Buyer's Market

Consider the case of a worker named Edgardo, who has toiled for the same company for 12 years, since he was a raw 17-year-old. The company trained him and groomed him into a polished professional. He's not the most skilled practitioner of his craft, but he is considered well-rounded and above average at his job. In Edgardo's mind he's been a loyal and model employee. A year ago he even switched jobs at the company so that some high-priced, hotshot new hire could take over at his position.

But when Edgardo's contract is up and it's time to talk salary, the company drags its feet. Even though Edgardo, by law, can't negotiate with other employers for a few weeks, the company wants to wait and see if it can low-ball him, if demand for his services isn't high.

Sounds like fodder for a Michael Moore documentary, doesn't it? It would be if Edgardo pressed drill bits or manufactured widgets. But he's actually New York Mets third baseman Edgardo Alfonzo, whose contract expired when the 2002 season ended. Like all free agents, Alfonzo, who made $6.2 million this year, can negotiate only with his former team for the first 15 days of the off-season, a period that began on Monday, the day after the conclusion of the World Series. Last week the Mets told Alfonzo, the best-hitting third baseman on the market this year (.308, 16 home runs, 56 RBIs), they'd love to see him in blue-and-orange next season, but they won't be making an offer during that exclusive negotiating period.

"They said they thought there was going to be a market correction this year," says Alfonzo's agent, Peter Greenberg, using a Wall Street euphemism for falling stock prices. "The Mets said they wanted to follow the market, not set it."

They're not alone. Many general managers and agents are bracing for a bearish free-agent market this winter. "This will definitely be a buyer's market," says San Francisco Giants G.M. Brian Sabean, who must decide if his team can afford free agent second baseman Jeff Kent, who will be seeking an increase on his $6 million salary after hitting .313 with 37 homers and 108 RBIs this season. "Everybody is tightening their belts."

It's not just a reflection of the country's general economic malaise. To begin with, this year's crop of free agents is a lackluster one. There's no marquee star guaranteed to break the bank after being courted by several teams, as Texas Rangers shortstop Alex Rodriguez (he signed a 10-year, $252 million deal) and Boston Red Sox outfielder Manny Ramirez (eight years, $160 million) did after the 2000 season. Cleveland Indians first baseman Jim Thome, who finished second to Rodriguez in the American League home run race this season, with 52, will be the best free-agent hitter available. ( Kent is next in the pecking order.) Atlanta Braves aces Tom Glavine and Greg Maddux, who will both turn 37 early next year, will be the top starters on the market. All are All-Stars, and Glavine and Maddux are on their way to the Hall of Fame, but none carry the buzz that created past bidding wars.

That's partly because there's no one to bid. If there are few enticing players available, there are even fewer teams entering the market with loose purse strings. Call it the Curse of the Collective Bargaining Agreement. The labor deal struck in August levies a 175% luxury tax on the portion of teams' payrolls over $117 million in 2003 and also provides for revenue sharing from richer teams to poorer ones. Most teams are expected to treat the luxury-tax threshold as a de facto salary cap. Even traditionally high-spending clubs—the New York Yankees, the Los Angeles Dodgers and the Rangers all exceeded that threshold in 2002, and the Red Sox fell just short—are anxious to avoid the tax.

The Yankees, who led the majors with a $135 million payroll this season, will suffer the most under the new labor deal. If the new system had been in effect this year, owner George Steinbrenner would have had to cough up more than $30 million. "The one team we could usually count on to drive up the market was the Yankees," says one player agent. "They have made it very clear that they're not going to be big spenders."

So who might step into the market with an open wallet? The Philadelphia Phillies, anticipating increased revenue from the opening of a new stadium in 2004, are expected to vigorously pursue Thome. The Indians have already told the slugger that it will take a substantial hometown discount for them to sign him. ( G.M. Mark Shapiro plans to present an offer by the end of October.) Thome, who made $8 million in 2002, has expressed a desire to stay in Cleveland, but the Phillies could lure him by coming closer than the Indians to the $15 million per year he wants. The high-revenue Baltimore Orioles, whose $60 million payroll in 2002 leaves them far short of any luxury-tax liabilities, are also expected to be active.

Glavine and Maddux are the two most interesting cases. The Braves are intent on reducing their $93 million payroll, which would be difficult to do if both pitchers are re-signed. (They made Glavine a one-year, $8 million offer last week that was quickly rejected.) Both are still among the game's best starters, but in this market, teams will be leery of signing older pitchers to expensive, multiyear deals.