The Yankees enter this offseason with numerous roster decisions to make. One of the first ones that will take place in the days following the World Series is what pending free agents they will extend the qualifying offer to. This year the Yankees will have to make this choice on DJ LeMahieu, Masahiro Tanaka and James Paxton.
The Major League Baseball qualifying offer can be extended to a player one time in his career when they are entering free agency. The offer represents a one-year contract to return to their team for an amount that is the average of the top-125 salaries in the sport. This offseason, the qualifying offer rises $1.1 million to $18.9 million for the 2021 season. Once a team places the qualifying offer on a player, the team become entitled to draft pick compensation if the player declines the offer and then signs with another team.
The Yankees used draft pick compensation from Nick Swisher signing with the Cleveland Indians to draft Aaron Judge in 2013. The Yankees have also forfeited their second and fifth round draft picks in the most recent draft for signing Gerrit Cole after he declined a qualifying offer from the Houston Astros.
Of the Yankees heading to free agency, DJ LeMahieu is the most certain candidate to receive a qualifying offer. Since joining the Yankees on a two-year deal, LeMahieu has slashed .336/.386/.536. He is likely to enter free agency coming off two consecutive top-5 American League MVP finishes and is a key piece that the Yankees should be looking to retain.
The Yankees will offer LeMahieu the qualifying offer, and he will turn it down in search of a multi-year deal. Declining the offer will not keeps the Yankees from negotiating with LeMahieu, but it will also put an extra cost on any other team that pursues the reigning American League batting champ.
The next player that the Yankees will likely off a qualifying offer to is Masahiro Tanaka. Originally signed out of Japan on a seven-year, $155-million deal prior to the 2014 season, Tanaka has provided the Yankees with 17.5 WAR during the course of this contract. He finished 2020 with a 3.56 ERA, and was a steady rotation piece for the Yankees this season.
Prior to 2020 he had been an incredibly reliable postseason pitcher, always rising to the occasion in October. Heading into his first real free agency, Tanaka is likely to garner multi-year deals from several teams. There has even been a report that Tanaka’s former team in Japan is preparing up to make a competitive offer. It is unlikely that Tanaka would accept a one-year qualifying offer, but the Yankees should extend it to him.
The third Yankee who will be considered for a qualifying offer is James Paxton. Paxton has shown stretches where he is a top of the rotation starter dating back to his time in Seattle. This included down the stretch in 2019 and a big game five outing against Houston in the American League Championship Series.
This season, Paxton went down with a back injury during spring training and was never able to get on track. His fastball velocity dropped to just 92.1 mph after averaging over 95 mph from 2016-2019. He was diagnosed with a flexor strain in late August and did not appear in another game for the Yankees.
Just this week, his agent Scott Boras went public to state that Paxton is healthy again and should be able to maintain a regular throwing program heading into 2021. The Yankees will have as much medical information as anyone on Paxton, and this will influence their decision. Should the Yankees have any questions about Paxton’s health then it is unlikely that will extend an qualifying offer.
If Paxton is indeed healthy, then he could be worth extending a qualifying offer to. Coming off an injury shortened season with diminished velocity, he could look to rebuild his value while collecting a quality salary, but that is not his agent’s usual course of action. The risk will come if Paxton truly is not healthy and accepts the Yankees offer. The Yankees would be in a tough spot if they land Paxton for $18.9 million and then he misses most of the season.
The Yankees will likely be offering several qualifying offers this offseason, and in almost every case they will be rejected. Making the offer puts the Yankees in line to retain their players, or receive draft pick compensation from another team. In recent years several players have seen their free agent value crushed by the draft pick compensation that was tied to their free agency. The coming offseason will be very unpredictable as the Yankees and other teams deal with the financial ramifications of playing a shortened season with no fans in the stands. The organization can look to put themselves in the best position to negotiate with their top free agents.