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Saturday, April 12, 2014

Fixing MLB’s qualifying offer system - ESPN

The best way to cut down on the number of players getting qualifying offers is, players need to not overestimate their market and accept the offer.

Jim Furtado Posted: April 12, 2014 at 08:14 AM | 48 comment(s) Login to Bookmark
  Tags: free agency, free agent compensation

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   1. Arbitol Dijaler Posted: April 12, 2014 at 08:40 AM (#4684973)
I don't know. The wisdom of the crowds here is very frequently wrong by a wide margin.
   2. Best Regards, President of Comfort, Esq. Posted: April 12, 2014 at 09:28 AM (#4684983)
I disagree, Jim. Teams are offering the qualifying offers because they think the player's worth that *for one year*. But if the player is a mid-level free agent who just had their best year, they normally can leverage that into a multi-year deal that would give them less in that first year, but more over the entirety of the contract (as well as providing a measure of security). If players all accepted the qualifying offers, the teams would come out ahead, because they'd be getting one-year deals at what they usually would consider to be a fair price, and usually a bargain. With no commitment beyond the one year -- and if the guy was good, they can just offer another qualifying offer.

The solution is simple: don't have a deadline to accept the qualifying offer. It remains on the table until the draft, unless withdrawn by the team. If the team withdraws the offer, then the draft pick compensation goes away, too. So if Drew can't find a contract out there because nobody wants to forfeit a draft pick and give one to Boston, then Drew can just accept the qualifying offer (which certainly would have been withdrawn at this point anyway).
   3. Pops Freshenmeyer Posted: April 12, 2014 at 09:39 AM (#4684984)
The solution is simple: don't have a deadline to accept the qualifying offer. It remains on the table until the draft, unless withdrawn by the team. If the team withdraws the offer, then the draft pick compensation goes away, too. So if Drew can't find a contract out there because nobody wants to forfeit a draft pick and give one to Boston, then Drew can just accept the qualifying offer (which certainly would have been withdrawn at this point anyway).

I think this is a perfect solution.

The issue keeping Drew and Morales unemployed isn't because they're worth less than the QO, it's because they misjudged the value of the draft pick compensation.
   4. Bug Selig Posted: April 12, 2014 at 10:09 AM (#4684993)
I don't know. The wisdom of the crowds here is very frequently wrong by a wide margin.


Says the first post.

And that's all it says.
   5. Rennie's Tenet Posted: April 12, 2014 at 10:21 AM (#4684999)
In the full article, Kyle Lohse says he took ten years to get to free agency. Is that possible?

Can these guys re-sign with their former teams and then be traded, or is that forbidden?
   6. Best Regards, President of Comfort, Esq. Posted: April 12, 2014 at 10:31 AM (#4685003)
Lohse is counting minor leagues, which he absolutely should.

If he had never been promoted to the majors, he would have been a free agent sooner than he was.
   7. Greg Pope thinks the Cubs are reeking havoc Posted: April 12, 2014 at 10:52 AM (#4685008)
I forget, is there a rule about teams trading for players and then offering a QO? My biggest problem with the old system was that the Team Large Market could trade for a stud player in their last year of the contract and then get a draft pick when they signed elsewhere. I thought that was eliminated, but that may have been when the rule was still arbitration.
   8. JRVJ Posted: April 12, 2014 at 11:06 AM (#4685013)
If I'm reading Lohse's Baseball Reference page correctly, he'd made $56MM by the time he became a FA with the Cardinals (and that's without counting things like endorsements and WS bonus money).

I understand the concept of "stability" if what you mean is that you want to stay in one specific place with your family. But if that's what Lohse wants to do, then Lohse should sign for whatever that team (or group of teams, if it's an area with multiple teams) is willing to pay.


If "stability" means a combination of a lot of money and a place that you like to be in, that's fine, but you can't have your cake and eat it too in life.

Cry me a river in Lohse's case.
   9. Golfing Great Mitch Cumstein Posted: April 12, 2014 at 11:41 AM (#4685019)
I forget, is there a rule about teams trading for players and then offering a QO? My biggest problem with the old system was that the Team Large Market could trade for a stud player in their last year of the contract and then get a draft pick when they signed elsewhere. I thought that was eliminated, but that may have been when the rule was still arbitration.


Read TFA.
   10. Tricky Dick Posted: April 12, 2014 at 11:44 AM (#4685021)
In a period of rising free agent salaries, it might make sense to increase the dollar value of qualifying offers. Perhaps the next collective bargaining agreement should reduce the benchmark for the qualifying offer salary from the top 125 players to the top 80 players, as an example. (Maybe the number should be top 50 or top 100---I don't know how steep the salary distribution is at the top.) This would likely reduce the number of qualifying offers and also make the qualifying offers more attractive.
   11. Jim Wisinski Posted: April 12, 2014 at 11:52 AM (#4685025)
If some team out there actually thought giving Drew 5/$75 or Morales whatever he was asking for (I think it was 4 years, don't remember the dollar amount) was a good idea then they would have been signed long ago with or without draft pick compensation.
   12. Pops Freshenmeyer Posted: April 12, 2014 at 11:56 AM (#4685026)
The article makes the following prediction:

Fewer qualifying offers next winter -- Clubs are already getting the vibe from some agents that player/agent strategy is about to change -- and players will be far more open to taking qualifying offers next winter. How that plays out, on both sides, over the next two winters, will have a major impact on the 2016 labor talks.


I think this is absurd.

Which of these 2014 FAs wouldn't be worth the one year deal?

Carlos Beltran
Robinson Cano
Shin-Soo Choo
Nelson Cruz
Stephen Drew
Jacoby Ellsbury
Curtis Granderson
Ubaldo Jimenez
Hiroki Kuroda
Brian McCann
Kendrys Morales
Mike Napoli
Ervin Santana
   13. Joyful Calculus Instructor Posted: April 12, 2014 at 12:24 PM (#4685032)
Looking at the case of Lohse, by accepting qualifying offers, he'd be at two years and $27.4m right now. Unless he completely falls off a cliff or has a career threatening injury, he'd get more than $5.6m next year (likely another qualifying offer worth close to $15m).

It seems like teams value the draft picks at around $6m or so just by looking at what players have gotten (feel free to point me to research on this if somebody has made a scientific estimate). The middle tier free agents would be well off to take the qualifying offers each year, which would give them similar money to if they were taking one year deals in a completely free market (and really, to maximize money players would take one year deals every year unless on the verge of injury or steep decline or getting an absurd offer despite never having been that good [Vernon Wells]). Elite free agents should take long term deals under the current system, as the QO would hit their value every time they're a free agent.

The guys hurt most would be the guys who would normally be offered a few million more dollars than the QO who would have the salary either dropped down to the QO or take a multiyear deal with similar average to the QO rather than a bit more. Guys like Lohse and Drew aren't really hurt by the system if they keep taking the QOs as long as they remain healthy, but do lose the protection against injury and decline.
   14. Steve Balboni's Personal Trainer Posted: April 12, 2014 at 03:11 PM (#4685094)
Perhaps I am in the minority on this one, but I generally agree with the premise that the market is going to take care of this problem pretty quickly. Consider:

- While this has not worked out very well for Drew or Morales, it is...two guys out of a much larger pool of players. Most players not under contract for 2014 had no problems with this system, and of the handful of players who did receive qualifying offers, most of them had no problems with the system, either. Should we really be worrying a whole lot about a policy where over 99% of people have experienced no problems within that system?

- Maybe these two players should have taken the one-year offer. Consider that accepting the offer only gives you one guaranteed year of salary...but that salary is the average of the 125 highest-paid players in baseball. I presume that the distribution of those 125 salaries is not a straight line - it is probably more of a parabola, where the top 10 or so salaries are driving the average north of what the, say, 65th-highest-paid player is making. The 50th-highest paid player in baseball this year is making $15.2 million. Do any of you think that Stephen Drew should be about the 50th-highest paid player in baseball? Kendry Morales? Really? The market is speaking, already; just because they don't like what it is saying doesn't mean the market is wrong.

- You cannot have a policy where the player who received the offer has a significantly longer period of time in which to accept the offer. The teams need to know if the player is going to take it or not soon enough to make personnel decisions. Should the teams have several months to decide whether to make the offer? Of course not - imagine what that would do to other teams considering signing a free agent, if they could find out later that the player could back out of the deal he just signed, or have a draft pick taken away retroactively. That would be ridiculous. Likewise, should the Red Sox have to wonder all winter whether or not Drew might take the deal half way through Spring Training? Of course not. You want to extend by another week or something? I guess it can't hurt...but it also won't change things a whole lot. Let's face it: Scott Boras was not going to tell his clients to accept those qualifying offer under any circumstances. Giving then an extra few weeks wouldn't change that at all.

I don't think you change the system because one or two players a year get hung up, in a sport that will have over 1,000 players see big league action during the 2014 season.
   15. cardsfanboy Posted: April 12, 2014 at 03:38 PM (#4685099)
I hated this system when it was approved, and it's playing out even worse than I thought it would. The new system is unfair to free agents, it's also unfair to lower market clubs. But just focusing on this one problem, the post in 2 offers a good solution that is much more fair to all parties involved. At least they should make it so that if you sign after opening day, the signing team doesn't lose the free agent.

two guys out of a much larger pool of players.


Not really "much" larger pool 13 players were offered qualifying offers and 2 didn't get a contract and Ervin Santana didn't get one until spring training had already started.

The previous season 9 names were offered qualifying offers and as the Lohse case points out, it wasn't a smooth system for even those who did eventually sign.
   16. Zach Posted: April 12, 2014 at 05:00 PM (#4685121)
I'm torn.

On the one hand, the best evidence that a market is designed poorly is that it fails to clear -- there are at least a few valuable players, who could play useful roles on contending teams, who are not getting signed under this system. And if I were in the position of these players, I would certainly see the value of a multi-year contract as compared to a one year deal.

On the other hand, you can also make the case that the market is failing to clear because one or both sides are behaving irrationally. I think the big revelation of this offseason is that teams are valuing draft picks extremely highly (arguably too highly). Instead of a slap on the wrist, the loss of a draft pick is being seen as a deal blocker.

The idea that a team has to keep the offer open indefinitely to receive a draft pick seems unworkable to me. I don't think it's possible to run a team if you don't know your salary commitments to the tune of $15 million. If you want to reform the system, I'd suggest raising the threshold for a qualifying offer.
   17. Zach Posted: April 12, 2014 at 05:08 PM (#4685124)
The other irrational behavior that we're seeing is that teams are overvaluing draft picks. The simple truth of the matter is that a qualifying free agent is going to help a team more, faster, and with less risk than any draft pick. Going without Stephen Drew, for example, in order to save a draft pick that might turn into a player as good as Stephen Drew in five to seven years, is just stupid.
   18. Greg Pope thinks the Cubs are reeking havoc Posted: April 12, 2014 at 05:20 PM (#4685125)
What 14 and 16 are missing is that Larry said that the teams can withdraw the offer. So the team isn't on the hook for anything if they don't want to. If the Sox extend the offer to Drew, they can still go about their plans. If they sign a SS, or if they spend their money elsewhere, they just retract the offer and forego the chance to get the pick.

I'm not sure it's completely fair to either tem or player, but it would be better than what's going on now.
   19. cardsfanboy Posted: April 12, 2014 at 05:27 PM (#4685126)
The ability to rescind the offer is a big part of it's advantage in the proposed system. At the very least there should be a window where the player is allowed to negotiate with other teams, but still retain the ability to take the qualifying offer. I know it goes against the blind auction concept that they were shooting for with this, but fairness is better than gamesmanship.
   20. Walt Davis Posted: April 12, 2014 at 05:42 PM (#4685129)
Not really "much" larger pool 13 players were offered qualifying offers and 2 didn't get a contract and Ervin Santana didn't get one until spring training had already started.

Cruz also signed late and for less than the QO.

The point about the market not clearing is interesting but, as with everything in the MLB labor market, this operates nothing like a regular market. The market would have "cleared" if Drew, etc. had accepted their QOs which is not typical of other markets (although probably not strictly unheard of). In other markets, there's not a "penalty" assessed to a company that hires a new employee nor a "reward" to the company losing the employee.

But, yes, on day one I thought there were 2 players who should definitely accept the QO -- Cruz and Morales. Both are best suited to DH and even Ortiz struggles to get more than 1/$13 as a DH. A contract similar to Adam LaRoche wasn't completely out of the question but was more of a best-case scenario.
   21. boteman Posted: April 12, 2014 at 05:54 PM (#4685131)
fairness is better than gamesmanship.

Tell that to the current replay review system.
   22. Rennie's Tenet Posted: April 12, 2014 at 05:55 PM (#4685132)
I don't keep up on the CBA stuff as much as most around here, but after looking over this article a bit I'm amazed that Drew, Morales, and Lohse are all Boras clients but that's not the focus of the article.
   23. Walt Davis Posted: April 12, 2014 at 06:02 PM (#4685135)
I like the idea of the QO remaining in effect until the team rescinds it but if that's not gonna fly with the teams, another alternative is to add the rule that a player can't be subject to a QO in consecutive seasons.

On Drew et al's ranking -- remember, it's not whether he's the 50th best (or whatever) player, it's whether he's the 50th best FA-eligible player. The top 125 are going to almost all be such players as young stars are badly underpaid relative to value. (Exceptions obviously for guys like Trout who will crack the top 125 in a year or two.)

Among position players in their 8th season or later, Drew was 32nd in WAR. Add in pitchers and he's 46th. (True talent blah blah blah :-) But part of his problem would also be that there are a number of guys in this group who aren't making tons of money -- Zobrist, Uribe, Hardy, Peralta, Utley, Ellis, Prado.

It's true that I can't see any rational reason why Peralta can get 4/$53 while Drew can't even get a decent 1-year offer, loss of pick or not. But when JJ Hardy is in the last year of a 3/$22.5 deal, I can't see any rational reason for the similar and probably worse Drew to pass on 1/$13 (or use his leverage of 1/13 to negotiate 2/20).

   24. Bug Selig Posted: April 12, 2014 at 06:16 PM (#4685138)
Going without Stephen Drew, for example, in order to save a draft pick that might turn into a player as good as Stephen Drew in five to seven years, is just stupid.


To buy this statement, you have to believe quite a string of not-slam-dunk things:

1 - Stephen Drew is a big deal.
2 - Stephen Drew is likely to be healthy.
3 - Stephen Drew is going to agree to a reasonable contract.
4 - The team(s) you are calling stupid is/are in such a position that a win or two drastically changes their outlook.
5 - The team(s) you are calling stupid is/are drastically in need of a shortstop, or #4 become even more true because the marginal gain shrinks. (#4 and #5 are much less likely to be true simultaneously than separately.)
6 - The amount the team gets to underpay the draft pick prior to FA is completely offset by the risk of him failing.

None of those are ridiculous things to think, but believing them all is pretty close.
   25. cardsfanboy Posted: April 12, 2014 at 06:29 PM (#4685146)
On Drew et al's ranking -- remember, it's not whether he's the 50th best (or whatever) player, it's whether he's the 50th best FA-eligible player. The top 125 are going to almost all be such players as young stars are badly underpaid relative to value. (Exceptions obviously for guys like Trout who will crack the top 125 in a year or two.)


But in regards to free agency rules and the qualifying offer, it's the average of the top 125 contracts that matters, has nothing to do with the quality of those players. I think that this is about the one thing they have right, it turns up to be a pretty good amount but not generally a team killer.

I like the idea of the QO remaining in effect until the team rescinds it but if that's not gonna fly with the teams, another alternative is to add the rule that a player can't be subject to a QO in consecutive seasons.


That is an excellent idea. It still sucks for the player that another year is lost, but it's better than nothing.
   26. greenback calls it soccer Posted: April 12, 2014 at 06:31 PM (#4685148)
I like the idea of the QO remaining in effect until the team rescinds it but if that's not gonna fly with the teams

It wouldn't be hard to make a few adjustments. For example, after X days the QO could be reduced by 20%. Or the arrangement could be flipped, so that the team has the right to back out of the offer (thus losing the draft pick) if the offer is accepted after X days; in effect the player would be making the offer then.
   27. Steve Balboni's Personal Trainer Posted: April 12, 2014 at 06:54 PM (#4685154)
Not really "much" larger pool 13 players were offered qualifying offers and 2 didn't get a contract and Ervin Santana didn't get one until spring training had already started.


The pool is much larger, because the vast majority of free agents were not given qualifying offers. For example, the Red Sox chose not to give Saltalamacchia a QO, because they thought he would take it! Instead, Salty got a three year deal from the Marlins...for far lower AAV than the $15.1m deal he would have received in if the Red Sox had given him a QO. The market worked out just fine for him - and the vast majority of free agents. You can't just count the 13 or so that got QOs - you have to include the scores of players who did not. The system worked out just fine for all but two of those (what?) 150 players.
   28. cardsfanboy Posted: April 12, 2014 at 07:04 PM (#4685157)
The pool is much larger, because the vast majority of free agents were not given qualifying offers. For example, the Red Sox chose not to give Saltalamacchia a QO, because they thought he would take it! Instead, Salty got a three year deal from the Marlins...for far lower AAV than the $15.1m deal he would have received in if the Red Sox had given him a QO. The market worked out just fine for him - and the vast majority of free agents. You can't just count the 13 or so that got QOs - you have to include the scores of players who did not. The system worked out just fine for all but two of those (what?) 150 players.


But that isn't the complaint. The complaint is that the specific option of qualifying offer is screwing over the players who fall into that group. It doesn't matter what happens to the people who don't fall into that group. The point is this segment of the system is broken and it's screwing a few people.
   29. Bhaakon Posted: April 12, 2014 at 07:09 PM (#4685158)
It wouldn't be hard to make a few adjustments. For example, after X days the QO could be reduced by 20%. Or the arrangement could be flipped, so that the team has the right to back out of the offer (thus losing the draft pick) if the offer is accepted after X days; in effect the player would be making the offer then.


Or the QO has includes player options for 25% less of the original QO every time they're exercised. So, basically, if the QO is 14M, then it becomes a 1 year, $14M contract with player options for 10.5M after the first year, 7M after the second, and 3.5M in the final season. If all are accepted, it's a front-loaded 4 year, $35M contract.
   30. Jim Wisinski Posted: April 12, 2014 at 07:33 PM (#4685167)
It's true that I can't see any rational reason why Peralta can get 4/$53 while Drew can't even get a decent 1-year offer, loss of pick or not.


One of the articles about Drew and Morales (I think it was one of Heyman's Boras ball-washings) said that they were willing to hold out as long as necessary to get the multi-year deals they want. So there's no reason to think that Drew is even listening to one year offers at this point.

Anyway, as I said above and elsewhere, I don't believe for a second that they would still be on the market if they were willing to accept reasonable contracts instead of Drew wanting 5/$75 and Morales wanting 3-4 years at a relatively high AAV.
   31. Jose Is The Most Absurd Thing on the Site Posted: April 12, 2014 at 07:49 PM (#4685170)
But that isn't the complaint. The complaint is that the specific option of qualifying offer is screwing over the players who fall into that group. It doesn't matter what happens to the people who don't fall into that group. The point is this segment of the system is broken and it's screwing a few people.


No one is getting screwed, they are just making a negotiating mistake. The QO may be new but the draft pick compensation thing has been around for years. Right now the "problem" that exists is that agents and players have not adapted to the new realities of how draft picks are valued. Drew, Morales and Boras are simply three people who misread the market. That happens every year on both sides of the table. How many owners have been derided for "bidding against themselves" over the years? Should we institute a hard salary cap or limits on the lengths of contracts to avoid owners from getting screwed by A-Rod/Howard/etc...deals?

The situation sucks for Drew and Morales because they put themselves in this situation but the "fault" such that it is lies with them and their agent.

With that said a player who gets a QO one year should be exempt from the QO process the following year. So in this case Drew/Morales should have had the freedom to sign the one year deal secure in the knowledge that they would truly be free agents next year. I think that is a no brainer (and if it's already true that's good).
   32. Steve Balboni's Personal Trainer Posted: April 12, 2014 at 11:00 PM (#4685221)
The pool is much larger, because the vast majority of free agents were not given qualifying offers. For example, the Red Sox chose not to give Saltalamacchia a QO, because they thought he would take it! Instead, Salty got a three year deal from the Marlins...for far lower AAV than the $15.1m deal he would have received in if the Red Sox had given him a QO. The market worked out just fine for him - and the vast majority of free agents. You can't just count the 13 or so that got QOs - you have to include the scores of players who did not. The system worked out just fine for all but two of those (what?) 150 players.


But that isn't the complaint. The complaint is that the specific option of qualifying offer is screwing over the players who fall into that group. It doesn't matter what happens to the people who don't fall into that group. The point is this segment of the system is broken and it's screwing a few people.


You have to include all the free agents - the vast majority who do not receive a QO, as well as the baker's dozen who did - because virtually every one of theoretically required the front office to "decide" if they might be worth the $15.1m for a year, and if there was a reasonable chance they would accept it. Of course, for most of the "decisions", this is a no-brainer, but for different reasons. 90-something percent of free agents are obviously not worth $15.1 million for a season, and if they were ever given the QO, would accept it immediately. For a subset of the 13 who received it, they were obviously going to reject it, because they could do better (like McCann and Ellsbury, for example).

There are probably 15 players every year who are free agents, and for whom the decision on both the front office side and the player side is not clear. A lot of people around Boston thought the Sox should have offered Saltalamacchia the QO, because either a) he would reject it, and then attach a draft pick to going elsewhere, or b) he would accept it, and Boston's two excellent catching prospects, who are both a year away, wouldn't need to be rushed.

What did the Red Sox do? They didn't offer the QO, because they strongly suspected he knew he wouldn't do as well in the open market, and he'd grab the QO. They made the right call - and Saltalamacchia knew as much, when he responded to getting his 3 yr/$22m deal with Miami.

Stephen Drew? A lot of us thought he should have taken the QO back in the day, because he's a SS who gets hurt a lot, had a dreadful post-season, is over 30, and wasn't going to get $15m/yr from any other team. THe Sox didn't need him, anyway - they have Bogaerts to play SS, and they probably would have traded him during the season, anyway, preventing the acquiring team from offering him a QO after the 2014 season, anyway. Then, he'd get his multi-year deal, and make $15.1 for 2014.

How is the fact that he and Boras didn't see this coming the system's fault? Morales is an even sillier case - he's a 31 year old DH who is a pretty good hitter...but he's not a $15m a year player. Not even close. When you're a $10 million/yr player, and somebody offers you $15.1 for one year, and the best you were going to do was, what, 3/$30m, and you can make more than half of that in one year? You take it.
   33. DL from MN Posted: April 12, 2014 at 11:24 PM (#4685226)
The reason draft pick compensation hurts the player is the signing team has to give it up. If the draft picks were just sandwich picks the player gets his contract, the signing team gets the player they want and the team that loses the player gets compensation. Everyone wins.
   34. Brian White Posted: April 12, 2014 at 11:40 PM (#4685229)
With that said a player who gets a QO one year should be exempt from the QO process the following year. So in this case Drew/Morales should have had the freedom to sign the one year deal secure in the knowledge that they would truly be free agents next year. I think that is a no brainer (and if it's already true that's good).


But the ability to extend a QO to a free agent signed for one year is a positive incentive for teams, one which is probably quite necessary for this caliber of free agent to even get a one year deal if they realize they completely misjudged the market.

If, for instance, the Braves can't extend a QO to Ervin Santana after this year, to either reclaim their lost draft pick or retain his services another year, they might not sign him in the first place. He might be sitting around with Drew and Morales in the unemployed baseball players club.
   35. Dan Posted: April 13, 2014 at 12:55 AM (#4685272)
With that said a player who gets a QO one year should be exempt from the QO process the following year. So in this case Drew/Morales should have had the freedom to sign the one year deal secure in the knowledge that they would truly be free agents next year. I think that is a no brainer (and if it's already true that's good).


In addition to the issue that Brian White showed in post #34, isn't this also asking for trouble when a top free agent (let's call him Hryce Barper) takes a QO for one year to stay with his original team so that he can then go on the market the next year without draft pick compensation and go ask the Yankees for a $500M contract. You'd be looking at losing ~$10M or so of salary in that one year, but a large market team like the Yankees could easily view the ability to keep their first round pick at significantly more than that, especially considering that they end up surrendering their top pick almost every season. And then the entire purpose of the draft pick compensation system is circumvented. The Nationals do gain an extra year of Barper at a discounted price, but they lose the extra chance to draft the next Barper. I suspect they'd rather have the latter.

I don't think their fix recommended in this thread is necessary at all. Players and agents need to adjust to the realties of the current FA market and draft compensation, and guys like Drew and Morales need to re-consider whether Boras' brinksmanship tactics are optimal for players without the kind of leverage that top tier guys like McCann and Cano have.
   36. Bhaakon Posted: April 13, 2014 at 04:00 AM (#4685292)
The Nationals do gain an extra year of Barper at a discounted price, but they lose the extra chance to draft the next Barper. I suspect they'd rather have the latter.


Not really, since the average #1 pick is worth something like 20 WAR, and Harper was highly touted even by overall #1 pick standards. Technically there's a chance that the Nats could get that kind of return on the #11 or worse compensation pick, but it's a longshot. A pick in that range is usually worth 4-6 WAR, which is a reasonable (maybe conservative) estimate of what Harper might put up in that 7th season of team control. 1 extra year of Harper or a compensation pick is fairly close to a break-even proposition.
   37. greenback calls it soccer Posted: April 13, 2014 at 07:39 AM (#4685294)
Players and agents need to adjust to the realties of the current FA market and draft compensation, and guys like Drew and Morales need to re-consider whether Boras' brinksmanship tactics are optimal for players without the kind of leverage that top tier guys like McCann and Cano have.

The point here is that adjusting to the market is much more difficult than it should be. Stephen Drew can't get a job now because he misread the market four months ago. Literally the only thing he can do now to adjust for that mistake is sit on his couch until June. His real value is diminished because of a perceptual mistake.

As the Peralta comments implied, the market for Drew's services is unique, and the timing of the QO precludes any kind of exploration of that market for all mid-major free agents. That sounds like a problem.
   38. bobm Posted: April 13, 2014 at 08:49 AM (#4685299)
One of the articles about Drew and Morales (I think it was one of Heyman's Boras ball-washings) said that they were willing to hold out as long as necessary to get the multi-year deals they want. So there's no reason to think that Drew is even listening to one year offers at this point.

Source: Drew seeks opt-out after Year 1

 By Adam Rubin | February 6, 2014 11:51:34 PM PST

Scott Boras wants an opt-out clause for Stephen Drew after Year 1 of a multiyear deal, a source told ESPNNewYork.com. That's not going to fly with the Mets, who otherwise still remain in play for the free-agent shortstop. [...] As for the opt-out, that's a deal-breaker for the Mets, apparently. That's because Drew could again enter free agency after a good season in 2014. And with a poor season he would be locked in to one or two more seasons guaranteed -- placing all of the risk on the team side.
   39. valuearbitrageur Posted: April 13, 2014 at 11:12 AM (#4685357)
Going without Stephen Drew, for example, in order to save a draft pick that might turn into a player as good as Stephen Drew in five to seven years, is just stupid.


The Yankees clearly disprove this. They've forgone their 1st round picks and picked up fewer comp picks than any other team the last decade, and their farm system is a disaster.

Whether you believe it to be $5M or $25M, first round picks are very valuable. A free agent may not be as valuable.
   40. Steve Balboni's Personal Trainer Posted: April 13, 2014 at 12:41 PM (#4685381)
Isn't the bottom line in all this that Stephen Drew and Kendrys Morales aren't as good as they (and Scott Boras) thinks they are?
   41. villageidiom Posted: April 13, 2014 at 04:13 PM (#4685523)
Isn't the bottom line in all this that Stephen Drew and Kendrys Morales aren't as good as they (and Scott Boras) thinks they are?
Yes.

Drew needed to establish in 2013 that he could stay healthy, and... he didn't stay healthy. Based on the low standards set by his history he was very healthy, but that's not a high enough standard for a multi-year deal.

Drew is the very narrow example of a player who gets screwed by the QO system in its current state. Nobody wants him for a multi-year deal. All teams but one would have to forfeit a pick to get him, and they don't want to do that for a one-year deal. And the one exception, Boston, already has a fine solution for the position Drew plays. And Drew doesn't want a one year deal. There is no solution that makes everyone happy. Alas.
   42. bobm Posted: April 13, 2014 at 04:18 PM (#4685528)
[41] All teams but one would have to forfeit a pick to get him, and they don't want to do that for a one-year deal.

Aren't the first 10 picks protected from forfeiture?
   43. JJ1986 Posted: April 13, 2014 at 04:20 PM (#4685529)
They could easily fix it by making the forfeitures be second round picks. First round picks are just incredibly valuable now that they don't only represent a player but a large portion of the budget that you can spend.
   44. cardsfanboy Posted: April 13, 2014 at 04:22 PM (#4685530)
I like the concept of a penalty to teams who sign a free agent, I have never had a problem with that in the past, but I think that this is possibly a little too much of a penalty. It's a combination of so very few comp picks compared to the past, which makes it tough for a team to sign a player while losing a player and effectively keeping their picks. The reduction in the number of comp picks has probably broken the system in ways never intended.
   45. Brian White Posted: April 13, 2014 at 05:18 PM (#4685568)
The Yankees clearly disprove this. They've forgone their 1st round picks and picked up fewer comp picks than any other team the last decade, and their farm system is a disaster.

Whether you believe it to be $5M or $25M, first round picks are very valuable. A free agent may not be as valuable.


You know what else the Yankees haven't had in the last decade? A losing season.

The objective isn't to have the best farm system. The objective is to win major league baseball games. First round picks have value, but it isn't entirely necessary to have a whole bunch of them to run a successful major league team.

   46. Walt Davis Posted: April 13, 2014 at 06:29 PM (#4685602)
Ummm ... number of 1 and 1s picks by the Yanks, 2004-2013: 16

Picks included Joba, Hughes, Kennedy and an unsigned Gerrit Cole. 22 WAR total from those three although they got little of Kennedy's direct value.

The Yanks played the old system like a fiddle -- they'd surrender their pick signing a top FA but then receive somebody else's pick (often a higher one than they started with) when one of their FAs was signed. They seem to have started off well in the new system with 3 picks in 2013.

The only years they didn't have a 1st round pick were 2009 and 2011 and in both years they had a 1s pick. In fact, for whatever reason, their 2009 "1s" pick was actually the 29th pick so right about where they usually pick in the 1st round (they would have picked higher that year but decided instead to sign CC, Tex and Pettitte and win 103 games and the WS. Idiots.

Over that time period, there have been a bit over 500 1 and 1s picks so the Yanks total of 16 is about 1 below average. One pick below average, a #30 say, for 10 years of FA signings. Morons.



   47. Walt Davis Posted: April 13, 2014 at 06:47 PM (#4685615)
Carlos Beltran
Robinson Cano
Shin-Soo Choo
Nelson Cruz
Stephen Drew
Jacoby Ellsbury
Curtis Granderson
Ubaldo Jimenez
Hiroki Kuroda
Brian McCann
Kendrys Morales
Mike Napoli
Ervin Santana


And in this group, Cano, Ellsbury and McCann were clearly not going to have trouble finding better offers and Kuroda wasn't likely to sign with anybody but the Yanks. You could argue Choo was certain to get a multi-year deal but I'll leave him in.

Take out those 4 and you're now talking about 2 of the 9 unsigned plus Cruz signed for less than the QO. Santana was signed in an emergency at the QO value.

But I will agree that it's not clear the system is "broken." I think it is clear though that it is a system the MLBPA will want to change if this is the way it's going to work which is what really matters.

That said, this does seem the way this system is supposed to work. The QO was supposed to be high enough to give the team pause -- and specifically make it easier for RPs and other lower-level FAs to get contracts -- and the draft pick comp low enough not to affect the premier FAs. Inevitably there would be borderline players where there was real "risk" to the team that the player would accept and real risk to the player that the market wouldn't beat that offer. You'd expect about half of those to bite the team in the butt -- either by offering to somebody they shouldn't or by not offering to somebody they could have gotten comp for -- and half to bite the players in the butt -- either by accepting a QO when they could have done better or going on the market and doing worse.

It seems that teams have generally acted to minimize their risk, only making QOs on players they would be happy to have back at 1/$13.

Another possibly unintended consequence of this system could be the encouragement of young players to sign long-term buyouts and extensions. If you're good not great, you want to avoid being the next Drew/Santana when you hit FA. It also possibly sets a metric for such buyouts -- I wonder if we'll start seeing contracts where the FA years are bought out at $X or the QO value, whichever is higher. Or player options priced at the QO value -- e.g. a 2014 team option priced at $18 M and a 2014 player option priced at the QO.

   48. valuearbitrageur Posted: April 13, 2014 at 11:13 PM (#4685723)
You know what else the Yankees haven't had in the last decade? A losing season.

The objective isn't to have the best farm system. The objective is to win major league baseball games. First round picks have value, but it isn't entirely necessary to have a whole bunch of them to run a successful major league team.


Well the point was they won't have as many winning seasons in the near future, since their victories the last decade were built on a farm talent from the previous decade, much that was accumulated/hoarded during Steinfelons absence. Now the Yanks have little to help them down on the farm, it will be back to Steinbrenners 80s repeated.

The only years they didn't have a 1st round pick were 2009 and 2011 and in both years they had a 1s pick. In fact, for whatever reason, their 2009 "1s" pick was actually the 29th pick so right about where they usually pick in the 1st round (they would have picked higher that year but decided instead to sign CC, Tex and Pettitte and win 103 games and the WS. Idiots.

Over that time period, there have been a bit over 500 1 and 1s picks so the Yanks total of 16 is about 1 below average. One pick below average, a #30 say, for 10 years of FA signings. Morons.


Yes, I guess I should have wasted some of my time qualifying a general statement to pedantic proof it against the forest for the trees types.

The point was the Yankees farm sucks now and missing first round picks are a big reason why. Over the most important part of that period for the Yankees current farm system, 2008-2012 where the average MLB team had 9 first round picks, the Yankees had 6. But even worse, their average pick position was 36th, well behind the average pick position of 25th in that period.

You are aware that draft position matters aren't you? The Yankees need to average more picks than other teams to get similar value. Is it your position that neither draft volume or position are valuable in acquiring useful talent?

The Yankees apparently agree with me, they saw how awful their system was and switched course in 2013 to pickup 3 first round/comp picks.

So my point stands unrebutted that picks are valuable, and can be more valuable than signing free agents. Certainly paying Stephen Drew $60M and surrendering a draft pick is likely a far worse use of resources than keeping the pick and $60m and using both in better ways.

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