Earlier in the week, the St. Louis Post-Dispatch reported that Allen Craig was patiently awaiting the terms of a new contract for 2013. Apparently, the organization and third-year player couldn't come to an agreement, so, the two sides decided to commit for five years instead.
Long-term extensions for pre-arbitration players have become common place. However, those contracts have mostly been reserved for young superstars. Although Craig's offensive performance over the past season and half has certainly been impressive, at age-28, the first baseman/outfielder doesn't qualify under that banner. Nonetheless, the Cardinals decided to lock-up the slugger for five more years with an additional team option thrown in for good measure.
Although terms of the deal have not yet been announced, it's fair to assume the Cardinals will be taking on considerable risk because of the contract's length, not to mention the financial inducement likely need to convince Craig to forgo a chance at a bigger payday down the line. Still, unless the terms are outlandish, it's also likely that the potential reward more than justifies the long-term commitment. After all, players like Craig eventually get paid: first in arbitration and then via free agency. Chances are that if Craig continued to develop along the same path, he would have priced himself off the Cardinals and onto the open market just as he was hitting his prime. Now, if the slugger's emergence is sustainable, St. Louis will be able to reap the reward of its earlier patience at a fraction of the cost.
The Cardinals' decision to extend Craig has ramifications that extend throughout the game. If more teams follow suit by locking-up players at all levels of the talent spectrum, the result will be a much thinner crop of free agents. And, by extension, if the law of supply and demand prevails, elite free agents will get that much more expensive. Furthermore, usual consolation prizes like Craig will be older when they finally hit the market, so the risk associated with signing second-tier free agents is sure to increase as well. That's a bad formula for teams that operate on a budget.
For many teams, free agency has already stopped being a viable option. For others, it never was. Then, there are the big markets. Although the impact of a thinning free agent talent pool should trickle down to all teams, the ones most accustomed to spending their way out of trouble will really bear the brunt. So, unless these teams are willing to pay well in excess of likely value for premium free agents, they will have to increasingly look elsewhere for solutions.
If big market teams can't flex their financial muscles as easily, a greater onus will be placed on scouting...and not just at the amateur level. In addition to building a pipeline based on drafting and development, teams will also need to do a better job scouting their own players. After all, handing out long-term extensions works in theory, but only if the players selected perform up to expectations. Similarly, it will be even more important for clubs to identify possible trade targets on other teams as well as uncover a diamond or two from among the rough of journeyman minor leaguers and older veterans with something left in the tank. As free agency becomes increasingly adverse, these areas could become the new "market efficiencies".
Unfortunately for the Yankees, the team's experience this off season bears out the dynamics described above. And, if Hal Steinbrenner sticks to his budget, the Yankees are likely to face a similar winter freeze going forward. How can they compensate? Doing a better job drafting and developing young talent is paramount, but Brian Cashman may also have to start handing out long-term extensions to players already wearing pinstripes.
Regardless of how much money teams are willing to spend, free agency is no longer the cure-all it once was for some. Too many teams have money, and not enough talent is available. The days of the franchise-altering free agent aren't gone for good, but they are becoming fewer and far between. Teams simply can no longer rely on signing superstars to improve their outlook. Even players like Allen Craig may soon be off the table.