Qualifying offers are used as a tool to help MLB teams who lose star players to other teams in the form of amateur draft picks. While simple in principle, the qualifying offer is deeply flawed in its roots.
The qualifying offer (QO) has only been around for 8 years, as it was implemented during the 2012 Collective Bargaining Agreement (CBA) between the players association and the MLB.
The basic principles of the QO system is that once a player reaches free agency, the team can offer him a salary set by the MLB based on the average of the top 125 highest paid players during that season. This offer is then made to the free agent, and the player has 10 days to accept or decline the offer. A team does not have to offer the player a QO if they become free agents.
If the player accepts the offer, then he signs a 1 year contract with the team and can never be offered another QO again.
If the player rejects the offer and signs with another team, the original team receives a draft pick in return for losing the player, with the draft pick placement being determined by the contract worth the player signs and how many picks the signee team has in the Rule 4 draft.
Guessing Boras’ rationale will be that Keuchel will earn $13M for essentially a half season’s work, then go back on FA market without qualifying offer attached and get the deal he deserves. For that plan to work, Keuchel must excel - no easy task after an eight-month layoff.
— Ken Rosenthal (@Ken_Rosenthal) June 7, 2019
There is another scenario where a player rejects the QO and resigns with the original team, but we will touch more on that later.
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I’m not going to lie, it gets very complicated on what draft picks a team who loses the free agent will receive, so I have attached a link for more info.
On paper, the QO system does indeed work. The team who loses a high level free agent receives some compensation for losing said player while the team signing the free agent loses picks they probably do not need (because they signed the player). The risk/reward system if you will.
Some players even accept the QO, in order to secure a large payday and have another chance to prove they are worth a long term contract since you can only be offered a QO once in your career. This can be helpful to players who have a poor or injury plagued season right before hitting free agency.
There are problems with the system though, and this really can impact free agency and players trying to secure long term deals.
Just ask Craig Kimbrel, who had to wait more than over two months into the season before signing with a team because of the draft pick compensation.
For a player like Kimbrel, he is an elite closer with an impressive resume and should not have been on free agency for as long as he was.
While it is his right (and probably received some bad advice from his agent) to decline the QO, it is no secret that the QO system with the tied in draft pick compensation contributed to him not being signed for so long into the season. Once the draft is over, he is not attached to the draft pick compensation; hence why he signed the deal so quickly right after the amateur draft.
Now to sound like a hypocritical jerk, I also dislike how once the amateur draft is over, high level free agents can just walk away and sign deals with no compensation to the previous team.
So not only does the previous team receive zero compensation from losing a prominent player, they have to lose the original player, thus creating a hole in the everyday lineup/rotation.
I am a huge fan of baseball and I want to see the best players play. Having to see a top level talent like Kimbrel wait to sign is just a bad mark on a system that while on paper, cannot compare to what happens in real life.
The QO system can benefit players who are having a down year in their last year before free agency, but it can prohibit veteran type players from receiving long term deals.
A good example is Mike Moustakas, who after rejecting his QO, had to settle for a 1 year deal with the team who originally gave him the offer in Kansas City (and it was for 1/3 of the money).
The system just doesn’t benefit veteran players trying to seek a long term contract, and is forcing players to settle for these short term contracts when all they want is long term stability.
The current CBA is not set to expire until 2021, and I really hope that both sides visit the qualifying offer system and see if they can find a better way where both the player and the team receives benefits from the free agent market.