Rethinking MLB's qualifying offer system

Robert Deutsch-USA TODAY

It's March and free agents attached to draft pick compensation, Stephen Drew, Kendrys Morales and Ervin Santana are still looking for jobs. Is the qualifying offer system unfair to players?

It's hard to feel bad for someone who turned down $14.1 million. That's more money than most of us see in our entire lives. But this past November, thirteen major league free agents declined the opportunity to make that much in a single season when they rejected qualifying offers made by their 2013 clubs. The offers - an average of the top 125 player salaries earned last season - were handed out in accordance with MLB's now two-year-old system that requires teams to pony up that set figure in order to claim draft pick compensation for their departing free agents.

Sympathy is tough to muster for Nelson Cruz, who eventually agreed to a one-year, $8 million deal, a sum significantly less than what he could have had from Texas had he accepted his qualifying offer, or for Stephen Drew, Kendrys Morales and Ervin Santana, who are still languishing in no man's land two weeks into spring training. But just because the general public can't relate to problems like these doesn't mean they aren't problems. The bottom line is that all of these guys, thanks to a fairly new-found value placed on the young, cost-controlled players available in the amateur draft, got majorly screwed.

Drew, Morales and Santana have watched some comparable free agents not saddled with draft pick compensation sign some pretty lucrative deals. The Tigers played it conservative and didn't make qualifying offers to free agent infielders Jhonny Peralta and Omar Infante, and both were able to score four-year pacts in the state of Missouri, Peralta's worth a surprising $53 million, even coming off a PED suspension. Neither Ricky Nolasco nor Matt Garza out-pitched Santana last year but both got four-year guarantees as well, each in the $50 million range.

The qualifying offer system was supposed to resolve this issue. Under the old rules, which were intact until 2011, notable players heading into free agency received "A" or "B" status from the Elias Sports Bureau, with only "A's" requiring the signing team to surrender its first round pick. Instead of a qualifying offer, teams only had to offer arbitration. Requiring a minimum offer at a mid-level salary was intended to make teams think twice about tagging their players with a draft pick price tag...but it hasn't. Over the past two years, twenty-one qualifying offers have been made and all of them have been turned down. As that trend continues, teams will only get bolder in which players they make the offers to, and free agents will keep getting judged on factors other than their on-field prowess. Whether you're a fan of how much professional athletes earn or not, that's simply not fair.

Should you really get a draft pick for not signing a player?

The idea of draft pick compensation for departing players is a long-held tradition in baseball, and the logic is obvious. More often than not, teams losing free agents have been of the small market variety, and extra draft picks are a way to help keep them competitive with the big-town monsters who are always stealing their players. But the qualifying offer system seems to favor those big markets, who are more equipped to take the financial risk of issuing a fairly expensive qualifying offer. Of the twenty-one offers made in 2012 and 2013, eleven were handed out by the Yankees, Red Sox and Rangers. In several cases, draft pick compensation wasn't exactly easing the burden of a loss. The Yankees had no intention of bringing back Rafael Soriano last off-season, or Curtis Granderson this time around, but they got their picks nonetheless.

Another issue is that pick compensation encourages teams to go on major spending sprees, signing multiple top free agents in a single off-season. In the winter of 2008-09, the Yankees signed the best hitter and the two best pitchers on the market and only ceded a second and a third round pick for the former two. Since they've already signed Jacoby Ellsbury, Brian McCann and Carlos Beltran this year, their cost, if they chose to sign Drew or one of the other qualifying offer free agents still available, would be less than for most other teams in baseball.

So what can be done? MLB has already installed a rule where impending free agents acquired during a season can't receive qualifying offers that winter, but that's not enough. They should extend that restriction to include off-season deals and deadline deals the year before so that a player would need to play for a given team for two full seasons before being eligible for draft pick compensation. Another idea would be to take high-payroll teams out of the equation entirely, since their getting extra draft picks sort of defeats the purpose of the whole exercise.

Install a tiered system for draft pick compensation

A major issue with the current qualifying offer system is that, as we've seen over the past two years, one year at the average of the top 125 salaries in baseball is not enticing enough to get well...anyone to stick around, especially when they have just a few days to make a decision. Free agency, at least prime years free agency, is a once-in-a-career opportunity for many players, and they aren't going into it looking for a one-year deal.

So why not have different levels of qualifying offers for different levels of free agents? Guys like Drew and Morales probably shouldn't be grouped in with Robinson Cano, after-all. Under a system like this, in order to get a first round pick, you'd need to offer three years at an average salary of what the top 25 players in baseball made the year before. This year that would have been a three-year deal worth $63.8 million, which would limit giving up a first round pick to the very top category of free agents - probably only Cano and Ellsbury would have gotten that. Going down the line, a two-year offer at an average of the top 75 would net you a second round pick and the one-year, top 125 offer we know now would earn you an extra selection after the third round.

Change which picks are protected

Under the current system, if a team has a top-ten pick in the draft, they surrender a second rounder instead of a first for signing a qualifying offer free agent. That's well and good for those teams, but the eleventh pick in the draft is still pretty valuable and the eleventh-worst team in baseball is still pretty bad. This is another way in which the system favors stronger organizations. The cost of signing a top free agent for the best team in baseball is significantly less than it is for a 75-win type club. Extending protected picks from the top ten to the top 20 would help.

At least prevent players from getting qualifying offers two years in a row

One of many reasons that free agents are reluctant to accept qualifying offers from their teams is the likelihood that if they do, they'll end up in the same boat a year later. Barring players who agree to the qualifying offer from getting one again would raise the risk level for teams, at least a little. The goal should be to stop clubs from sweeping up draft picks for doing and losing nothing.

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