Why Blue Jays may have to add an extra year to land a top free agent

On the Blue Jays offseason edition of Over/Under, Arden Zwelling & Ben Nicholson-Smith debate how much the Blue Jays will spend in free agency over the winter.

As the off-season forges on, it’s become clear that the Toronto Blue Jays are likely to land an impact player. What’s unclear is who that player turns out to be, considering they’ve been linked to just about everyone who will command top dollar.

In recent days, one possible route to landing a difference maker has become apparent as there are multiple reports indicating a significant gap between the New York Yankees and DJ LeMahieu in negotiations. LeMahieu is a perfect fit for the Blue Jays from a positional standpoint as a versatile infielder, he would bring a contact-heavy dimension to a power-focused lineup, and signing him would rob a division rival of a crucial cog. Although the Blue Jays front office wouldn’t admit to wanting him “desperately”, as has been reported, their interest is logical and the opening seems to be there.

That doesn’t mean you should pencil LeMahieu into the Blue Jays' starting lineup for 2021, but it does mean they are in a familiar situation. Last year, the club had to entice Hyun-Jin Ryu to come from a team in the Los Angeles Dodgers that had the power to outbid them, and may have been preferable to Ryu for geographic reasons. The way forward for the Blue Jays in that case was simple: add a year to the contract.

We don’t have tangible reporting that other offers that came to Ryu were of the two- or three-year variety, but prior to the 2019-20 off-season he wasn't expected to land a four-year deal:

The Blue Jays didn’t blow away predictions in terms on a per-year basis, they just tacked a year onto the type of deal Ryu may have expected to receive.

Although MLBTR and FanGraphs don’t have detailed predictions going all the way back to the 2014-15 off-season, we saw something similar with the Blue Jays’ biggest free agent signing of all time: Russell Martin.

During those negotiations, it was reported that the Chicago Cubs were favourites to sign him, thanks to a four-year offer worth $64 million. The Blue Jays snagged Martin away because they extended their offer out to five years at an almost-identical AAV. The catcher’s agent was asked what Martin would have done if the Cubs had responded in kind and told ESPN, “He never had to answer the question because of where [the money] went.”

The idea that you can land your targets by offering them longer contracts isn’t exactly revelatory, but it is particularly important for the Blue Jays for a couple of reasons.

Firstly, Toronto isn’t a destination that’s a net positive for all free agents. That has nothing to do with the quality of the city, which consistently ranks among the best in the world in a variety of respects. Although players tend to like Toronto once they come to visit, it’s still a foreign country for most and there can be pain points involved with moving — especially for players with families they want to bring with them. Considering a considerable percentage of American players come from Florida, Texas, and California, it also tends to be farther from home than most destinations.

There also isn’t a huge competitive draw – at least not yet. While the Blue Jays are an ascending franchise, at this moment they are more of a good team than a great one, so if a free agent’s primary goal is chasing a ring there may be better options out there.

Perhaps more important than any of that is the tax situation. The reality is that for extremely high earners like MLB baseball players, the tax burden is significantly lower in the United States, particularly in states with no income tax like Texas or Florida.

There are certainly times that Toronto's a preferred destination; Robbie Ray’s return on a one-year deal may have had something to do with the way he felt he clicked with the pitching coaches, for instance. There’s also a chance the presence of Ryu could help them with Korean players like Ha-Seong Kim. On balance, though, persuading free agents to sign with the Blue Jays can be a challenge.

All of that creates a situation where the Blue Jays aren’t winning too many ties when it comes to free agent bids. They need to have something to put them over the top, and winning the AAV battle is going to be extremely hard. They probably have to bid a little higher than their competitors considering the tax situation, and big spenders like the Dodgers and Yankees are willing to run higher payrolls on a year-to-year basis, so clearing them on annual salaries is a tall task.

Perhaps that’s something the Blue Jays can explore on short-term contracts while their young core remains cheap, but history tells us that big-name stars almost always prioritize length, regardless of the lip service Trevor Bauer once paid to signing exclusively one-year deals.

That means the best tool the Blue Jays have at their disposal to land their top targets is going to be tacking a year onto the kinds of offers they are seeing from other teams. In LeMahieu’s case, that means swooping in with a five-year offer. For George Springer, it might mean six.

Although they’ve been loath to give up future flexibility in the past, now they can afford to do so. The Blue Jays’ payroll obligations sit below $40 million in both 2022 and 2023, and there’s quite literally nothing on the books in 2024. While a willingness to take on more long-term risk than their competitors doesn’t fit with the common conception of this front office, it’s precisely what landed them Ryu — a move that looks like an excellent investment thus far. If they want to make a similar, or even larger, splash again this off-season, that’s the path they may need to explore again.

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