The Cincinnati Reds and Free Agency - A preview of the 2017-18 offseason

On October 1, the 2017 regular season will end.  A couple days after that, as per the norm, the postseason will commence.  By Halloween (or so) a team not from Cincinnati will be crowned as the new or repeating champions.  And roughly a week or so after that, any player with free agent status will be eligible to be wined, dined, and signed by one of the 30 MLB teams in a frenzy of activity that usually peaks in mid-December.

This year, teams will have the luxury of competing for such players as Yu Darvish, JD Martinez, and Jake Arrieta.

Here's a prediction for you:

The Cincinnati Reds will not sign one of the premier free agents this offseason.

That's not a prediction based on any particular knowledge of who is in the free agent class, how they might fit into the Reds' organizational makeup, or what the payroll budget might be for the Reds in 2018.  Rather, it's a simple extrapolation of a trend that has a lot of data behind it.

I know I'm not breaking any new ground when I suggest that the Reds tend not to be super active in free agency.  But did you know just how inactive this team has been over the last 40 years?

What I did was this: I looked up the top 15 free agents in every offseason since the beginning of the free agency era (the winter of 1976-77) and recorded some basic data about each one.  To determine who the top 15 free agents in any given season were, I used Baseball-reference as the book of record for which players were free agents in a given offseason and then I ranked those players by the total WAR they had recorded in the prior three seasons.

There are some flaws with this method.  I'm guessing that Baseball-reference, as good as it is, is not a complete and exhaustive database on player transactions, especially in the early years of free agency.  It is also taken as a given that the past three seasons is not necessarily the best determinant of future value.  Take, for example, one of the top 15 free agents from last winter, Trevor Plouffe.  He compiled some halfway-decent WAR numbers by being an everyday third baseman with a solid glove and a bat capable of hitting the ball out of the yard with semi-regularity.  He also went to the DL three separate times in his 2016, meaning that teams weren't tripping over themselves to sign him for the 2017 campaign.

Nevertheless, fifteen free agents per year for 41 offseasons, chosen by an objective methodology, gives us 615 data points to examine.

Want to guess how many of those 615 signed with your favorite ball club?

Before you come up with a number, try to think about what has happened in the last 41 years:

• The Reds were a bit of a mini-dynasty when free agency commenced.
• Nonetheless, over this 40+ year period of time, the Reds have been pretty much exactly average. From 1977-2016, the Reds were five games under .500, went to the postseason five times (and were screwed in 1981; Never Forget), and won it all once. 2017's results will dig the team a bit further under the .500 mark for the free agency era, but that'll still work out to averaging 80 or 81 wins per year.
• The free agency period has seen at least one (and perhaps two or three) episodes of league-wide collusion.
• There used to be a "free agency draft" which limited competition for free agents, in which franchises had to submit an entry for the right to offer a contract to a player.
• The amount of money in the game has exploded, via the emergence of cable TV, digital media, luxury suites, etc.
• Expansion has occurred a few times.
• There's been an increase in access to players around the world.

The point of all that is that "the free agency era" is not really a single monolithic era at all, but perhaps more like 4 or 5 distinct eras, some of which looked absolutely nothing like where we are today.  Now then, with the reminder that the baseball world has changed drastically in the last forty years, how many of these 615 representative free agents signed with the Reds?

Two.

This is orders of magnitude lower than any other franchise:

So on the bottom of the list, we have three franchises that are relative youngsters, having been born through expansion measures during the 1990s (the Marlins, for what it's worth, have signed 12 top free agents since their inception), we have a team that needed to relocate from one city to another due to a variety of reasons, and we have the Pirates, who perhaps embody the best natural comparison point to the Reds in terms of history, market size, and general attractiveness to a given top tier baseball player.

Just for the sake of completeness, here are the teams who have been most active in free agency:

New York, Boston, Los Angeles, San Francisco, Dallas.  The data checks out.

One of the surprising things in looking through this data is that the best free agent the Reds have ever signed did not qualify as a "top 15" free agent in the year of his signing. After the 1983 season, the Reds signed rightfielder Dave Parker, who had totaled just 0.8 WAR over the previous three seasons.  Parker, in fact, was making more news for his involvement in baseball's cocaine scandals of the early 1980s than he was for his baseball talent.  Injuries, drug use, and weight gain all contributed towards suppressing Parker's value.  And, of course, Parker had grown up in Cincinnati.

The signing was not a slam dunk win but it wasn't devoid of success either.  Parker played nearly every day for four seasons, totaling 4.7 WAR, almost completely driven by an excellent 1985 season in which he finished 2^nd in the MVP race.

The first "major" free agent signing by the Reds came shortly after their championship season in 1990.  While Tom Browning wasn't the team's ace, he was their workhorse, accumulating 728 innings of 106 ERA+ pitching from 1988-1990, good for 10.1 WAR over that period.  Perhaps not wanting to squander the civic goodwill (and financial spoils) that come with a World Series win, the Reds violated their team policy of not giving out contracts longer than three years, giving a guaranteed $12.5M over four years, so as to not lose Browning to the Giants.

In short, Browning more or less fell apart.  In 1991, he was a workhorse (230 IP) who led the league in home runs and earned runs allowed.  Thereafter, he was mostly inactive, totaling just 241 innings in the next three seasons.  The final ledger was not pretty: 2.3 WAR from Browning during the 1991-1994 stretch.  If on average, the cost of a free agent win was about $1M during that time, then Browning's contract represented an overpay of about ten wins.  Not the worst contract issued that winter (hello, Darryl Strawberry!), but it obviously wasn't good.  One wonders how much psychological damage this signing did to the Reds' front office over the next few years, when the Reds were decent but not yet swamped by the coming salary tides.

There is one more free agent signed by the Reds who qualifies for this particular list.  In 1994, Ricky Bones had a breakout year with the Brewers, throwing 170 innings in a strike-shortened year of 146 ERA+ baseball.  Then a solid follow-up season in 1995.  And then a disastrous 1996.  The sequence both led to Bones landing on my arbitrary list (7.2 WAR in the three-year stretch) and the bad season acted like some sort of bat-signal telling team management, "Here's one of us".

There is no need to go into detail.  Most of you, even the old ones, won't remember Bones at all.  Signed for $600,000, Bones threw 17 innings of double-digit ERA quality on the board, leading to his outright release in May, just 5 weeks after his Queen City debut.

This, of course, is not a comprehensive history of free agents and the Reds, but it's a decent start to a Wiki entry at least.  I find two things interesting in this exercise:

First, I knew that the Reds history with free agency was meager, but not that meager.  It's interesting to me to consider the question of why.  For every reason and excuse we could come up with to explain why the Reds haven't signed a major free agent in over 25 years, we'd need to ask why those reasons don't apply in perpetuity to the Royals (Charlie Leibrandt, David Cone, Alex Gordon) or the Twins (Kirby Puckett, Paul Molitor, Shannon Stewart) or the Indians (Dennis Martinez, Kenny Lofton, Edwin Encarnacion).  Obviously, these teams aren't in the running for big names every offseason, but they make a splash from time to time.  Is it more likely that the Reds don't have the requisite resources to do the same?  Or that there is some inherent conservatism that has linked owner after owner, GM after GM?  Maybe it's some of both.

The other interesting thing that emerges is that as best as I can measure, the vast majority of these big-time free agent deals are inefficient.  What I mean by that is that by having data on free-agent salaries and prior WAR values, I can come up with crude estimates of the market value of an extra win.  And then based on the resulting success of the player signed post the free agent contract, I can calculate whether a contract provided positive or negative surplus value.

I wouldn't say that the data or my analysis is good enough to publish, but there is enough meat there to say that a very significant number of free agent deals (if not an overwhelming majority) end up looking very bad by the time the contract is over.  We probably know this already from an evidential and from an academic standpoint.  We're treated to stories every year about some wilting player, deep into the slough of a dreadful season, with tens of millions left remaining on his contract (why couldn't the Cardinals have signed Albert Pujols???).  And then from the discipline of game theory, we are aware of the winner's curse, in which any victor in an auction-type setting (i.e., free agency) must by definition value the object more than any other competitor.

So if I were to tell you that the Yankees have signed way more free agents than any other team and I were to tell you that the Yankees have received more negative surplus value from their free agents than any other team, this should be a logical and expected conclusion.  And while World Series titles will prove an imperfect arbiter of the value of the strategy to pursue free agents (the Yankees, a perennial free agency hog, have won nine championships since the advent of free agency; the Rangers have won none), it does seem safe to posit that teams that pursue free agents more regularly tend to be better than teams who don't.

Which is probably a long-winded way to say that while a team being efficient with its dollars is important, there are no rings awarded for being the most efficient team in the league.  The Reds, by virtue of practically never signing anyone of note, have been one of the most successful teams in terms of avoiding negative surplus value from free agents.  While that's potentially noteworthy, it's not very satisfying.  Quality talent in a free market environment costs money.  Circumstantial evidence from similar Midwestern cities suggests that the Reds could afford to take a few more chances on talented and available players to fill their most glaring roster deficiencies.  Here's hoping they try.