Rosenthal On Compensation Free Agents

The three remaining free agents tied to draft-pick compensation — Ervin Santana, Stephen Drew, and Kendrys Morales — would all consider waiting to sign until after the June amateur draft, reports Ken Rosenthal of FOX Sports. Rosenthal’s piece builds upon a prior report from MLBTR’s Tim Dierkes, who noted that those players could be considering the strategy, which would prevent their former clubs — the Royals, Red Sox, and Mariners — from picking up an extra draft choice.

Here’s how it works: If a sufficient offer is not forthcoming, these free agents could change their market situation by waiting until after the draft to sign. At that point, a new signing club would no longer need to sacrifice a pick, and their prior club would not stand to earn one.

Interestingly, Rosenthal also suggested a twist on that strategy, noting that a player could avoid a future qualifying offer just by waiting until after Opening Day to sign. If any of the three remaining draft-pick bound players was forced to settle for a one-year deal (like Cruz), he could use that approach to ensure that his new club would not once again saddle him with compensation, while also ensuring a full year’s payday (one of the problems with waiting until June to sign). Of course, there is a countervailing consideration: a signing club would lose the possibility of retaining the player through a qualifying offer or instead getting a compensation pick in return, which reduces the player’s value to his new club.

In the aggregate, these options constitute a set of increasingly high-stakes maneuvers, each carrying leverage trade-offs between the player and prospective clubs. For instance, as Dierkes has noted, the threat of a former team not gaining a compensation pick could make a re-signing more likely.

I would add that these two possible approaches each make more sense for different situations. A player who is planning to settle for a one-year pillow contract would take significant risk by waiting until June, because any increase in their annual salary would potentially be offset or eclipsed by the fact that they cannot earn all of it (not to mention risks of changes in how the market sees the player and in market demand). But that player would also potentially gain quite a bit by waiting for Opening Day to sign, because he would get to enter the following year’s market without compensation attached. The considerations go the other way for a player who still figures to land a multi-year deal, who would have relatively less to lose by skipping a few months of salary and, potentially, more to gain by shedding the burden of draft compensation. But if three years were already on the table, a free agent would gain nothing by waiting until after the start of the season to sign unless they were truly willing to sit all the way through the June draft.

The agents for the trio made clear to Rosenthal that they have thought through the rules, and are leaving all options on the table. Bean Stringfellow, Santana’s agent, said that waiting until after the draft is “certainly something we’ve talked about,” and made clear that his client would not follow Nelson Cruz in signing a one-year deal for substantially less than the $14.1MM qualifying offer. “Once you get past the draft,” said Stringfellow, “a lot of teams will be in play with the expanded playoffs. You wouldn’t have a draft pick attached. … Ervin Santana is a front-line starting pitcher. He will be compensated as such. Whatever it takes to make that happen, we will make it happen, simple as that.”

Scott Boras, who represents Drew and Morales, noted that other clubs also have incentives to wait until after the draft since they do not need to give up a pick to sign the player. He also notes that a signing would mean that those clubs would also potentially avoid the need to sign a future compensation player, and could potentially reap a future pick of their own when the player’s deal expires. “A road map for this strategy has been figured out,” said Boras. “There is a significant advantage under this system for teams to develop a plan to sign premium free-agent players — the top 6 to 12 percent — where they can gain draft currency and also improve their team in the current and long-term.”