John Hickey writes on the Mariners needs and shows the problem with signing too many free agents:

Seattle has had three consecutive last-place finishes, and if things are going to change, general manager Bill Bavasi and his crew see the need for an influx of starting pitching. Whether by trade, by free agent signings or by posting (in the case of Japanese star Daisuke Matsuzaka), the Mariners need to add a minimum of two, and maybe three, starting pitchers.

The reason they need to go that route?

Don't look for the Mariners (or many other teams) to move quickly in free agency. If a club waits until the first week of December, after clubs have offered their own free agents salary arbitration, the signing club can get the player without giving up a draft pick.

With the Mariners having had paltry drafts since the 2000 season in part because of numerous free-agent signings, Seattle management is particularly cognizant of the importance of not losing high picks in the June draft of high school and college players.

It's a vicious cycle. Teams sign top free agents, lose draft picks, and when those free agents age or don't work out, there's no one in the minors to trade or promote. So the team ends up signing more free agents, and fall further behind in the minors. Sometimes a team needs to step back and take a few losing seasons to rebuild the minors.