Easy as AAV: What the numbers ...

If you enjoy free-agent pyrotechnics, the 2022 MLB Winter Meetings had enough of them. Aside from Aaron Judge's record contract extension with the New York Yankees, the Philadelphia Phillies, San Diego Padres, New York Mets, and Texas Rangers all went all in to get the players they want. Some teams secured unexpectedly large contracts with pitchers who, significantly, pitch on a regular basis. Other competitors remained noticeably absent from the race.

So, what does this all mean? We've seen the most of the movement at the top end of the market, with 16 of the top 25 free agents according to FanGraphs' crowdsourced estimates signing. We can begin to unravel some of the ways front offices are functioning and seeing players in the first full summer under the new collective bargaining agreement.

Those huge superstar deals are small in one crucial way

Trea Turner, Xander Bogaerts, Brandon Nimmo, and Jacob deGrom's astounding top-line figures jolted the baseball world. However, a few days after the pinnacle of the signing rush, there are patterns in and reasons behind those transactions that indicate to something else than pure generosity. And they emphasize the significance of two acronyms you'll need to know if you want to comprehend MLB deals.

CBT: Competitive Balance Tax. This is a soft salary cap that charges team owners a surcharge for exceeding certain payroll thresholds each season. As negotiated in the collective-bargaining agreement that ended the pre-2022 lockout, the lowest 2023 bar is $233 million, and that number will rise incrementally through the life of the agreement, hitting $244 million in 2026. The surcharges rise for teams that exceed even higher thresholds (hello, Mets) and/or stay above the thresholds for multiple seasons in a row. Most team owners, unsurprisingly, make an effort to stay under the initial threshold or dip below it regularly to reset their tax charges.

AAV: Average Annual Value. A team’s CBT number is calculated, crucially, using the average annual value of each player’s contract, not necessarily what a player is actually paid that season.

The initial takeaway from the rush of deals, dollar figures bursting at us like popcorn, was something to the effect of, “Whoa, that’s a lot of cash.” But using the median values from FanGraphs’ crowdsourced contract projections, you'll see a stark difference in astronomical total values and the AAVs that go toward CBT numbers.

Remember when teams deferred money to lower the actual value of a deal but still help players set salary records? This is a little like that, but with an eye toward CBT surcharges. You can look at what the Phillies and Padres did as taking out loans on immediate, impactful help, with fixed, advantageous interest payments slated to come due in the early 2030s.

It’s a great time to be a reliable midrotation starter

If the superstar contracts are a compromise, there is one set of players whose contracts are not. Teams have a lock on midrotation starters who consume innings. Taijuan Walker of the Philadelphia Phillies and Jameson Taillon of the Chicago Cubs both received four-year contracts that exceeded their estimated contract totals by more than 80% (!) and their projected AAVs by nearly 40%.

FanGraphs contract voters are now well-informed observers, but this is where the industry makes its moves. Whether it's the coming impacts of the pitch clock or the ongoing consequences of MLB restrictions on how many pitchers each team can carry, these No. 3-type starters are profiting on clubs' fear of not being able to regularly fill up a rotation.

How will this play out for Carlos Correa, Carlos Rodon and Dansby Swanson?

The top stars still on the market – spoiler warning — will make more than we anticipated heading into the offseason. Carlos Correa, the youngest of this year's top free agents and maybe the hitter with the biggest upside outside of Judge, must now be entertaining offers in excess of $300 million. His FanGraphs median forecast included eight years and $256 million.

Swanson, who is a step below Correa, Turner, and Bogaerts but still a winning shortstop, could plausibly ask for a Nimmo-style deal that covers seven or eight years and exceeds $150 million, exceeding a FanGraphs prediction of $141 million.