Rosenthal: Sale extension 5 years, $145 million

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I realize this is an extension, but I like this deal much more than Price’s. Fewer years. Less money overall and per year. And we already know Sale fits in the clubhouse and can win in Boston and in the playoffs.
 

brandonchristensen

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I realize this is an extension, but I like this deal much more than Price’s. Fewer years. Less money overall and per year. And we already know Sale fits in the clubhouse and can win in Boston and in the playoffs.
This is a huge year for Price. He and Boston haven’t gotten along that well since he came over here but he erased all of those bad feelings with his World Series performance.

If he can build on that, his deal is going to feel wildly different by the end. John Lackey-Esque.
 

DirtyWater90

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You know, this is such a team friendly deal, I kind of feel like Sale got taken advantage of. He REALLY wanted to come back here. But I really don't understand why deferred payments can reduce the AAV like that. Seems like such a blatant luxury tax loophole.

 

Hank Scorpio

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You know, this is such a team friendly deal, I kind of feel like Sale got taken advantage of. He REALLY wanted to come back here. But I really don't understand why deferred payments can reduce the AAV like that. Seems like such a blatant luxury tax loophole.

On one hand, the deferred money will count against the luxury threshold in the years it is paid.

On the other hand, by the time that happens, the salary cap will probably be (significantly) higher, gone, or at least have reduced penalties.
 

DirtyWater90

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No it won't
So the deferred money just doesn’t ever count? I really don’t get why the MLB would allow the Sox to avoid so much luxury tax like that but hey, I’m all for them exploiting the loophole if it allows us to keep Mookie, Xander, etc.
 
Jun 9, 2011
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I don't have ESPN+, but Buster wrote a piece this morning that referred to the Sale extension as "a mistake", "out-sized", a "significant overpay" and an "assumption of enormous risk". That seems to be in contrast with the general sentiment here that Sale took a team-friendly team. Thoughts? When I saw the headline that the Sale deal was a mistake, I assumed he would be talking from Sale's perspective for not maximizing his value...
 

flymrfreakjar

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I don't have ESPN+, but Buster wrote a piece this morning that referred to the Sale extension as "a mistake", "out-sized", a "significant overpay" and an "assumption of enormous risk". That seems to be in contrast with the general sentiment here that Sale took a team-friendly team. Thoughts? When I saw the headline that the Sale deal was a mistake, I assumed he would be talking from Sale's perspective for not maximizing his value...
I read it, it doesn’t make much sense to me. I get that he’s very concerned about Sale’s injury risk, but if anyone knows his shoulder’s condition it’s the Sox medical staff. He also claims it’s way out of line with current pitching contracts, but I just don’t see it. His comps are Corbin, Kershaw and Verlander. Of course Corbin got less, he doesn’t have Sale’s track record of dominance, and Verlander is 6 years older than Sale. Kershaw is the most logical, as he’s not much older and has been a similarly great pitcher, but of course he had already signed a 215+ million dollar contract and was probably more receptive to a (slightly) shorter extension. Maybe Price’s would have been a better contract to compare...
 

BornToRun

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The Red Sox just signed one of the top 5 pitchers in the sport to a deal that only goes into his mid 30’s at a significant discount. Injury risk aside, and all pitchers come with that anyway, when a Chris Sale is willing to leave money and years on the table to sign with you then you fucking do it. I can’t imagine being anything other than utterly thrilled with Chris’s extension.

If you would’ve asked me what he would get on the open market a year or two ago, I would have said something in the ballpark of 7/250.
 

Pozo the Clown

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...I'm honestly surprised Sale would have an opt out put in there...
Further proof that Sale is a team-first guy!

You know, this is such a team friendly deal, I kind of feel like Sale got taken advantage of.
The fact that the Sox were able to force him to agree to a team-friendly opt-out lends credence to that idea.

When I saw the headline that the Sale deal was a mistake, I assumed he would be talking from Sale's perspective...
Perhaps the mistake that he's referring to is Sale agreeing to that team-friendly opt-out! ;)
 

pokey_reese

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I read Buster's ESPN piece, and I didn't find it that outlandish. There is also a good contrasting piece (free to read) over at Fangraphs that concludes that the Sox are likely to get excess value from the contract (https://blogs.fangraphs.com/chris-sale-finally-cashes-in/).

At the end of the day, this really comes down to how high you think Sale's injury risk is, and how much you think a generic pitcher aging curve can be applied to any particular pitcher (and whether or not you think such a curve is being adjusted fast enough to keep up with the modern game), and how you view the dollar value of a win. The Fangraphs approach is to take Sale's recent production, which is obviously super good, and apply a gentle decline from the aging curve they use, so that over six seasons he goes from about 6 to 4 WAR in a linear fashion. They also make some assumptions based on the value of a win (in a WAR sense) that is inherently backwards looking.

Buster differs in that he specifically sees Sale as an injury risk that is greater than would be implied for another random pitcher, based in large part on how he missed time last year and has previously seen a downturn late in the season. He also clearly views the normal aging curve skeptically based on some comps, though it's not clear that he isn't cherry-picking those while ignoring others, and seems to believe that any pitcher contract that covers the mid-thirties should be viewed with the assumption that the decline in performance will be non-linear.

There is a certain amount of grey area in this because how you view the contract (overpay vs underpay) simply from a team value standpoint necessitates predicting outcomes, and that's not a sure thing. While the projections Fangraphs is using make sense as a year-over-year performance estimate assuming close to perfect health, would anyone really be surprised if Sale missed a few months (or most of a whole season) once over the life of this contract? Buster is also noting the more recent trend of contracts in baseball, and that we a.) don't see a ton of big extensions for mid- to late-career pitchers, and that b.) the ones we do see often don't work out. I don't believe that the Fangraphs $/WAR estimator makes a distinction between hitters and pitchers, and it assumes inflation but not deflation. It's just a matter of how much risk tolerance you want to carry.

I admit, I don't love the idea that the Sox have two of the largest pitcher contracts in the game for two guys over 30 (Sale will be any day now), while not having their position players locked up, but that's the price you pay when you fail to develop/keep home grown ace pitching.
 

chrisfont9

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So the deferred money just doesn’t ever count? I really don’t get why the MLB would allow the Sox to avoid so much luxury tax like that but hey, I’m all for them exploiting the loophole if it allows us to keep Mookie, Xander, etc.
It does count. You take the AAV in the years covered by the contract as playing years, so 5/145 = five seasons with a "cap hit" of 29m over each of those years. Even if it's a Bobby Bonilla contract where he is still getting paid 20 years later. Even if so much money is deferred during the five playing years that he only gets $1m in actual payment, it's 29m against the luxury tax.

The wrinkle here seems to be that if deferred money is done without interest, then they ratchet down the AAV hit to account for the reduced value by putting payments off over time. Here apparently that deferral is worth a total of 118.5m over the five years, meaning an AAV of 23.7m per year from 2020-2024. [Which is unbelievably low for Sale if healthy.] But no matter how you pay it out in real life, the luxury tax hit is entirely within the five playing years covered by the deal.
 

Jack Rabbit Slim

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If Sale hits his bonus incentives, how does that affect the AAV? Is it applied retroactively to just that year? Averaged over all 5 years?
 

DirtyWater90

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“Patrick Corbin was the highest-paid free agent, made all of his starts last year, is slightly younger than Sale -- and he got less money, $140 million over six years”.

Imagine writing that and thinking that you are making some great point. Apparently, according to Buster Olney, Patrick Corbin should have gotten more than Chris Sale, despite Sale being the VASTLY more accomplished pitcher with LESS injury history. Just imagine that.

Is this what passes off for journalism these days?
 

pokey_reese

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“Patrick Corbin was the highest-paid free agent, made all of his starts last year, is slightly younger than Sale -- and he got less money, $140 million over six years”.

Imagine writing that and thinking that you are making some great point. Apparently, according to Buster Olney, Patrick Corbin should have gotten more than Chris Sale, despite Sale being the VASTLY more accomplished pitcher with LESS injury history. Just imagine that.

Is this what passes off for journalism these days?
Sale is definitely better, but Corbin did put up a 5.9 win season (compared to 6.2 for Sale), and more importantly, was a free agent, so the market was able to 'decide' his value with multiple people bidding for his services. In Sale's case, he still had a year left on his deal, so there was no open market to drive his value up. Olney is simply pointing out that the free agent market for pitchers into their 30s seems to be drying up, so the Sox were just apparently bidding against themselves. I don't think he was arguing that Corbin is better than Sale, or that he should have gotten more than Sale, just that Sale may likely have gotten more than the market would have offered him next year. Again, it's a bet by both sides, both on the trends in FA contracts, as well his health. If he misses another month or two this year with shoulder problems, or loses significant velocity in September, Olney will be smug. If he stays totally healthy and finally wins a Cy Young, the Sox will look smart.
 

flymrfreakjar

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In Sale's case, he still had a year left on his deal, so there was no open market to drive his value up. Olney is simply pointing out that the free agent market for pitchers into their 30s seems to be drying up, so the Sox were just apparently bidding against themselves.
But Sale isn’t just a pitcher in his 30’s. He’s arguably the best pitcher in the game right now and a likely HOFer. Even in this quiet offseason, we saw serious money being spent on super elite talent, and I think teams would have absolutely been ready to pony up. Corbin was coming off a great year, but Sale has been doing it every year since he came into the league.
 

pokey_reese

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But Sale isn’t just a pitcher in his 30’s. He’s arguably the best pitcher in the game right now and a likely HOFer. Even in this quiet offseason, we saw serious money being spent on super elite talent, and I think teams would have absolutely been ready to pony up. Corbin was coming off a great year, but Sale has been doing it every year since he came into the league.
I don't totally disagree, but the deals that Machado/Trout/Harper signed are in no way good comps for Sale, given that they are position players and years younger. Part of this has to stem from the fact that something bad or unexpected usually has to happen for a position player to get badly injured, whereas the very act of pitching is itself harmful for the pitcher. I would have to go back and look at the data to confirm, but my guess is that teams are responding to something that suggests that pitchers in aggregate (and likely some subset) are more likely to miss x time over y season than hitters are, and it's depressing that estimated value.
 

DirtyWater90

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Fangraphs has Sale projected to produce $209 million in value over the life of the contract. Of course these are just projections but that’s pretty good surplus value on $145 million (and really less factoring in the amount of deferred money).
 

shaggydog2000

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Fangraphs has Sale projected to produce $209 million in value over the life of the contract. Of course these are just projections but that’s pretty good surplus value on $145 million (and really less factoring in the amount of deferred money).
Yeah, but all the big long term deals seem to come out with huge excess value. Trouts is even more ridiculous. But their system doesn't project injuries to players who don't have a considerable injury history. With pitchers, that can be a huge risk, and the cap related impacts are considered either. Then add on top the risk with long term contracts that poor performance due to injury or steep decline will take up both money and a roster spot in many instances for years, and it's easy to see why these contracts are coming out below projection. What a team would pay for 1 WAR on a one year contract will be different than it would on a 12 year contract. There is an inherent discount due to risk. I still love the Sale deal, but I'm just saying that the Fangraph projections aren't a great way to justify it.
 

budcrew08

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DirtyWater90

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Associated Press has more details on the Sale deal and it looks like he might have the Bobby Bonilla deal.
He gets $10M of deferred money every season of the five, but it’s not paid until 15 years after it’s earned. So he gets his 30M in 2020, then another 10 in 2035. If he plays the entire length of the contract, his final payment of 5M is in 2041, when Sale will be 52.

https://apnews.com/212442783468489a8647869bee09fa7c?utm_source=Twitter&utm_campaign=SocialFlow&utm_medium=AP_Sports
And again, all paid with no interest. Chris Sale’s contract isn’t worth anywhere close to $145 when you factor in the time value of money.

He really went above and beyond to help this team on this deal. I just hope they pay it forward and give him whatever role and perks he wants in the organization after he retires.
 

BornToRun

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And again, all paid with no interest. Chris Sale’s contract isn’t worth anywhere close to $145 when you factor in the time value of money.

He really went above and beyond to help this team on this deal. I just hope they pay it forward and give him whatever role and perks he wants in the organization after he retires.
I don’t see why they wouldn’t. This team does a good job of keeping the old guard around in some capacity after they hang it up. Off the top of my head, Mike Lowell and Pedro come to mind and I’m sure there are more.
 

chrisfont9

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And again, all paid with no interest. Chris Sale’s contract isn’t worth anywhere close to $145 when you factor in the time value of money.

He really went above and beyond to help this team on this deal. I just hope they pay it forward and give him whatever role and perks he wants in the organization after he retires.
As stated above, it's been assigned a real value of $118.5m based on the time value of money as applied to the deferred payments. Interestingly, Jake deGrom's extension has been assigned a real value of 108.9m, even though he's getting $137m total, but including deferred payments without interest. So I guess *that's* the actual market for #1 starters: 5/130-140 but with deferred cash.
 

DirtyWater90

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As stated above, it's been assigned a real value of $118.5m based on the time value of money as applied to the deferred payments. Interestingly, Jake deGrom's extension has been assigned a real value of 108.9m, even though he's getting $137m total, but including deferred payments without interest. So I guess *that's* the actual market for #1 starters: 5/130-140 but with deferred cash.
I wouldn't be so quick to say that's the market, both took discounts. I definitely think both get substantially more on the open market this year. I mean, Sale was gonna easily beat Corbin's deal.
 

chrisfont9

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I wouldn't be so quick to say that's the market, both took discounts. I definitely think both get substantially more on the open market this year. I mean, Sale was gonna easily beat Corbin's deal.
Maybe, although his shoulder. Oh, and Corbin's deal had 10m deferred without interest. Half (!!!) of Max Scherzer's 210m is deferred without interest. Price's deal should really be considered the market contract, $217m with no deferred money. But two years of collusion later and we are seeing a good $50m or so disappearing from those top-end pitcher deals.
 

DirtyWater90

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Maybe, although his shoulder. Oh, and Corbin's deal had 10m deferred without interest. Half (!!!) of Max Scherzer's 210m is deferred without interest. Price's deal should really be considered the market contract, $217m with no deferred money. But two years of collusion later and we are seeing a good $50m or so disappearing from those top-end pitcher deals.
Did Greinke's deal include deferred money? What about Kershaw?
 

Papelbon's Poutine

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Maybe, although his shoulder. Oh, and Corbin's deal had 10m deferred without interest. Half (!!!) of Max Scherzer's 210m is deferred without interest. Price's deal should really be considered the market contract, $217m with no deferred money. But two years of collusion later and we are seeing a good $50m or so disappearing from those top-end pitcher deals.
How does collusion apply when a guy resigns with his team?
 

BornToRun

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And does the unexpected nature of this offseason, slow FA proceedings and a lot of extensions, necessarily have to be collusion or is it just teams and players starting to think differently about how to approach the contracts they offer/accept?

Is it “cheap owners won’t pay me in FA so get what you can now?” for all these pitchers or does the fact that they’re a volatile asset and can easily become Matt Harvey or Dallas Keuchel by the time they hit FA play a role? Not to mention guys like Sale and deGrom clearly wanting to stay put and taking a discount to do so.
 

jon abbey

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And does the unexpected nature of this offseason, slow FA proceedings and a lot of extensions, necessarily have to be collusion or is it just teams and players starting to think differently about how to approach the contracts they offer/accept?
Dunno, there was some very dubious behavior reported by players where guys didn't get an offer for months and then got four very similar offers on the same day. I can't believe clubs would be that stupid, but I've read about that kind of thing a handful of times now.
 

DirtyWater90

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And does the unexpected nature of this offseason, slow FA proceedings and a lot of extensions, necessarily have to be collusion or is it just teams and players starting to think differently about how to approach the contracts they offer/accept?

Is it “cheap owners won’t pay me in FA so get what you can now?” for all these pitchers or does the fact that they’re a volatile asset and can easily become Matt Harvey or Dallas Keuchel by the time they hit FA play a role? Not to mention guys like Sale and deGrom clearly wanting to stay put and taking a discount to do so.
I think the fact that MLB payrolls have declined for the second straight year, in spite of record revenues, is a pretty good indicator to the overall broader picture of whatever is going on, be it collusion or whatever. Clearly the stars will still get paid well, as evidenced by the FA deals and extensions signed, but the mid level free agents are not doing well at all. I absolutely expect a strike after the CBA expires and it's not on the players, I'll tell you that much.
 

Plympton91

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Dunno, there was some very dubious behavior reported by players where guys didn't get an offer for months and then got four very similar offers on the same day. I can't believe clubs would be that stupid, but I've read about that kind of thing a handful of times now.
What day it was would determine how dubious. If it was the day after Harper/Machado signed it’s not hard to believe the teams that avoided the winners curse on them turned to option 2 at the same time.
 

Jerry’s Curl

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I think the fact that MLB payrolls have declined for the second straight year, in spite of record revenues, is a pretty good indicator to the overall broader picture of whatever is going on, be it collusion or whatever. Clearly the stars will still get paid well, as evidenced by the FA deals and extensions signed, but the mid level free agents are not doing well at all. I absolutely expect a strike after the CBA expires and it's not on the players, I'll tell you that much.
There is going to be a stoppage, no doubt.
 

Adrian's Dome

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By depressing the entire market. Collusion isn’t about screwing over one particular player.
You keep using that word, but I do not think it means what you think it means.

It isn't fair to the players that revenues are skyrocketing and contracts have (in general) not been increasing at the same rate, however, I believe that's happened more because of these names than anything else: Albert Pujols, Ryan Howard, Carl Crawford, Alex Rodriguez, Pablo Sandoval, Barry Zito, Johan Santana, Vernon Wells, Prince Fielder, B.J. Upton (and I have a feeling we'll be adding Machado and Harper to that list sooner than later)...how many teams have to get absolutely burned by huge F.A. signings and how many good young cost-controlled players do you have to see before you realize it isn't owners collectively getting together and conspiring to screw over free agents so much as GMs getting smarter and realizing that cutting a big fat check to "the guy" is insanely more likely to hamstring you than it is get you a WS title?
 

chrisfont9

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So more like systemic buyer’s remorse? Maybe. Obviously only a small number of people know the actual reason, and they aren’t talking. But the top-end contracts for star players ARE still happening, and the dollar commitments are going up, and its coming out of the hides of mid-level veterans. So, if you don’t believe in collusion (a deliberate plot among competing owners to reduce salaries—see? I know what it means!), then I’d maybe point to the CBA and its perverse incentives.

It’s always a little weird to talk about “market forces” anyway, right? It’s not like selling a million pickup trucks to 300 million potential buyers. It’s just a handful of old rich dudes doing whatever the fuck they want. Which is why actual collusion makes a ton of sense to me.
 

Adrian's Dome

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So more like systemic buyer’s remorse? Maybe. Obviously only a small number of people know the actual reason, and they aren’t talking. But the top-end contracts for star players ARE still happening, and the dollar commitments are going up, and its coming out of the hides of mid-level veterans. So, if you don’t believe in collusion (a deliberate plot among competing owners to reduce salaries—see? I know what it means!), then I’d maybe point to the CBA and its perverse incentives.

It’s always a little weird to talk about “market forces” anyway, right? It’s not like selling a million pickup trucks to 300 million potential buyers. It’s just a handful of old rich dudes doing whatever the fuck they want. Which is why actual collusion makes a ton of sense to me.
The owners are already making Scrooge McDuckbucks either way.

GMs, however, lose their jobs when they give out ridiculous contracts that the owners have to bear the burden of, and even if they don't, only a handful of teams can absorb your generic Pablo/Hanley/Rusney-level screwups and still remain competitive. I really think believing all all owners are whispering to each other to not pay the minions is ridiculous when it's very clear the issues are the CBA (for the players) and that all contracts are 100% guaranteed (for the FOs.)

It's surely going to be an interesting time when the current CBA is up...and by interesting, I mean ugly.
 

chrisfont9

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The owners are already making Scrooge McDuckbucks either way.

GMs, however, lose their jobs when they give out ridiculous contracts that the owners have to bear the burden of, and even if they don't, only a handful of teams can absorb your generic Pablo/Hanley/Rusney-level screwups and still remain competitive. I really think believing all all owners are whispering to each other to not pay the minions is ridiculous when it's very clear the issues are the CBA (for the players) and that all contracts are 100% guaranteed (for the FOs.)

It's surely going to be an interesting time when the current CBA is up...and by interesting, I mean ugly.
Yeah, having so many players from the top end (except Mookie really) get paid in advance means no real divided loyalties among the players.
 

bradmahn

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The compensatory pick process that arose from the last CBA is the real culprit here, which the players agreed to. Teams have effectively substituted dollar value on free agent contracts with draft picks and the players get it from both sides, fewer dollars and more emphasis placed on the assets used to replace the aging union members.
 

Adrian's Dome

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If your first sentence is true, then is the second one necessarily true? Or only a few teams choose to take these on?
Why can't they both be?

An owner can still be making tons of money and still not be able to afford to pay out 50m a year (in that specific example) for zero (or negative) production. The Sox can absorb that loss, to a degree. It's not quite as simple for Tampa, Oakland, or Milwaukee.
 

wade boggs chicken dinner

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So more like systemic buyer’s remorse? Maybe. Obviously only a small number of people know the actual reason, and they aren’t talking. But the top-end contracts for star players ARE still happening, and the dollar commitments are going up, and its coming out of the hides of mid-level veterans. So, if you don’t believe in collusion (a deliberate plot among competing owners to reduce salaries—see? I know what it means!), then I’d maybe point to the CBA and its perverse incentives.
We've been talking about this in the baseball is broken thread but I don't think it takes a genius to figure out what has happened.

Teams have figured out that it's in their best interest to not try to win. if you're not trying to win, there is no reason to sign FAs. So you have a bunch of teams that aren't trying to sign FAs; a bunch of teams that are capped out already; and then a few more teams who are trying to win but don't have the position spot open on their roster, and voilà - it's a buyer's market.