The qualifying offer system has been around since the 2012-13 offseason, but it remains a complicated and sometimes misunderstood process. Teams will be making their decisions in short order, so it’s a good time for a quick refresher on how things work.
Here are the key components of the system:
- The value of the qualifying offer, which is determined annually by averaging the top 125 player salaries from the previous year, will be worth $15.8MM this offseason. All qualifying offers are for the same duration (one year) and the same amount (i.e., $15.8MM for 2015-16).
- Teams have until five days after the World Series to make qualifying offers. At that point the players have seven days to accept.
- Once a team makes a qualifying offer, the player has two choices: he can accept the one-year deal or decline in search of other offers. If he declines the offer and signs elsewhere, his new team will have to surrender a top draft pick (see more on this below).
- No player has ever taken a qualifying offer, but if one does, he cannot be traded (absent consent) until June 15 of the following season (i.e., 2016), as Steve Kinsella of Sports Talk Florida recently noted and MLBTR has confirmed. Even if a player grants such consent, only $50K in cash can be exchanged as part of the trade.
- Teams that sign free agents who turned down qualifying offers will surrender their first unprotected draft pick in the following year’s draft. The first ten selections in the draft are protected. This year, the Phillies, Reds, Braves, Rockies, Brewers, Athletics, Marlins, Padres, Tigers, and White Sox have protected choices. Those clubs would surrender their second-highest selections if they reach terms with a QO-declining free agent.
- Forfeited picks don’t go to other MLB teams (as they used to under the old Type A/B system). Instead, they disappear and the first round is condensed. In turn, teams that lose a player who declined a qualifying offer are awarded a compensatory pick at the end of the first round, before the competitive balance choices. Such compensation picks are awarded in the inverse order of record. As a result of these rules, the draft order is constantly fluctuating over the offseason. Click here for last year’s ultimate draft order to see how it can end up looking.
- When a team re-signs a player that has previously declined a qualifying offer from that team, no draft forfeiture or compensation takes place.
- Only players who have been with their clubs for the entire previous season are eligible for compensation. Thus, players traded mid-season — e.g., Johnny Cueto, Ben Zobrist, Yoenis Cespedes, and David Price — are not eligible to receive a qualifying offer.
- Qualifying offers operate independently of options. Hence, a player can receive a qualifying offer even if their option is declined (whether by team or player) or if they opt out of a deal. Hence, Zack Greinke is eligible for a qualifying offer if he opts out of his contract, as expected.
If you’re interested in learning more about the qualifying offer system’s function in practice, check out these prior posts from MLBTR: Avoiding The Qualifying Offer; Contextualizing The Qualifying Offer System; Assessing The Qualifying Offer System & Its Purposes. Also, MLBTR has run polls on some of the many players who appear to be debatable qualifying offer candidates this season. You can read more on their situations, and see the poll results, at the following links: Marco Estrada (Blue Jays); Matt Wieters (Orioles); Denard Span (Nationals); Daniel Murphy (Mets).
This post is adapted, in part, from this 2012 post from former MLBTR scribe Ben Nicholson-Smith.
If a player is given a qualifying offer and declines it, is the team that offered still eligible to pursue in free agency? Are there any restrictions on the QO team?
Yes, the player’s original team is free to pursue and re-sign a player after rejecting a qualifying offer.
The Tigers re-signed Victor Martinez to a four-year, $68MM contract last offseason after he rejected the qualifying offer, and the Pirates re-signed Francisco Liriano for $39MM over three years after he rejected.
If a player accepts a QO, can the team still work out a long term deal with the player or are they both bound to the one year deal?
Your questions were already addressed in the article. However, it did prompt Steve Adams to forward two good examples of it in his reply!
The qualifying offer has become more of a penalty for players than teams. Becoming more like a franchise tag than anything else. The QO used to be something some teams would have to seriously consider but based on revenue etc it’s almost an after thought.
The QO isn’t meant to be a penalty for a team, it’s meant to help them replace the loss of high-end talent.
Players whose value is only marginally more than the QO will always be hurt the worst. The simple solution is to start accepting it, but the reality is that players value the extra guarantee more than the potential for a higher overall earning potential. If that’s what they value, I don’t see it as a problem.
huh? This will be only the fourth season of the qualifying offer system, what year did it go from something teams would seriously consider to what it is now? Teams have used the QO system pretty much the same every year, and while far from perfect, its a big improvement to the old A B value system.
I’ve never liked that a player who’s team option is declined can be offered a Q.O.
There just seems to be something shady about saying to a guy, “hey, we don’t think you’re worth the money you want, and we don’t really want to bring you back to our team, but we certainly will take a draft pick for losing you.”
But declining a team option isn’t the team choosing not to pay the player the “money he want[s],” it’s the team choosing to not pay him the money he had wanted for that then-future season several years ago, possibly by some other team. In many hypotheticals for this scenario, the team would actually be offering the player *more* money by declining its option and making him a qualifying offer. Like say for R.A. Dickey or Adam Lind, if the Blue Jays and Brewers declined their options then made them qualifying offers, they’d be offering them each millions more than they needed to via their options.
Your second paragraph taken by itself reads more like a reasonable criticism of the qualifying offer system in general but has little to do with team options.
I guess I never thought of it that way. Good insight. Thanks.
Correct me if I’m wrong here, but I think the post neglects to mention a very important part of the process: after the player gets the qualifying offer, he or his agent is able to discuss interest and possible contracts with other teams during those next seven days before whether deciding to accept the offer or enter free agency. This negotiating period is why, while it might be reasonable to be surprised at a guy like Michael Cuddyer rejecting his qualifying offer, we shouldn’t be surprised at him agreeing to a superior contract shortly thereafter.
I agree that it’s worth noting, but I wouldn’t call it “very important.” Questionable QO level players like Cuddyer represent the exception not the rule.
Per MLB rules, the eligible free agents (for a qualifying offer) former team has exclusive ‘negotiating’ rights to enter into formal contract discussions during the 5 day “Quiet Period” following the conclusion of the World Series. The player and his representatives can discuss the general merits or parameters of a future deal with other clubs during this period, like role utilization, advantages of their organization or locale, even length of contract years, guarantee provisions and no-trade or limited no-trade provisions.
The former team has that 5 day “Quiet Period” to exclusively sign or extend the QO to it’s former player. The player has up to 7 days following the expiration of the “Quiet Period” to accept or reject the QO from his former team but can also begin formal contract discussions and officially sign with other clubs during this period.
I don’t know what the formula was for type A/B FA but I’d be curious to see who among the FA under the new CBA would have been what type of FA.
A hybrid system would make sense to me and help both mid-range players and teams with departing mid-range players. The QO could maybe be formulated a little higher and there could be a lower threshold based on performance. The lower level picks could be awarded without penalizing the signing team, or could just come lower in the draft.
Or something. Just an idea.
“Qualifying offers operate independently of options. Hence, a player can receive a qualifying offer even if their option is declined (whether by team or player) or if they opt out of a deal. Hence, Zack Greinke is eligible for a qualifying offer if he opts out of his contract, as expected.”
The ultimate no-brainer of the off-season would be for the Dodgers to extend the $15.8M QO to Zack Greinke and for the pitcher to reject it should he opt out of the remaining 3yrs/$77M contract due him from 2016 through 2018. Greinke earned $25M in 2015 in the third year of the 6 yrs/$147M free agent deal he signed with the Dodgers following the 2012 season. By opting out of his current contract, he will turn down $26M, $25M and $26M over the next 3 seasons. Meanwhile the Dodgers will be the only team pursuing Greinke in FA that won’t lose a first or second round draft pick while they would at least get a compensatory first round ‘sandwich’ pick should he sign elsewhere. (lol)
A fine article from last year that debates the issues associated with new QO system can be viewed at foxsports.com/mlb/just-a-bit-outside/story/mlb-qua…
You stated that nobody has ever accepted a QO. I seem to recall that David Ortiz did accept one when it was around $ 12.5 million. He was then considered ” signed ” for the season. The team then worked a longer term deal.
I believe he just signed the new deal on the same day the QO was issued.
That was actually accepting arbitration, before the new CBA and qualifying offers took hold. Similar idea though.
A procedural question: If a player accepts a QO, can his club extend another QO offer at the end of the next season, or is it one and done with the player then becoming a true Free Agent?
I don’t know if anyone’s going to come back to this thread, but here’s a question… Does this mean a team that signs one of these free agents could get some value in signing more? Like if they lose a 1st round pick to get Greinke, then sign Zimmerman and Heyward, they’d lose 2nd and 3rd round picks, right?
Absolutely. I can’t think of an example, but its been done recently. Also, I’m pretty sure a team can’t lose more than its first two draft picks by signing qualified FA’s. That adds to the value you mentioned.
I just learned about QO’s this year. It just seemed like a way to make players less appealing to teams once they hit free agency since their value also includes giving up a first round pick.
But thinking about it, this would force teams to balance out the market of big free agents because they wouldn’t give up a first round pick every offseason it would screw them for the future.
It seems like its worth picking one free agent up if you lose one or more that have declined QO’s. And a lot of free agents will he pursued by clubs that are willing to sign multiple big free agents.
At least a good thing to consider is that:
When a team signs a player who previously declined a QO with another team, will that player maintain enough value to offer a QO at the end of their new contract? If so, that player will then make up for that lost draft pick when they potentially sign elsewhere.
Seems like a decent system to me.
What happens if a person who declined a Q.O. waits until after the draft to sign? Does it affect the next year’s draft, or does it just go away?