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Wednesday, October 31, 2012

The Qualifying Offer and You | FanGraphs Baseball

Details about how qualifying offers and free agent compensation now work. Read the whole article.

The qualifying offer is a one-year contract worth the average of the top 125 salaries. This year, that average is $13.3 million. A qualifying offer may only be extended to a potential free agent who spent the entire previous season with the same team. So, for example, Josh Hamilton is eligible, but Zack Greinke is not, having been dealt to Anaheim in July. The qualifying offer must be extended within five days of the conclusion of the World Series, which means midnight this Friday. The player then has seven days to make a decision regarding the offer. The former window is referred to in the CBA as the Quiet Period. The latter window is referred to in the CBA as the Acceptance Period. It is absolutely vital that these windows have names.

If a player accepts the qualifying offer, that’s it, he’s signed. If a player doesn’t receive a qualifying offer, he’s free to sign anywhere and there’s no compensation to talk about. If a player declines the qualifying offer and signs elsewhere, or if a player signs elsewhere within the Acceptance Period, then that’s where compensation becomes a thing.

Jim Furtado Posted: October 31, 2012 at 10:36 AM | 33 comment(s) Login to Bookmark
  Tags: arbitration, free agents

Reader Comments and Retorts

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Statements posted here are those of our readers and do not represent the BaseballThinkFactory. Names are provided by the poster and are not verified. We ask that posters follow our submission policy. Please report any inappropriate comments.

   1. JJ1986 Posted: October 31, 2012 at 10:46 AM (#4289173)
So, who's going to get the QOs:

Ortiz (if he's not signed)
Hamilton
Bourn
Napoli
Swisher
Kuroda

Upton?
LaRoche?
Pagan?
Hunter?
Pettitte?
   2. UCCF Posted: October 31, 2012 at 10:55 AM (#4289177)
The average of the top 125 salaries is $13.3 million? That seems surprisingly high.
   3. Avoid running at all times.-S. Paige Posted: October 31, 2012 at 10:56 AM (#4289178)
Rafael Soriano
   4. Matt Clement of Alexandria Posted: October 31, 2012 at 10:59 AM (#4289181)
From MLB Trade Rumors, their projection. I agree with most of their calls.

Definitely: Hamilton, Bourn, Upton, Swisher, Ortiz, Soriano
Probably: Jackson, LaRoche, Kuroda, Lohse, Pagan
Maybe: Haren
Probably not: Napoli, Hunter

I'm a little surprised about LaRoche - the Nats have apparently indicated they want LaRoche back and are likely to offer. He had a very good year, but it was coming off two lost seasons. I guess $13M isn't much more than a league average player salary, and the Nats have money.

I think the Angels are probably being pound-foolish with Haren, given his upside and recent All-Star performance. But there are warning signs (big drop in fastball velocity) and if they want him gone, perhaps they might as well cut the cord.

If the Rangers don't offer to Napoli, that's very silly. He's obviously worth one year, $13M, and their ownership should allow them to budget that if he accepts.
   5. JJ1986 Posted: October 31, 2012 at 11:09 AM (#4289184)
Haren has a $15.5m contract option with a $3.5m buyout. If they bought him out and then he accepted, they'd end up paying him more money than they would by picking up his option.
   6. Jose Can Still Seabiscuit Posted: October 31, 2012 at 11:18 AM (#4289189)
Lohse and Pagan look like the two guys on that MLBTR list who would probably be most hurt by getting a qualifying offer. That's the two guys that if I were a GM I'd be a bit less enthusiastic about signing if I knew it was going to cost me a first rounder.
   7. Matt Clement of Alexandria Posted: October 31, 2012 at 11:18 AM (#4289190)
Haren has a $15.5m contract option with a $3.5m buyout. If they bought him out and then he accepted, they'd end up paying him more money than they would by picking up his option.
I know. But if they buy Haren out, then offer, and he doesn't accept, they get a draft pick. You're basically risking $1M to get the equivalent of a late-first round pick. That's not a terrible risk. (I think they should probably just pick up his option, anyway.)

EDIT: I had forgotten about the changes to the compensation system when I first posted. There are no transfered picks anymore, just sandwich round compensation. But teams that sign QO'd free agents lose their first-round picks, unless protected, which means the sandwich picks will be several picks higher this year than they used to be. I edited to fix that in the first paragraph.
   8. RoyalsRetro (AG#1F) Posted: October 31, 2012 at 11:44 AM (#4289213)
I'm guessing Haren has back issues and the Angels don't want to take the risk. If they let him go, his health has a red flag.

Angel Pagan is going to get $13.5 million? WTF?
   9. Greg Pope thinks the Cubs are reeking havoc Posted: October 31, 2012 at 11:51 AM (#4289220)
Are there limitations on the old team re-signing the guy, like there was in the offer/decline arbitration situation? With arbitration if the team didn't offer it or the player didn't accept then they couldn't re-sign the guy until May or something like that.
   10. Matt Clement of Alexandria Posted: October 31, 2012 at 11:54 AM (#4289222)
Angel Pagan is going to get $13.5 million? WTF?
Dumber-than-Marcel projection for Pagan:

+ 6 Bat + 5 Run + 19 Rep + 1 Pos - 0 Def = +31 RAR

At a rate of $5-6M per win, that's easily a $13M player on a one-year contract.

Pagan's an above average hitter, an average defender at an up-the-middle position, and an elite baserunner. That's basically the story. I don't know how much I'd want to commit to him for his age 33-35 seasons, but on a one-year deal for his age-31 season, sign me up.
   11. DL from MN Posted: October 31, 2012 at 12:26 PM (#4289253)
I believe if they don't offer the player is a free agent and can sign with any team without restrictions.
   12. Greg Pope thinks the Cubs are reeking havoc Posted: October 31, 2012 at 12:30 PM (#4289260)
Right but can he resign with his old team without any restrictions?
   13. SOLockwood Posted: October 31, 2012 at 12:31 PM (#4289261)
Can a team make multiple offers to a Free Agent: Say 1 year for the QO level ($13.3 M) & 3/$27M?
   14. Der-K: Hipster doofus Posted: October 31, 2012 at 12:36 PM (#4289266)
12 - yes
13 - sure, you can offer whatever you want right now.
If a player accepts the qualifying offer, that’s it, he’s signed. If a player doesn’t receive a qualifying offer, he’s free to sign anywhere and there’s no compensation to talk about. If a player declines the qualifying offer and signs elsewhere, or if a player signs elsewhere within the Acceptance Period, then that’s where compensation becomes a thing.
   15. Nasty Nate Posted: October 31, 2012 at 01:08 PM (#4289290)

Definitely: Hamilton, Bourn, Upton, Swisher, Ortiz, Soriano


Wouldn't the Yankees be tempted to not offer Soriano the offer?
   16. BDC Posted: October 31, 2012 at 01:11 PM (#4289292)
If the Rangers don't offer to Napoli, that's very silly. He's obviously worth one year, $13M, and their ownership should allow them to budget that if he accepts

Absolutely. He probably won't have another year soon where he hits like Mike Piazza, but even hitting like Todd Hundley as he did last year in limited playing time is darn good; and odds are he'll revert a bit in the direction of Piazza if he's healthy and plays a full season. I'd love for him to take 1/13.3.
   17. Lassus Posted: October 31, 2012 at 01:18 PM (#4289303)
Am I just biased when I think that Angel Pagan is not just average defensively for his position? I don't think he's top three, but I think he's above average.
   18. Poster Nutbag Posted: October 31, 2012 at 01:33 PM (#4289315)
RE: Haren

Traded or non-tendered. By the end of the week.
   19. Tom Cervo, backup catcher Posted: October 31, 2012 at 02:19 PM (#4289349)
Wouldn't the Yankees be tempted to not offer Soriano the offer?


With Mo an unknown even if he decides to come back, I'm sure the Yankees would love to have him back for one more year since it wouldn't affect their hopes of getting under the luxury tax for 2014.
   20. RB in NYC (Now Semi-Retired from BBTF) Posted: October 31, 2012 at 02:30 PM (#4289365)
Wouldn't the Yankees be tempted to not offer Soriano the offer?
Why wouldn't they? If Soriano opts-out, he gets $1.5 million. If he then accepts the offer, he gets another $13.3 million. So that's a great total of $14.8 million. If Soriano doesn't opt-out, his 2013 salary is $14 million. So the Yankees are "risking" $800,000 for the sandwich pick. I don't think any question they take that chance.

(This is also why, I suspect, there's basically no chance Soriano opts out of the deal then takes the qualifying offer. Someone will surely give him more than an extra $800K for 2013.)
   21. Nasty Nate Posted: October 31, 2012 at 02:40 PM (#4289377)
So the Yankees are "risking" $800,000 for the sandwich pick. I don't think any question they take that chance.


They are risking him accepting and giving him a 1-year $13.3m contract. If they see this as a good deal, it's no risk at all to give him a qualifying offer.

By opting-out, Soriano can "lose" if both the Yankees do not give a qualifying offer and he doesn't receive a better offer than $12.5 from some other team.

The Yankees are paying the $800k in some form or another either way so they are not risking it.
   22. UCCF Posted: October 31, 2012 at 03:26 PM (#4289425)
Soriano opted out.
   23. RB in NYC (Now Semi-Retired from BBTF) Posted: October 31, 2012 at 04:21 PM (#4289465)
Soriano opted out.
No surprise there. Given League's deal, I'm sure Soriano will do better than his last option year.
   24. jacksone (AKA It's OK...) Posted: October 31, 2012 at 04:21 PM (#4289466)
Is the QO based on the yearly average? If $13.3 gets it done for 1 year, would it have to be at least $26.6 for 2? Would $13.4/2 yrs qualify? I feel like I am being dense, just not getting the full understanding of this for some reason.
   25. The Artist Posted: October 31, 2012 at 04:30 PM (#4289478)
Pagan seems like a no-brainer to offer the QQ to. Don't know if I'd give him 4/50, but a one year risk - why not?
   26. The Artist Posted: October 31, 2012 at 04:33 PM (#4289481)
#24 - Jacksone, its a one-year deal only. You could offer 1/13.3 and the guy could take 2/16.
   27. Nasty Nate Posted: October 31, 2012 at 04:46 PM (#4289490)
Is the QO based on the yearly average? If $13.3 gets it done for 1 year, would it have to be at least $26.6 for 2? Would $13.4/2 yrs qualify? I feel like I am being dense, just not getting the full understanding of this for some reason.


The QO is exactly 1/$13.3 for all players/teams. But teams can and will offer contracts to the players during the same time period. E.G. the Rangers can extend the QO to Josh Hamilton while simultaneously offering him a 4/$100m contract.
   28. dr. scott Posted: October 31, 2012 at 05:03 PM (#4289501)
Am I just biased when I think that Angel Pagan is not just average defensively for his position? I don't think he's top three, but I think he's above average.


having watched him the whole season i got the impression that he was lost in the start of the season, and then got much better. On average he was probably average to slightly below for the season, but above average, but not ouststanding for the last part of the season. It helped that he had two great fielders next to him for most of the season too.

edit: fan graphs had him at 0.1 dwar, and BBref had him at -.3... so yea average to a bit below.
   29. Eddo Posted: October 31, 2012 at 05:45 PM (#4289545)
The QO is exactly 1/$13.3 for all players/teams. But teams can and will offer contracts to the players during the same time period. E.G. the Rangers can extend the QO to Josh Hamilton while simultaneously offering him a 4/$100m contract.

In your example, how do the draft picks shake out if:
A) Hamilton accepts the QO?
B) Hamilton accepts the 4-year deal?
C) Hamilton accepts the QO and then signs an extension for three more years and an extra $87.7M?
   30. Swedish Chef Posted: October 31, 2012 at 06:03 PM (#4289554)
In your example, how do the draft picks shake out if:

None of those matters, the only thing that matters is if he signs elsewhere whether he got an QO or not.
   31. Nasty Nate Posted: October 31, 2012 at 06:13 PM (#4289559)
In your example, how do the draft picks shake out if:
A) Hamilton accepts the QO?
B) Hamilton accepts the 4-year deal?
C) Hamilton accepts the QO and then signs an extension for three more years and an extra $87.7M?


no draft picks change hands for any of these.
   32. RoyalsRetro (AG#1F) Posted: November 02, 2012 at 04:54 PM (#4291129)
Rangers offer QO to Hamilton, not to Napoli.
   33. RoyalsRetro (AG#1F) Posted: November 02, 2012 at 05:12 PM (#4291143)
Yanks offer to Soriano, Kuroda
Rays offer to Upton
Red Sox offer to Ortiz

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