Major League Baseball teams expecting to receive compensation for their departing free agent players will have the option to make them a qualifying offer of $17.2 million this offseason. That number is up from $15.3 million the previous year. Although the collective bargaining agreement (CBA), which sets the rules for free agent compensation, is set to expire on December 1, the current qualifying offer rules are expected to remain in place until a new agreement is reached.
The qualifying offer is an average of the 125 highest salaries in MLB, including bonuses. The Detroit Tigers won’t be making any qualifying offers this year, since their only pending free agents are Erick Aybar, Jarrod Saltalamacchia, and Casey McGehee. It is also unlikely that the Tigers will be signing any top-tier free agent players during the offseason, as their payroll is already well into luxury tax territory.
In order to receive compensation for a departing free agent player, teams must make a qualifying offer within five days after the end of the World Series. Players then have seven days to accept the offer for one season, or decline the offer and become a free agent. Teams that lose a player who declines a qualifying offer will receive a supplemental first round draft pick. Teams that sign a player who has rejected a qualifying offer will lose their highest available draft pick. The first 10 overall draft picks are protected, so those teams would lose their second-highest pick.
The Tigers were able to keep their first round pick in 2016, the ninth overall in the draft, but they lost their second and third round picks for signing Jordan Zimmermann and Justin Upton to free agent contracts. The Tigers gave up their first round picks in three consecutive years from 2012 to 2014 for signing Jose Valverde, Victor Martinez, and Prince Fielder. Detroit has the 20th overall selection in the 2017 draft.
A player must spend at least one full season with his prior team in order to be eligible to receive a qualifying offer. For example, Kenley Jansen will be subject to a qualifying offer and the attached compensation, but Aroldis Chapman will not because he was traded during the past season. Most players worthy of getting a qualifying offer can score a better deal with a multi-year contract on the free agent market.
The CBA could be modified both in terms of the compensation that teams pay for signing a player who declines a qualifying offer and with respect to the compensation that teams receive when a player declines a qualifying offer and opts for free agency. Only three players who were given a qualifying offer last season accepted the offers to stay with their previous teams. No players had accepted a qualifying offer in any previous season since the current free agent compensation scheme was implemented.
Some players have had difficulty finding teams willing to sign them because of the compensation tied to them, and the MLB Players’ Association (MLBPA) would surely like to remove at least the payment of compensation for signing free agent players. However, very few players are actually affected, so it’s not a high priority for the MLBPA.
On the other side of the equation, most of the compensation picks awarded have gone to teams who have made the playoffs. Most teams that are not contending elect to trade their pending free agent players for prospects before they can leave via free agency. This was the case with the Tigers when the traded Yoenis Cespedes, David Price, and Joakim Soria at the trade deadline in 2015. Cespedes can opt out of his contract with the New York Mets after this season and test the free agent market yet again, but will be subject to this offseason’s qualifying offer.