In free agency, timing is everything
On December 5, 2016, the Yankees announced they had agreed to a one-year, $13 million dollar contract with 37-year-old Matt Holliday. Coming off of an injury-plagued 2016, where he appeared in only 110 games, the Cardinals declined their $17 million dollar team option on Holliday, allowing him to hit free agency after a season where he hit 20 HR, 62 RBI, .246/.322/.461, which were career lows in AVG and OBP. Nonetheless, Holliday made a ton of sense for the Yankees, as he could fill in at first base, and the corner outfield positions, while stepping in as the every day designated hitter. Additionally, Holliday could provide the Yankees with right-handed power, as well as veteran leadership, and postseason experience.
At the time, the Yankees contract with Holliday seemed like a fair value, given the needs he would fill for the team, as well as his history of success. However, the next day, the Red Sox signed Gold Glove first baseman Mitch Moreland to a one-year, $5 million dollar contract, coming off of a year when Moreland hit more HR (22) and had nearly as many RBI (60) as Holliday. Moreland also has a premium glove at first base, and is six years younger than Holliday, yet the Red Sox were able to get him for $8 million less than the Yankees paid Holliday.
Looking around the rest of the league, there were many contracts signed by free agents that further put the Yankees’ signing of Holliday into question.
- Carlos Gomez, who still ranks amongst one of the better defensive center fielders in baseball, and hit 13 HR, with 53 RBI and stole 18 bases in what was widely considered his worst year in the major leagues, signed with the Texas Rangers on December 13th to a one-year, $11.5 million dollar contract
- Jose Bautista, one of the most prolific sluggers in baseball since 2010, who in only 116 games still managed to hit 22 HR, with 69 RBI and a .817 OPS, signed a one-year, $18 million dollar contract with the Blue Jays on January 18th, receiving only $5 million more than Holliday despite averaging 36 HR, 93 RBI, and a .929 OPS since 2010.
- Michael Saunders, who is only 30 years old, plays the same positions as Holliday, and was an All Star in 2016 after hitting 24 HR with 57 RBI and a .253/.338/.478 slash line, signed a one-year, $9 million dollar contract with the Phillies on January 19th.
- Mark Trumbo, who led the AL with 47 HR in 2016, while driving in 108 runs with a .850 OPS, received a three-year, $37.5 million dollar contract from the Orioles on January 20th, giving him an average salary of $12.5 million per year, less than Holliday will make in 2016.
- Brandon Moss, a teammate of Holliday in St. Louis who serves the same function as Holliday at this point in their careers (DH, 1B, OF) signed a two-year, $12 million
- Both Mike Napoli, who led the AL Champion Indians with 34 HR and 101 RBI at age 34, and Chris Cater, who led the NL with 41 HR at age 29 yet was non-tendered by the Brewers, both remain free agents with only a week to go until spring training.
As this timeline shows, timing is everything when it comes to free-agency; when the Yankees signed Holliday, the market for similar players had not yet been set, making $13 million seem like a reasonable contract for a steady, veteran bat. Looking at some of the other contracts that were given out after Holliday’s signing, we can see that the Yankees may have in fact overpaid for Holliday, given the lesser value of contracts given out to players such as Saunders and Moss, whom could’ve given the Yankees more versatility for the same price, as well as the fact that sluggers such as Napoli have yet to find a home. By signing early on in the free-agency process, Holliday not only set his own market, but likely made himself at least an extra $4-5 million dollars in the process.