Previewing the Yankees’ qualifying offer decisions

The Yankees’ season ended weeks ago, but their first set of offseason decisions is set to come tomorrow. November 10th is the deadline for teams to tender qualifying offers to their free agents. With 10 players hitting free agency, this stands as an important day for the Yankees, as how their particular QO scenarios work out will hold some influence over the shape of their offseason.

Before getting into the specifics of the Yankees’ situation, it’s worth reviewing the state of the qualifying offer. The system remains pretty convoluted. Free agents that spent the entirety of the preceding season with one team and that have not received a QO before are eligible. The QO represents a one-year deal at the average of the top 125 salaries in the league, which this year comes in at $19.65MM. Teams that lose a free agent that they tendered a QO to receive draft pick compensation, though what level of pick is determined by that team’s revenue-sharing and luxury-tax status. Likewise, teams that sign players with a QO attached to them forfeit draft picks, with their revenue-sharing and luxury-tax positions again determining which picks they lose.

The Yankees obviously do not receive revenue sharing, and were in the luxury tax for the 2022 season. That combination means they would receive a compensation pick after the fourth round should one of their QO free agents walks. It also means they would face the max penalty for signing a free agent attached to a QO, the loss of their second- and fifth-highest draft picks and $1 million in international bonus pool money.

(If this all seems like an oddly cumbersome and opaque way to modestly suppress the salaries of free agent players, well, it is!)

The Yankees initially had nine players hitting free agency, and had one more join in when Anthony Rizzo declined his $16MM player option for 2023. Six of them (Zack Britton, Chad Green, Aroldis Chapman, Matt Carpenter, Miguel Castro, and Marwin Gonzalez) will definitely not be receiving a qualifying offer. Andrew Benintendi would have been a reasonable candidate, but is ineligible having been acquired via trade midseason.

That leaves a trio of Yankee free agents. Aaron Judge is a lock to receive and decline the qualifying offer, meaning Yankees fans can rejoice knowing that a sweet fourth-round pick will be coming their way if New York fails to re-sign the face of the franchise. Rizzo and right-hander Jameson Taillon stick out as the edge cases.

Rizzo seems like a simpler call. The $19.65MM qualifying offer would represent only a small raise on his 2022 salary. The 32-year-old was the Yankees’ second-best hitter for the balance of the season, his best since 2019. FanGraphs’ crowdsourcing pegs Rizzo for a $51MM, three-year deal, while most analysts view Rizzo as capable of securing at least a two-year pact. Extending the QO to Rizzo and seeing him decline it feels like the right — and already rumored — outcome here.

Taillon is a little more complicated. The right-hander was merely average in 2022; in fact, he posted a precisely average 100 ERA+ in both of his seasons as a Yankee. Average players entering their age-31 seasons typically don’t net $20MM salaries.

Yet Taillon is a durable, fairly dependable veteran pitcher, even if he’s one lacking in huge upside. That archetype of player has generally been able to fetch three-to-four-year deals, even as teams have grown more and more wary about handing out larger guarantees to players in their 30’s. For example, just last winter, Jon Gray secured $56MM over four years, entering free agency with a 104 ERA+ over his previous four years. Anthony DeSclafani got three years, $36MM, with a career 104 ERA+ to his name.

Taillon would have an interesting choice if the Yankees tendered him the qualifying offer. He’s unlikely to match the QO’s AAV over the course of a longer-term deal, but hitting free agency could allow him to secure a larger overall guarantee over the course of two-to-four years.

On the other hand, we’ve seen edge cases like Taillon get screwed over by having the QO millstone hanging around their neck. The penalties for signing a QO free agent are less stringent than in the past, but just a few years ago, bigger-name pitchers like Craig Kimbrel and Dallas Keuchel were forced to wait until after the next season’s MLB Draft, only signing once draft-pick penalties were extinguished, and even then at seemingly depressed salaries. Would Taillon meet a similar fate, with teams unwilling to forfeit draft picks to sign an okay pitcher? Would he rather secure a high 2023 salary, then hit the market again next year without the QO dragging him down?

And how would the Yankees react if they tendered Taillon the QO, and he accepted? Such a scenario would likely have small ripple effects on the rest of their winter. Their rotation would suddenly be nearly set, with Gerrit Cole, Luis Severino, Nestor Cortes, Taillon, and Frankie Montas likely written in pen, or at least pencil. Their pitching depth would also appear solid, with major-league caliber arms like Clarke Schmidt, Domingo Germán, and a recovering Mike King all in line to step in should the need arise.

Setting aside whether Taillon would represent strong “value” on the qualifying offer, such a scenario would at least clarify the Yankees’ offseason goals. With their pitching depth in a good spot, it would be abundantly clear that re-signing Judge, and overall upgrading an offense that was top-heavy in 2022, should be the top priorities. It of course remains to be seen if Hal Steinbrenner has it in him to spend the money required to run it back with Judge, Taillon, and perhaps Rizzo, all the while upgrading on the likes of Josh Donaldson or Isiah-Kiner Falefa.

It will be a while until we get answers to most of our offseason questions, but things are about to start moving. Hopefully, a Yankee winter that entails retaining their key 2022 contributors and adding external talents starts tomorrow.