10 Degrees: MLB's economic disparity and why its top bargains are so valuable

Jeff Passan
·MLB columnist

The $100 million payroll used to serve as the line of demarcation for baseball's super rich. In 2016, it's more or less the threshold of competitiveness, and as Major League Baseball and the players' association begin to hammer through a new collective-bargaining agreement, economic disparity looms as an issue of competitiveness as much as it has in years.

Going into Sunday, 18 teams entered with records of .500 or better – and 16 of them started the season with $100 million-plus payrolls. Of the dozen sub-.500 teams, just four carried payrolls over $100 million. The correlation of payroll to winning percentage is almost twice as strong in 2016 as it has been in the other four years of the current basic agreement, and while it's still only moderate in its relationship, alarms are sounding across baseball, particularly in the front offices of the 10 teams with eight-figure payrolls.

"In what other sport is it OK for one team to spend three times as much as another?" one GM said recently.

This is why the current negotiations are so vital: The union wants to have its cake and eat it, too, as the only league without a salary cap – a noble and worthwhile fight for the players. For it to work, though, the economic disparity cannot grow so large that no levers within the system exist to lift the perpetually poor out of their doldrums.

Clayton Kershaw is 9-1 with a 1.52 ERA this season. (Getty Images)
Clayton Kershaw is 9-1 with a 1.52 ERA this season. (Getty Images)

Considering the Kansas City Royals, longtime paupers, won the World Series last year, and the Pittsburgh Pirates, even more miserly, are barreling toward their fourth consecutive playoff appearance, and plenty of other cases of smaller-market teams succeeding do exist, that day has not arrived. And yet the first two months of the 2016 season have proven decidedly have vs. have not, with only the Cleveland Indians and Miami Marlins mustering above-.500 records with eight-figure payrolls.

The correlation between payroll and record going into Sunday was .522 – nearly triple the number of last season, which is to say we don't yet know what is signal and what is noise. Bigger decisions have been made on less evidence, though, and considering baseball's well-earned reputation of favoring big-market teams – as, it should be noted, other leagues do as well – MLB can't forsake its relatively impoverished during the negotiations.

If competitive balance is as much a goal of  Rob Manfred's as it was Bud Selig's, MLB needs to overhaul its revenue-sharing system such that teams can't hide the bounty of local-television deals and keep them off-limits from shared monies. Similarly, baseball must do a better job ensuring the teams receiving enormous sums of revenue sharing reinvest the money into the on-field product. The average operating income last year of the 10 teams with sub-$100 million payrolls was more than $20 million, according to Forbes' annual analysis. The Astros were more than $60 million in the black, according to Forbes. Only the Phillies lost money, $8.9 million in the red – and their payroll last season was $50 million more than this year.

Money isn't everything in modern baseball, but it drives so much of the action it might as well be. Not just the behind-the-scenes lawyer stuff, either, but the decisions being debated in front offices now as to whom the winning teams target before the July 31 trade deadline, when to call up promising prospects and how to proceed in the offseason. It's what makes guys like Kris Bryant and Xander Bogaerts and Noah Syndergaard and Corey Seager and Mookie Betts so valuable: The first three years of a player's career can be had for a little more than $1.5 million.

This 10 Degrees isn't here to celebrate those players. This is to highlight some of the best post-arbitration contracts in baseball. Some of them are great one-year deals. Others are savvy multiyear pacts that bought out arbitration years. There are a couple medium-ticket free agent contracts that warrant inclusion. And then there's the guy making more than anyone in baseball this season. Yes …

1. Clayton Kershaw, even at $32 million, is a giant bargain. And this goes well beyond the raw amazement he generates, though any opportunity to showcase Kershaw's line is one gladly taken. Look at this. It's like fine art sketched out in number form: 100 2/3 IP, 59 H, 18 R, 17 ER, 6 BB, 122 K, 1.52 ERA. That belongs in the MoMA.

So, how does that translate to a bargain? Well, we need to use the concept of marginal wins above replacement. While I've spat on WAR in the past, it comes in handy for an exercise like this, because free agency gives us a decent sense of what teams are willing to pay for a win above replacement, as calculated by FanGraphs or Baseball-Reference.com. And that cost, these days, is in the neighborhood of $8 million.

Currently, FanGraphs has Kershaw at 4.6 WAR on the season and Baseball-Reference at 4.1. That means Kershaw has generated somewhere between $33 million-$37 million already for the Dodgers this season. Meaning everything Clayton Kershaw does from this point forth is surplus value. And considering he's got 20 starts left, that's a lot of surplus and a lot of value. In the end, it may not quite stack up to the …

Jose Altuve is making $3.5 million this season. (Getty Images)
Jose Altuve is making $3.5 million this season. (Getty Images)

2. Jose Altuve deal, which is one of the true steals since the free-agent boom of a quarter-century ago. Altuve is making $3.5 million this season. Next year, he'll get $4.5 million, and the Houston Astros then have a pair of options at $6 million and $6.5 million, neither with a buyout. If a team were to draw up a contract and use it as an ideal, it would be the Altuve deal.

Granted, it helps that Altuve isn't some middling bum. (That deeply criticized four-year, $10 million deal for Jon Singleton, for example, looks incredible for the player in hindsight.) He's second in the American League in hitting and on-base percentage. He leads the AL in steals. He's got a slugging percentage higher than Mike Trout. He has walked more than he has struck out. He's making Carlos Correa look like the lesser of Houston's keystone combination, which is not an easy thing to do.

If the Astros exercise their options, which they will barring a catastrophic injury, they'll have gotten Altuve's age 24 through 29 seasons for $25 million total. Considering that includes two years of Altuve as a free agent, those six years, if played out through arbitration, would have netted Altuve somewhere in the range of $80 million.

This is why teams do pre-arbitration contracts. Because ones like Altuve are jackpots. It makes deals like …

3. Jung-ho Kang's even more special. With Kang, no artificial salary ceilings existed. The Pittsburgh Pirates  saw more in him than others, and now they've got him for $2.5 million this season and just $11.25 million more over the next three years.

Such contracts are fewer and further between these days because players understand how awful they really are and how much value they're ceding by signing them. The closest thing to Kang's deal is the spectacular bargain Milwaukee got on Jonathan Lucroy at $12.5 million over five years. Lucroy gets $4.25 million to be the best catcher in baseball this season, and the $5.25 million option on him next season makes him among the two or three most valuable trade chips this July.

The Pirates fetched Kang at such a discount because of fears that Korean players couldn't translate their skills to the major leagues. All he has done this year is put up a .283/.348/.596 line and make that $11.25 million for the next three years look Altuve-level good. Know who's making $11.25M this year alone? About 100 players, including Ricky Nolasco, Matt Garza, Jorge De La Rosa, Chase Headley, Matt Harrison and Clay Buchholz. Just shy of that is …

4. Marco Estrada at $11 million, part of his two-year, $26 million deal with Toronto this offseason that felt like a bit of a reach for a right-hander whose fastball starts with 8 more often than 9. That's the guy who's supposed to be languishing at Triple-A, not the one carving up the AL East with a 2.57 ERA.

Estrada's peripherals say he shouldn't be nearly as good as he is. He walks too many guys (3.7 per nine), is a flyball pitcher in a notorious home park and doesn't strike out enough guys to make up for the former two. Only here's the thing: Nobody can hit him. And that's not hyperbole. Going on two seasons now, Marco Estrada is the most unhittable pitcher in the American League.

Since he joined the Blue Jays last season, Estrada has allowed 182 hits in 944 at-bats. That's a .193 average. Batters this season are hitting .168 against him. Their slash line over the past two seasons is .193/.264/.346. No AL pitcher has a lower OPS against. Opponents against Kershaw over the same time: .187/.223/.273. Jake Arrieta's numbers are similarly minuscule. But Estrada's are better than Max Scherzer, Noah Syndergaard and others.

Certainly you can point to his batting average on balls in play of .209 and look upon the numbers with extreme dubiousness. And you probably wouldn't be wrong. No pitcher sees so few batted balls fall for such a long period of time. Still, we've learned from …

David Ortiz is still planning to retire after this season. (Getty Images)
David Ortiz is still planning to retire after this season. (Getty Images)

5. David Ortiz that outliers exist everywhere in baseball, and for a 40-year-old designated hitter to make $16 million he'd better be awfully good. Which Ortiz continues to be as the game's lone .700-plus slugger.

Ortiz's .340 average is the game's fourth best and his .422 on-base percentage third and his 42 extra-base hits tops and, yes, he still plans on retiring despite these things. He's in that grouping of salaries in the mid-teens where some of the best bargains can be found. Mike Trout is at $15.25 million this year and $19.25 million in 2017 before jumping to Kershaw territory for the last three years of his contract. Johnny Cueto gets $15 million this season and $21 million next season before he can opt out or exercise the last four years of his pact with the Giants.

Admittedly, it feels a bit odd to be celebrating guys getting paid eight figures in a best-contracts column, so let's move on to …

6. Dae-Ho Lee and his $1 million base salary. Lee wasn't even guaranteed a spot with the Seattle Mariners when he jumped from South Korea to the major leagues this offseason. He just wanted the opportunity.

He made the roster as a backup and the Mariners figured he could get some at-bats as a platoon first baseman with a surprisingly deft glove for someone with, uh, a BMI that resembles the age of a mid-life crisis. Lee is hammering lefties and righties alike, and at .308/.345/.596 with 10 home runs in 104 at-bats, he is one of the best bargains in baseball this year, even if the Mariners have given him a $250,000 roster bonus, owe him another soon and likely will owe him another $1 million or so in plate appearance incentives.

Others have more than made their money in limited plate appearances, whether it's Matt Joyce for Pittsburgh at $1 million (.296/.436/.593 with 19 walks against 23 strikeouts) or Hyun Soo Kim, whom Baltimore wanted to cut this spring but is hitting .349/.429/.453 and on the books at just $2.8 million.

Among Kang and Lee and Kim and Byung Ho Park and …

7. Seung Hwan Oh perhaps teams will get over the idea that players from South Korea aren't worthy of major league-quality salaries. The Cardinals are paying Oh only $2.5 million, and he deserves an All-Star appearance, with a 1.60 ERA, 46 strikeouts against eight walks in 33 2/3 innings and a paucity of hard-hit balls.

One could make the argument that Oh, a 33-year-old right-hander, has been the best reliever in the NL this season, though …

8. Fernando Rodney could point to his 0.00 ERA, shoot a fake arrow through it and have a pretty good case. Baseball is a better place when Rodney is blustering about, and considering he's 22 appearances deep without having allowed an earned run, he's classic cock-of-the-walk Rodney these days.

At 39, Rodney is throwing 2 mph slower than he did during his amazing 2012 season, in which he set a major league record with a 0.60 ERA. Since then, he looked human in 2013, rebounded in 2014, was terrible with the Mariners before finding himself with the Cubs in 2015 and is now thriving today. In other words, Fernando Rodney should be a Giant.

His guaranteed salary this season is $1.6 million, with a $400,000 buyout on a sure-to-be-exercised team option. He may get $1.5 million to $2 million extra this year for games finished, making him one of the best values of the offseason, alongside Rich Hill at $6 million for a year and Dexter Fowler at $8 million (with a $5 million buyout coming when he turns down the mutual option). And had …

Ichiro Suzuki is 26 hits from 3,000 for his MLB career. (Getty Images)
Ichiro Suzuki is 26 hits from 3,000 for his MLB career. (Getty Images)

9. Ichiro Suzuki not agreed to a one-year, $2 million deal with the Miami Marlins before free agency officially began, he'd be on that list, too. Because after looking like he was done last season, Ichiro suddenly resembles Ichiro, and it's a true delight to see a 42-year-old man doing things like someone literally half his age.

Gray hair aside and foot speed aside, Ichiro is more or less his 21-year-old self these days. That year, with the Orix Blue Wave, he batted .342. This year, with the Marlins, he's hitting .336. And while it's a pretty empty .336 – 34 of his 39 hits are singles – it's still .336 at an age when 99.99 percent of position players are spending their days on the golf course, the beach or with their second wives.

Ichiro, meanwhile, is forever trying to perfect his craft. Think about this: In 116 at-bats this season, he has struck out six times. That is Tony Gwynn stuff, Ted Williams style – the domain of players from a different era. Which, sure, Ichiro is. Still, that figure is almost as amazing as this: His major league career didn't start until he was 27 years old, and Ichiro is just 26 hits from 3,000.

For the next couple months, as the Marlins try to give him the at-bats to reach the milestone, that will be the big number on people's minds. Secondary to it is …

10. Clayton Kershaw's strikeout-to-walk ratio, which, as much as anything, exemplifies his excellence. After punching out a baker's dozen and walking none in his last start, it's at 20.33-to-1. In other words, every 20 strikeouts, Kershaw deigns to walk a guy.

That is how you justify $33 million a bargain. Yes, Manny Machado and Nolan Arenado at $5 million as first-year arbitration players each could generate more on the margins. And Paul Goldschmidt and Anthony Rizzo and Chris Sale and Madison Bumgarner undoubtedly bring more value with their contracts, which in their entirety cost about as much as one year of Kershaw.

And yet there's something remarkable about the most expensive player in baseball not only being the best at what he does but one of the most valuable, too, in the strictest sense of value. Baseball has proven time and again that paying a big price for something doesn't necessarily equal quality, and that's what gives the smaller-market teams hope with the disparity. They know, though, that teams are theoretically getting smarter, and that those advantages with player salaries are that much more important.

It's what scares the Dodgers so much. They know how much of a bargain they have with Kershaw. They know, too, that after the 2018 season, he can opt out of the final two years of the deal and hit free agency. And as time goes on and he pitches into his 30s, that bargain of yore may turn into something different altogether.

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