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Prior to this offseason, the most FA contracts in a single winter that guaranteed a player at least $100MM was four. This year, two players have already exceeded deals of $200MM:
- David Price, who signed a 7 year/$217MM deal with the Red Sox
- Zack Greinke, who signed a 6 year/$206.5MM deal with the Diamondbacks
Two more should, at the very least, be close to the $200MM level:
- Jason Heyward, was said to be looking for a deal of 8 or 9 years in the $24MM AAV range which would have been been a total of $192 to $216MM, but in the end, he agreed to a deal the Chicago Cubs last week at 8 years/$184MM, which was lower than anticipated. His contract also contains two opt-outs.
- Chris Davis, the home run machine of the Orioles, has already turned down, depending on who you believe, either $150MM or $168MM over 7 years from the Orioles to re-sign. He is said to be looking for 8 years/$200MM.
Five more players have either signed for 9 figures or are projected to sign for $100MM or more:
- Jordan Zimmerman, signed for $110MM over 5 years with the Tigers.
- Johnny Cueto, turned down a $120MM for 6 years with the Diamondbacks. [Updated 12/14/15 5:49 P.M.:] Cueto agreed to a six year deal/$130MM deal with the San Francisco Giants. It has been reported that are two opt out clauses in the deal as well, with the first one coming after the 2017 season.
- Yoenis Cespedes, while there has been no news about specific offers, Jon Heyman projects Cespedes to command a salary of $150MM over 6 years while MLBTR projects Cespedes to sign for $140MM over 6 years.
- Justin Upton, again while there have been no specific offers in the media, Heyman projects Upton to command a salary of $161MM over 7 years while MLBTR projects Upton to sign for $147MM over 7 years.
- Finally Alex Gordon, perhaps the least expensive of the “elite” FA outfielder according to Heyman is expected to get a deal of $100MM over 5 years and according to MLBTR projects $105MM over 5 years.
There are potentially nine players who could receive 9 figure deals this winter which is double the amount in any previous winter. That is an astounding number of players and a lot of money.
Where the money is coming from for some of these deals:
- MLB National TV Deals with three major networks carry through the 2021 season and MLB will receive $12.4 Billion. Yes that's BILLION.
- MLB Revenues in 2014 increased to $9 Billion from $8 Billion in 2013 and are projected to reach $15 Billion over the next few years.
- The Red Sox principal owner John Henry is a very wealthy man in his own right, but combine that with his interest in NESN, Liverpool FC, his NASCAR Racing Team and the Red Sox, is it any wonder the Red Sox can afford the type of contracts they have been paying out the last two years?
- The Diamondbacks Local TV contract, according to reports, is for 20 years and is valued at north of $1.5 Billion. Estimates of the payouts are for about $80MM per year. Welcome to Arizona, Zack Greinke.
- Finally, how could the Cubs afford all their new FA signings? Well, that ones easier to explain than you would think. First, they have some excellent low cost players on their roster that are only pre-arb eligible now, giving them very controllable payroll cost for those players for the next 3 to 5 years. Second, the Cubs are projecting starting their own Regional Cable Network along the lines of NESN and YESNetwork for the 2020 season. And their current TV deal pays them $60MM per year through the 2019 season.
What does this all mean for the Yankees?
Many mid and even small market teams are now able to afford players and their contracts that they, prior to this point, had been unable to afford. This is impacting the Yankees in ways they could not have foreseen just a few short years ago. More teams are now vying for a finite number of elite players. When you combine that with the excessive long term deals and overly expensive contracts for several players past their primes in the Yankees' case, and you have a recipe for the Yankees sitting out the market this year and potentially even in 2017.