MLB: A Suggestion to Fix the Qualifying Offer System

According to recent reports, the MLB qualifying offer that can be extended to impending free agents will spike a bit this coming winter. But will this really change the league’s unfair system?

The qualifying offer has been a subject of discussion for many years now. What the offer basically does is allow clubs to receive high draft picks for the impact players they lose on the free agent market. If a team gives a qualifying offer to an impending free agent, the player can accept or decline it. If they decline the offer, which has been the norm until recently, then the player can sign with any club they choose.

If the team is not in the top ten of draft selections for that June, then the new club must forfeit a first round draft pick and the team losing the free agent gets a supplemental slot directly after the conclusion of round one. If the player accepts the qualifying offer, then they are simply signed to the contract value for that one full year. The value is determined based on what the average of the highest mean salaries are in MLB.

This sounds reasonable enough, with there being no salary cap and a clear disparity in revenue throughout the league. However, it has become a much more complex game for both the teams and the players than it was originally intended to be. Players have been the most affected by the current system.

Many elite talents who should be getting multi-year deals have been declining the offer and not getting their fair market value because teams don’t want to surrender their first round spot. This forced the hands of the agents as they have begun to accept the qualifying offer in hopes that it will threaten teams to not use it just to get draft pick compensation. Matt Wieters, Colby Rasmus and Brett Anderson were the first three to ever accept a qualifying offer, and all did it in 2015.

The value of the qualifying offer is fairly substantial and is continuing to grow. According to Buster Olney, the offer will most likely increase from $15.8 million last season to $16.7 million for this upcoming MLB offseason. This jives with the recent trends of the salary number of the offer. It has been on a steady increase from 2013, when the offer was just $13.3 million. This represents a win for the players as their salaries have been on the uptick, which has helped increased the value of this qualifying offer system. But major ramifications must still be made during the collective bargaining negotiations if MLB is to be fair to its players.

The main flaw with this system is that it drastically diminishes the amount of money a player can earn on the open market simply because they have something attached to them that makes it less appealing to acquire their services. This mostly affects what we call the “middle-tier” group of free agents. The truly elite players’ markets are not greatly changed because even with clubs surrendering draft picks to sign them, their impact is so great that it doesn’t matter.

Less-regarded free agents are better off as well because teams are wary that they might accept the deal and the club will have wasted some of their budget on a middling talent. Therefore, role players do better on the market than more impactful players because they don’t come with the caveat of losing a first round selection. This puts a major burden on everyone involved. MLB needs a system where clubs can get value for the major free agents they lose, but at the same time not diminishing the value of established veterans on the open market. But what system will allow such a thing?

There could be many ways of solving this problem, but one intriguing proposition would be to make qualifying offers a three-year commitment at a little less of a price then the current qualifying offer, instead of it being for just one year. This solution would put all parties of the MLB offseason in a better position.

First and foremost, this suggestion fixes the players’ lack of long-term stability. The current system gives the players great reason to decline their offer because  it is in their best interest to see what another team will give them, but if the qualifying offer would be for three years it makes it much more appealing to impending free agents.

So if a club is just looking draft pick compensation instead of really believing in a player’s abilities, they may have to think twice about offering the contract because it forces much more commitment, which means only players teams want to commit themselves to will get the offer. On the flip side, the most sought-after free agents will still probably decline the offer because they will be able to get more years and money when free agency opens.

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However, even though it may seem like the teams are getting slighted in this new system, there is still some benefit for them. The biggest conundrum that front offices have with the current way MLB has the qualifying offer set up is that it is difficult to choose who they should and shouldn’t extend the offer to. The Dodgers would be extremely happy right now if they weren’t committing so much money to Brett Anderson because the team would have never given him three years at close to that dollar figure. This new system allows teams to more easily make their decisions and get fair value for their truly impactful players that are changing scenery.

A concession that MLBPA may be expected to make is having to decrease the value of the qualifying offer because of the inclusion of extra years of commitment. Instead of the offer being the average value of the top 125 contracts, it could be 175, which probably makes the amount at least a $1 million less. Owners and decision makers will appreciate that they will not have to shell out as much money if a player were to accept their qualifying offer.

MLB has been negatively affected all around by the way they are currently handling free agency. This solution would give players more power to make the most money that they can, and will give teams a clearer choice of what players they give the qualifying offer to, along with the fact that they will get draft pick compensation for players that truly hurt the franchise by leaving. There are many plausible solutions to this hot button baseball topic, and while this new plan may not be perfect, there is a clear need for change that must be made to the qualifying offer system in the new MLB collective bargaining agreement.

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What are your thoughts on the current qualifying offer system? What changes would you suggest? Share your thoughts in the comment section below.