[dropcap]W[/dropcap]hen a Major League Baseball team loses one of its best player through free agency, they’re often left with nothing besides a few memories and a highlight or two. However, MLB and the Major League Baseball Player’s Association agreed a few years ago to implement a new system to ensure that wouldn’t always be the case. It was through this process that the qualifying offer was originated.
For simplicity, if you happen to have one of the top 25 players in all of baseball and they’re no longer under contract at the end of the season, you can offer them a predetermined salary for a one-year deal (last year the dollar amount was $14.1MM). The player can then either agree to the one-year offer, or elect free agency and sign with any team he chooses.
However, if he declines the offer, the team that signs him would be forced to give their first-round pick to his old team (certain picks are now protected, so a select few teams would only have to lose their second-round pick).
With the prices of free agents rising each season, teams don’t want to always sacrifice their potential top picks, who often come with a smaller price tag, not to mention many years of team control (this prohibits newly drafted players from becoming a free agent until a while after they’re drafted).
Although this hasn’t always caused problems for players or their respective clubs, declining the offer hasn’t always worked out as well as the player had hoped. In fact, Nelson Cruz declined his qualifying offer, and was only able to secure a deal with $8MM guaranteed, with a possible $750K more worth of incentives. It’s not to say that $8MM isn’t a lot of money, but it is a lot less than $14.1MM. So is the qualifying offer to blame for his potential $6MM loss?
Specifically for the case of Cruz, he’s considered by a lot of people in baseball to be a below-average defensive outfielder. This limits his options to mostly American League teams, because he can then be used as a DH, whereas he’d be forced to play the outfield if he were to sign with a National League team. Of course there’s also the fact he was suspended 50 games last year for his connection with the Biogenesis clinic. Add in the fact Cruz hasn’t been able to stay healthy an entire season except 2012, and maybe it’s not surprising that he wasn’t able to secure the type of deal he was hoping for.
It’s more surprising that Ervin Santana (starting pitcher who played for Kansas City Royals) and Stephen Drew (shortstop for the Boston Red Sox) still haven’t been able to reach a deal, despite the fact spring training started nearly two weeks ago. Is this a case of players overvaluing their abilities, or are owners and general managers not willing to pay for quality talent like they once had?
The qualifying offer system isn’t perfect and will most likely be looked at closely when MLB and the MLBPA have their next collective bargaining meetings, but the system isn’t completely flawed. Some free agents who declined their qualifying offer received some of the largest contracts in baseball history. Robinson Cano turned down the New York Yankees’ offer and instead signed a 10-year deal worth $240MM with the Seattle Mariners, and Jacoby Ellsbury left the Boston Red Sox to sign a seven-year deal with the New York Yankees for a guaranteed $153MM.
Will there be changes to the system in the near future? It’s hard to say, because the first thing you have to determine is who the current system is punishing the most. Most people won’t feel bad for someone who turns down making over $14MM, but most people don’t feel bad for their billionaire bosses who write their checks either. Unless something changes, free agents for the 2015 season might want to think twice before turning down any qualifying offers they might get.
