The gap is closing between the organizations that spend and those that don't. Sure, the inability to spend to retain their star players still separates the Rays and A's from the Red Sox and Dodgers, with a chasm among major league payrolls that forces the Rays to reload each year while the Dodgers sit on a surplus of expensive outfielders. Still, rules have changed on how organizations acquire talent, with spending restrictions on the draft and in the international market limiting the advantages that big spending teams have on the amateur landscape.
There are currently only two places where having a lot of money is still an advantage - Cuban defectors and Japanese veterans. It's no coincidence that the Dodgers have been among the most active teams on the former market while the Yankees have been aggressive on the latter. But there is one more avenue not currently restricted by Major League Baseball in which teams can use money to acquire talent - eating bad contracts.
Bad contracts, much like the players they are tied to, come in all different shapes, sizes, lengths and magnitudes. We tend to tie the value of a player to his contract, but in reality, there are players with bad contracts who still offer value. Matt Kemp, for example, still offers value as a player, but not enough for a team to take him off the Dodgers' hands without financial help. Other players, like Ryan Howard for example, have virtually no value, even if the Phillies were to eat his entire contract.
Many times, however, it's not the contract that is the complete problem so much as it is the fit with the player, and being willing to take on some of the salary of a departed player doesn't have to equate to admitting a mistake. For example, Jonathan Papelbon's contract gets viewed as a bad contract, but Papelbon has largely lived up to his end of the deal. The Phillies, however, have no use for an expensive closer as they wallow in last place. Papelbon has strong value on the trade market, but the extent of that value is controlled by the Phillies and just how much of his contract they are willing to pay.
In a weakened trade market with fewer options available, teams are looking at flawed players with bad contracts as a more viable trade option than they would be if there more complete players available. Of course, most teams don't want to take on these flawed players without financial help from the original owner.
These trades have two variables to them, working together like a see-saw trying to find a balance point somewhere in the center. On one hand, we have a team attempting to determine the proper value in terms of prospects to send back for a veteran player, something which can be a difficult task of its own. The prospect value then gets altered depending on just how much of the player's salary the new team will be taking on.
We saw a prime example of this in 2012 when the Marlins finally dealt their biggest star Hanley Ramirez to the Dodgers. Ramirez was signed through the end of this season, giving the Dodgers two-and-a-half years of control over Ramirez, who was in the midst of a second straight down season but was still an average offensive player with a track record that included a batting title and an MVP runner-up. It was generally accepted at the time that Ramirez just need a change of scenery. His trade value may not have been as high as it has been in, say, 2010, but it was still higher than the return the Marlins received for him.
Nothing against Nathan Eovaldi and Scott McGough, but that's not enough for two-and-a-half years of Hanley Ramirez. The Marlins refused to eat any of the $31.5 million remaining on the final two years of Ramirez's contract, and with no guarantee that he would return to all-star form, the Dodgers weren't about to take on a risky contract and empty out their farm system.
Ramirez was a risk but he was one worth taking. The Marlins, however, missed out on an opportunity. Perhaps the Dodgers, with more than enough money to spend, were not concerned with saving money and preferred not to part with prospects, but there's no doubting that the Marlins could have received more in return for Ramirez had they been willing to continue paying part of his salary. A team that is forced to be more financially responsible than the Dodgers (i.e. all of them) would likely have asked the Marlins to eat part of Ramirez's salary and would have been forced to give up more prospects. The Marlins aren't a rich team, but they missed out on an opportunity to spend some money and help re-stock their farm system, something which used to have to be done in the draft or internationally.
The Dodgers now find themselves on the other end of the spectrum. Kemp appears to want out of Los Angeles and is one of many fine examples on the current market where a team has a chance to both rid themselves of a bad contract situation and add talent. If Kemp ends up being the odd-man out in the Dodger outfield, the Dodgers will get something in return for him. It's a similar situation to the Ramirez trade two years ago with a former all-star player performing well below expectations and looking for a change of scenery while teams ask warily about his contract situation.
The Dodgers, along with a number of other teams, have a chance to add talent to their farm systems simply by spending money, something that is difficult to do these days. It's money they've already agreed to spend, but instead of the production of a player like Kemp, the Dodgers could add another top prospect to their farm system.
A team like the Mariners, for instance, who desperately need a right-handed bat, may be willing to take a chance on Kemp, but they're not likely to take a chance on the $107 million remaining on his contract. The Dodgers are resigned to the fact that they will have to eat part of it, but even if they eat roughly half, the Mariners would be taking a $50 million risk and a five year commitment. They're not going to be in a hurry to part with any significant prospects while jumping on that kind of risk. But if the Dodgers are willing to eat the majority of the contract, the Mariners may be more willing to part with a player like D.J. Peterson in return.
These are just hypothetical examples, but the theory remains sound. Teams attempting to rid themselves of bad contracts have a chance to get rid of the player but keep the salary commitment in exchange for talent. In some cases, the contracts were a mistake and the team wants to cut ties. Other times, however, the player and team simply no longer fit together and it's time to move on. These teams have an opportunity to use their finances to add to their organizational pool of talent. The draft no longer gives an advantage to wealthy teams, nor does the international free agent market.
But the trade market remains unregulated and it's the closest thing we have to the over-slot draft bonuses of old. The teams that are willing to pay now have an opportunity to reap the benefits later.