How much did the Qualifying Offer system hurt Ian Desmond?

One day later, it’s still shocking Ian Desmond settled for a one year, $8 million contract only two years after rejecting a 5 year, $89.5 million extension from the Nats, calling it a “terrible deal.”

In the immediate aftermath of Desmond’s signing, the conventional wisdom seems to be coalescing around the idea he was disproportionately hurt by MLB’s bizarre qualifying offer system, requiring the team that signs him to forfeit a draft pick in next June’s draft. Yesterday, in my reaction piece to the Desmond signing, I addressed the role the qualifying offer played in Desmond’s depressed market value.

The qualifying offer, however, only partially explains why the market for Ian Desmond was so soft this winter. Twenty different free agents received qualifying offers last November and all of them found homes before Desmond (12 of them signed with new teams requiring the forfeiture of a draft pick). It says something about Desmond’s perceived value that the Rangers only signed him to a one year contract. Even after crossing the threshold where they decided to give up a draft pick to sign him, Texas still didn’t think he was worth a second or third year.*

*It’s worth noting by signing Desmond to one year deal, Texas retains the option of offering Desmond a qualifying offer next offseason and maybe recouping their lost draft pick. But the qualifying offer salary next year will be more than double Desmond’s $8 million salary this year, making it far from certain Texas would offer one.

The more credible explanation for Desmond’s depressed market value is his poor performance. As noted yesterday, Desmond struck out at a rate of 29.2% last season, a staggering number considering his on base percentage was only .290. Put simply, he failed to put the ball in play more often than he reached base. This low contact/low on base skillset is increasingly inconsistent with the trend around baseball. Consider, for example, the strikeout rates for the starting nine World Series Champion Kansas City Royals and compare it to Desmond’s 29.2% last year:

Lorenzo Cain – 16.2%

Mike Moustakas – 12.4%

Eric Hosmer – 16.2%

Alex Gordan – 21.8%

Kendrys Morales – 16.1%

Jarrod Dyson – 16.4%

Salvador Perez – 14.8%

Ben Zobrist – 11.4%

Desmond brings a high-risk/high-reward approach to hitting, common in the modern era. But as power pitchers inundate the game and strikeouts reach historic levels, teams are increasingly turning to an old school approach, players who can put the ball in play and avoid giving the opponents easy outs.

While the qualifying offer certainly dimmed Desmond’s value, it’s instructive to look at the team that didn’t need to forfeit a draft pick to sign him—the Nats. After trading Yunel Escobar this winter, the Nats actually had an opening in the middle infield, and for much of the winter could have brought Desmond back to play SS or 2B. Instead, the Nats followed baseball’s trend, turning to Daniel Murphy and his high-contact style of hitting. Murphy only struck out 7.1% of his plate appearances last year, less than a one fourth of Desmond’s rate. Oh, and the Nats had no problem forfeiting a draft pick to bring him in.

As I wrote yesterday, there were many factors why Desmond’s market fell over $80 million in two years. By focusing on the qualifying offer and ignoring everything else, people are failing to see the full picture. If Desmond doesn’t see the full picture either, he may have the same problem again next season.

 

 

Reaction to Ian Desmond signing with the Rangers

  The Ian Desmond free agency saga finally ended on a sadder note than any of us could have predicted two years ago. This morning, it was announced Desmond was signing with the Texas Rangers for one year and $8 million dollars, reportedly to play left field.

It’s a staggering financial failure for Desmond, who just two years ago was offered a 7 year, $107 million contract extension from the Nats (in reality, the offer was actually 5 years and $89.5 million since the 7 year offer bought out the last two years of Desmond’s arbitration with the Nats). At the time, Desmond’s decision to turn down the money was a subject of great debate among fans and reporters who cover the Nats. Some of us thought $89.5 million for 5 years was a fair price for a shortstop entering his decline years at the age of 30. Many supporters of Desmond bought in to the argument of Desmond and his agent, that he was a rare offensive talent playing a premium defensive position. Desmond supporters pointed to Elvis Andrus’ 8-year $120 million contract signed in 2013 and Jacoby Ellsbury’s 7 year, $153 million contract signed that same year.

There were four factors working against Desmond his fans just refused to see.

1. Age. Elvis Andrus signed his lengthy extension with the Rangers when he was 24 years old. Desmond turned down his extension from the Nationals at age 28, a world’s difference in time for a shortstop. Middle infield, put simply, is a young man’s game. Last season, there were only 5 qualifying shortstops aged 32 years and older, and only two older than 34. For this reason, I always believed the better “comp” for Desmond was Jhonny Peralta’s 4-year, $52 million contract signed in 2013. Desmond to his credit has displayed remarkable durability in his career, logging 154 games or more five times since his first full MLB season in 2010. Yet, Desmond always displayed solid but unspectacular defense and range at shortstop, and never showed a skill set similar to, say, Omar Vizquel making him seemingly exempt to the laws of aging. Desmond’s future was likely somewhere other than shortstop, a problematic fact for someone whose perceived value was as a shortstop. Even more troubling, Desmond began to show…

2. Decline. Desmond’s breakout season came in 2012 when he hit a career high 25 home runs. Desmond’s power alone was enough to make him an elite offensive shortstop in MLB, yet in 2012 he still struck out at a high rate of 20.7%. In 2013, the year immediately prior to his 7 year contract extension from the Nats, Desmond strikeout rate rose slightly to 22.1%. In the offseason that year, Mike Rizzo likely factored some decline into his contract offer, but even he didn’t predict what happened in 2014. Desmond’s strikeout rate rose to 28.2% and his on base percentage fell from .331 to .313. Desmond still had enough power (24 HRs) to be an elite offensive shortstop, but the trends were heading in the wrong direction one year away from free agency. Unfortunately for Desmond, the trends accelerated. His strikeout rate rose to 29.2% in 2015 and his on base percentage fell to .290. Ian was no longer an elite offensive shortstop, but instead someone with the chance to be an elite offensive shortstop, if only he could bounce back. This is a dicey proposition for a team looking to invest big long-term money in a free agent, especially when the free agent costs the forfeiture of a…

3. Draft pick. Ian Desmond became the most dramatic example of new trend in baseball where marginal players are disproportionately hurt by the free agent qualifying offer system. Teams signing free agents have long forfeited draft picks, but the most recent collective bargaining agreement between the owners and the MLBPA made teams forfeit bonus money along with the draft pick when signing a free agent that turned down a qualifying offer from his old team. In the past, teams losing high draft picks could compensate by spending money in the later rounds. Now, by losing the bonus “slot” money that comes with the draft pick, many free agents aren’t more valuable than the pick forfeited. Some free agents have the talent to clear the bar and overcome the disincentive to sign as a free agent. The Tigers perceived Jordan Zimmermann’s value to their rotation to be so high the loss of a first round pick was not a concern. Desmond’s age and decline, however, meant he was more valuable to a new team as a one of two year flyer, hoping he regains his offensive form. This still might not be a huge problem if not for the lack of…

4. Job openings. Outfielders can be moved from right to left to center. Teams need at least five starting pitchers. Shortstops, however, are like quarterbacks in football. There are only 30 starting jobs in the Major Leagues. For Desmond, the math just didn’t add up. Most teams without established incumbent shortstops had young players to whom they wanted to give an audition. Heading into this winter, only a few teams were possible landing spots for Desmond: the White Sox, Padres, Mets and a few others. One by one, these teams found more affordable, short-term options that wouldn’t cost them a draft pick. The market dried up and it dried up fast.

As this winter went on and Desmond’s situation looked more and more precarious, I became more convinced he would sign a one year contract. When Yoenis Cespedes didn’t get the 9-figure contract offers he was expecting, he made sure to sign a contract with the Mets with an opt out after one year. His thinking is straight forward: if the market isn’t there this year, have a great season and try again next winter. Dexter Fowler signed a one year contract with the Cubs after his market also didn’t pan out the way he intended. Desmond not only needed a year to reestablish his reputation as an elite offensive shortstop, a one year contract might have put him back on the market at a more favorable time, when there are more jobs available.

Now, he has signed a one year deal, but he won’t get to play shortstop. Desmond’s perceived value was built around the proposition he’s an elite talent at a premier position. Now, instead of being an elite shortstop, he’s an average outfielder. Perhaps he’s hoping teams will still view him as a shortstop next offseason, but it’ll be hard if he hasn’t played the position in a year.

As the season got closer and Desmond still hadn’t signed, I started to think Desmond would be better off waiting until after the June MLB draft when teams would no longer have to forfeit a draft pick to sign him. Not only would he be more marketable, but he’d have over two months for jobs to open up as young shortstops fail and incumbents become injured. Desmond could have been huge bargain for a contending team in June with a shortstop opening. A big second half could have put Desmond in line for a big 3 or 4 year contract next winter. A few players though, notably Stephen Drew, have tried that approach and it didn’t quite work out. Desmond also probably wanted to play a full season, and it’s hard to blame him.

After turning down the Nats’ contract offer two years ago, Desmond told the Washington Post’s Adam Kilgore “There have been a lot of people that have come through this game that have sacrificed a lot for us…I don’t want to sign a deal that is so bad that a future shortstop gets screwed because I signed a terrible deal. I’m not going to be that guy, that kink in the chain. I’m going to get a fair deal, or I’m just going to wait.”

Now Desmond has the worst of both worlds. He waited and he waited and he signed a contract to play a position other than shortstop with $81.5 less in guaranteed money. Desmond lost in every possible way, and for those of us who enjoyed seeing him play in a Nationals uniform, the ending couldn’t be sadder.