GIG BASEBALL'S ECONOMY
UNSIGNED ALL-STARS, CRATERING SALARIES, A SYSTEM THAT FAVORS PART-TIME WORK: A NEW PARADIGM HAS COME TO BASEBALL, AND IT IS NOT GOOD NEWS FOR PLAYERS
THE DODGERS are the Uber of baseball. They have disrupted traditional full-time work with job sharing among enough players to fill two teams.
Los Angeles has won two consecutive National League pennants without any player starting 140 games at one position or pitching more than 175 innings. They have used at least 52 players in all four seasons under president Andrew Friedman, after doing so just twice in the previous 125 years.
But L.A. is far from alone in its disruption. It just happens to be the most artful of the many teams creating a boom in baseball that echoes the current business world: the gig economy.
A gig economy upends the traditional labor paradigm in favor of short-term work and independent contractors. Data from the Federal Reserve last summer found that nearly one out of every three adults engaged in gig work, either as a primary or secondary source of income. Think Uber drivers, temp workers, delivery drivers, baristas, freelancers and now major league baseball players. "Not too many teams run the same eight, nine guys out there every day," says Brewers president David Stearns. "We are getting better as an industry at preparing for the unforeseen happenstance. Really smart clubs 10 to 15 years ago recognized it. Now the industry is recognizing it."
The upshot of a gig economy for players is familiar to American workers: more jobs, but the work often is part-time and the pay is declining. A record 1,271 players appeared in major league games last year. That's a 15.8% increase in jobs since 1998, the first season with 30 teams. Yet the average salary went down last year for the first time since 2004—while revenues again went up.
Welcome to the age of what one executive calls "the puzzle-piecing of the roster," where analytics-savvy general managers play a game of arbitrage with players. Baseball's gig economy is good for players on the margins, such as relief pitchers, utility players and young players with minor league options (who allow roster flexibility)—all at least get a foot in the door. It is good for analytics departments, who continue to gain organizational power, especially over managers. It is not good for the veteran player.
Just ask DJ LeMahieu, Jed Lowrie and Brian Dozier, all former All-Star second basemen who hit free agency this winter. All of them signed for less guaranteed money than past free-agent second basemen Omar Infante and Luis Castillo (chart, below). Tellingly, none were signed with the promise Infante and Castillo received: to be everyday second basemen for multiple years. LeMahieu (two years, $24 million with the Yankees) and Lowrie (two years, $20 million with the Mets) were told to prepare to play multiple positions. Dozier signed a one-year, $9 million deal with the Nationals.
With all this job sharing, it should be no surprise that the free-agent market is a sluggish one for the second straight winter. The gig economy is bad for free agents, who tend to be older and more expensive, because analytics prefer younger players and job-sharing arrangements. Players don't have to like this gig economy, but they better get used to it, at least until they address issues in the next collective bargaining agreement. (The current one expires on Dec. 1, 2021.) The gig economy isn't going anywhere in the short term, not as teams such as the Dodgers succeed with it. In four seasons under Friedman since 2015, L.A. cut payroll by $100 million while using 214 players, only three of whom started 140 games at one position. Meanwhile, L.A. has signed none of the 17 free agents who signed for more than $80 million in those years.
The results are hard to argue with: In those four seasons L.A. won the NL West every year, led the majors in attendance and were second to the Cubs in wins. In baseball's new gig economy, the Dodgers are getting five-star ratings.
WORKERS' COMP
PLAYERS 33+ WITH 125 GS
IN 2002, at the height of the Steroid Era, 34 players age 33 and older started at least 125 games, a modest number of starts for a regular. Only nine such players were given that kind of workload last year—a 74% decline in 16 years. Only two of those players found regular work in the NL: Nick Markakis, an All-Star who re-signed with the Braves for a one-year deal at $6 million, and Joey Votto. Overall, starts by players 33+ suffered a whopping one-year decline last year of 41%, hitting their lowest level in the 21 seasons with 30 teams. So much for modern medicine and training extending careers.
[The following text appears within a diagram. Please see hardcopy or PDF for actual diagram.]
35
30
25
20
15
10
5
0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
CF
1978
BILLY NORTH
82 games
2018
CODY BELLINGER
50 games
LF
1978
DUSTY BAKER
142 games
2018
MATT KEMP
69 games
SS
1978
BILL RUSSELL
151 games
2018
CHRIS TAYLOR
73 games
2B
1978
DAVEY LOPES
143 games
2018
BRIAN DOZIER
40 games
1B
1978
STEVE GARVEY
161 games
2018
CODY BELLINGER
85 games
3B
1978
RON CEY
158 games
2018
JUSTIN TURNER
90 games
C
1978
STEVE YEAGER
72 games
2018
YASMANI GRANDAL
110 games
RF
1978
REGGIE SMITH
121 games
2018
YASIEL PUIG
107 games
LA LA LAND
The set lineup is dying. The 2018 Dodgers won the pennant without any player starting more than 110 games at one position. Forty years earlier, the Dodgers won the pennant with six players starting more than 110 games at one position.
W IS FOR WANING
The marquee starting pitcher is endangered. As starters throw fewer innings, they accumulate fewer wins, and fewer wins means less prestige. As recently as 2012 starting pitchers accounted for 71.5% of all wins. Last year that percentage dropped to 62.3, an all-time low.
[The following text appears within a diagram. Please see hardcopy or PDF for actual diagram.]
1800
1600
1400
1200
1000
800
2012
2013
2014
2015
2016
2017
2018
2019
▪: STARTING PITCHERS
▪: RELIEF PITCHERS
SECOND LIVES
This winter, former All-Star second basemen DJ LeMahieu, Jed Lowrie and Brian Dozier all signed deals significantly less than previous players at their position
[The following text appears within a chart. Please see hardcopy or PDF for actual chart.]
1YR
2YR
3YR
4YR
5YR
2018
BRIAN DOZIER
AGE 31
WAR 1.0
OPS+ 88
CONTRACT YEARS
$9 MILLION
1YR
2YR
3YR
4YR
5YR
2018
JED LOWRIE
AGE 34
WAR 4.8
OPS+ 120
CONTRACT YEARS
$20 MILLION
1YR
2YR
3YR
4YR
5YR
2018
DJ LEMAHIEU
AGE 30
WAR 3.0
OPS 88
CONTRACT YEARS
$24 MILLION
1YR
2YR
3YR
4YR
5YR
2013
OMAR INFANTE
AGE 31
WAR 2.5
OPS+ 115
CONTRACT YEARS
$32.3 MILLION
1YR
2YR
3YR
4YR
5YR
2007
LUIS CASTILLO
AGE 31
WAR 2.8
OPS+ 94
CONTRACT YEARS
$29.9 MILLION
*Contract year stats
PEAK CONCERNS
THE AGING CURVE
THE DROPOFF last year in total starts by veteran players was stunning. Players age 33 and older started fewer games last year than they did even in 1982, when there were four fewer teams and 9,720 fewer possible starts. Let that sink in: Older players are less useful now than at any point in at least a generation.
58% decrease in games by players age 33+ since 2006
Think about that when you think about free agents Bryce Harper or Manny Machado signing contracts beyond seven years or paying anyone elite dollars at 33 and older. Players past their 33rd birthday are having a hard time finding jobs, including outfielders Carlos Gómez, Carlos González, Adam Jones, Melky Cabrera and Hunter Pence.
21% increase in games by players 25 and younger since 2006
MARKET CORRECTION
Three years ago teams shelled out big for "innings eaters" Jordan Zimmermann and Wei-Yin Chen. Both were busts. Teams no longer value workhorses in the same way, as Lance Lynn and and Dallas Keuchel have found out.
[The following text appears within a chart. Please see hardcopy or PDF for actual chart.]
1YR
CONTRACT YEARS
2YR
3YR
4YR
5YR
DALLAS KEUCHEL
AGE 31
W-L 76--63
ERA+ 108
FIP 3.72
UNSIGNED THROUGH FEB. 1*
1YR
2YR
3YR
4YR
5YR
LANCE LYNN
AGE 31
W-L 82--57
ERA+ 110
FIP 3.67
CONTRACT YEARS
$30 MILLION
1YR
2YR
3YR
4YR
5YR
WEI-YIN CHEN
AGE 29
W-L 46--32
ERA+ 110
FIP 4.14
CONTRACT YEARS
$80 MILLION
1YR
2YR
3YR
4YR
5YR
JORDAN ZIMMERMANN
AGE 29
W-L 70--50
ERA+ 118
FIP 3.40
CONTRACT YEARS
$110 MILLION
*Career stats through contract year
RELIEVERS ON PARADE
MLB has set a record for most relief appearances for four consecutive seasons. From 1998 through 2018 relief appearances have increased by 37%, from 4.9 per game to 6.7 per game.
37% SINCE 1998
Most Relief Appearances
1. 2018: 16,340
2. 2017: 15,657
3. 2016: 15,306
4. 2015: 15,108
5. 2012: 14,523
WHY HAS THE GIG ECONOMY TAKEN OFF?
1 INCREASED SUPPLY
The talent pool is growing, thanks to improved training on both amateur and professional levels. "In creating supply, the industry is a little better at scouting and definitely better at development," says a top executive.
2 ADVANCED ANALYTICS
The purpose of advanced analytics is to seek any incremental edge, which often means job sharing in the form of platoons, matchups and "super utility" players.
3 SPECIALIZED PITCHING
Pitching changes per game are up 37% in the same period (4.9 to 6.7). With all those relievers, nowhere is the gig economy more obvious than in starting pitching. Work for starters continues to decline so much that the Rays started a growing trend by using an "opener," a matchup reliever to start the game.
4 BIAS AGAINST OLDER PLAYERS
Baseball teams have lost confidence in players in their mid-30s to be everyday contributors. It started with testing for PEDs (2003), continued with the banning of amphetamines (2006), and has accelerated in the past five years as pitch velocity and spin have increased, a trend that favors younger players.
5 GROUPTHINK
Teams essentially operate with the same set of numbers, and trust in those numbers is uniform and thorough. Oakland A's president Billy Beane joked years ago that decision makers had become actuaries. "What we're seeing now is what started out as small market principles being applied by big-market teams," said one club official.