to take a look at the following assumptions about how teams operate with respect to paying for wins on the free agent market.

  • The closer teams get to the playoffs, the more money they will be willing to spend on players because of the monetary benefits that come from making the playoffs.
  • The more money a team has, the more they will be willing to spend on a win on the free agent market because they can afford it, and vice versa (i.e. the Rays won’t spend the same dollars per win as the Yankees because the Rays have to hunt for bargains while the Yankees can afford to make the highest offer to any player they want).

We’ll take these assumptions one at a time. While there isn’t a great way to bucket teams by whether they’re “close” to the postseason without some degree of arbitrariness, I opted to look at a team’s projected win totals for each of the last two seasons, plus its current projected WAR for next…

Read “How Winning and Financial Power Affect Free Agent Spending” at FanGraphs