Collusion? No, We've Had This Coming for a While.

Zach Caldwell worked in baseball operations for the Milwaukee Brewers under Doug Melvin until attending scout school in 2015. In this article, Caldwell offers his inside opinion on the cries of collusion and true reason for the lack of action in MLB free agency this offseason.

Ownership groups across MLB are not colluding with each other to impact free agent spending. Instead, they are adopting the rebuilding strategy influenced by Bill James and the Sabermetrics movement.

With almost half of the teams in Major League Baseball committing to a rebuild in the past 3 seasons, the free agent market has struggled to live up to the “Hot Stove” reputation we all know and love. While this has been an unusually slow offseason, it’s been a long time coming for many in the baseball industry. Excessive free agent spending is a thing of the past. It’s been replaced with long-term strategic plans that emphasize building from within & value-based spending.

Though experiencing years of below .500 baseball is hard to accept, it’s hard to argue with the final results. The last 3 World Series Champions, the Kansas City Royals, Chicago Cubs, and Houston Astros, have given “smart front offices” all the proof they need to convince ownership of multi-season rebuilds.

One of the unfortunate problems with having multiple teams in a rebuild is that it limits the number of teams interested in top dollar free agents. It’s a simple example of supply and demand theory: the fewer teams interested in a player, the lower the contract. As a result, we’ve seen free agents hold off on signing for weeks or even months to see if the market will pick up any steam. While this approach seems to have paid off for J.D. Martinez and Eric Hosmer (left), many veteran free agents are still looking to be paid what they feel they're worth.

Arbitration buyouts are another part of the rebuilding process that ultimately affected the free agent market this winter. The current system allows teams to offer contract extensions to players that will guarantee a salary for multiple years instead of going through yearly salary arbitration. As a tradeoff, a player usually delays hitting free agency for 2-3 years.

We’ve seen the average age of the top free agents rise to over 30 years old over the past couple of seasons. With players typically starting their decline around the age-33 season, teams are unwilling to offer the long contracts seen in the past during the steroid era to players over 30.

There are no clear solutions for the problems stifling the current free agent market. Maybe players will start to turn down arbitration contract extensions and test free agency at a younger age. Or perhaps MLB execs will consider implementing a payroll floor that teams will need to spend over every year. Whatever the decision, it’s clear that the current system is in need of some fine-tuning when it’s time to negotiate the new CBA around when the current one expires in 2021.

However, it’s not all doom and gloom for the players. There are potentially 3 franchise changing players (Clayton Kershaw, Bryce Harper and Manny Machado) hitting the free agent market next offseason. All 3 should expect to see contracts with average annual values close to $30 million and in the 6-8-year range, and maybe that will quiet the unfounded collusion talk for an offseason.

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