Since we just looked at what teams would stand to receive in draft compensation if they lost a free agent who rejected a qualifying offer, now it’s time to explore what each team would have to give up in order to sign a QO-rejecting free agent.
To recap the mechanics: if a free agent has played the entire 2024 season with a team and he has never received a qualifying offer in the past, he is eligible to be issued a QO within five days of the end of the World Series. The qualifying offer is a one-year deal worth the average of the salaries of the top 125 highest-paid players in the majors, and this winter, the QO is worth $21.05MM. An eligible free agent can simply accept the QO and thus avoid free agency entirely, but if he rejects the QO, his former team is now in line to receive some draft-pick compensation if the free agent signs elsewhere. This only relates to qualified free agents from other teams, as a club can re-sign its own qualified free agents with no penalty.
Here is the (mostly set) rundown of what every team will have to give up if they sign qualified free agent.…
Revenue Sharing Recipients: Diamondbacks, Rockies, Reds, Brewers, Pirates, Marlins, Athletics, Mariners, Tigers, Royals, Twins, Guardians, Orioles, Rays
Should one of these clubs sign a qualified free agent, they will have to give up their third-highest selection in the 2025 draft. Since most of these smaller-market teams are part of the Competitive Balance bonus rounds of the draft, their third-highest pick likely won’t mean their third-round pick, and the situation could be further complicated if any of the teams trade from their CBR picks. The Competitive Balance selections are the only draft picks eligible to be traded, as we saw last winter when the Orioles included their CBR-A pick to the Brewers as part of the Corbin Burnes trade package.
It is relatively rare to see teams from this group splurge on a big-ticket free agent, though Baltimore is expected to increase spending under new owner David Rubenstein. The Tigers also have plenty of payroll space and could look to build more aggressively around their young core, after Detroit unexpectedly made a run to the ALDS this season.
Teams Who Don’t Receive Revenue-Sharing Funds, And Who Didn’t Pay The Competitive Balance Tax: Padres, Cardinals, Nationals, Angels, White Sox, Red Sox
For signing a qualified free agent, these teams would have to surrender their second-highest pick of the 2025 draft, and also $500K from their bonus pool during the next international signing period.
The White Sox and now the Cardinals are both rebuilding. The Padres can never be ruled out of making a splashy signing, but that seems unlikely given how the team has a lot of its own impending free agents to address, plus San Diego made a point of getting under the luxury tax threshold last offseason. Angels owner Arte Moreno has said his club plans to contend in 2025 and the payroll will go up, though that might not manifest itself in the form of signing a qualified free agent, given how often the Halos have been burned on such signings in the past.
Washington and Boston are both borderline candidates for a big free agent signing. The Nats are still technically in rebuild mode themselves, but could decide that the time is right to add some major veteran help to an intriguing mix of younger players. The Red Sox have generally eschewed pursuits of pricey free agents in recent years, though since they haven’t had a winning season since 2021, ownership might be again willing to be more aggressive in shopping at the high end of the market.
Team In Limbo: Blue Jays, Cubs
As noted in the last post, it won’t be known until December (when the luxury tax numbers are officially calculated by the league) whether or not the Jays and Cubs managed to sneak under the $237MM tax threshold. Roster Resource has both teams slightly above the threshold while Cot’s Baseball Contracts has the Cubs slightly over and the Blue Jays slightly under, so given how narrow the margins are, we’ll wait until the league issues its numbers before putting the two clubs in either the previous category or the next category.
Needless to say, both clubs are hoping for a reset on their luxury tax status, and lesser penalties for signing QO-rejecting free agents. The Jays and Cubs are also two of the teams facing the most pressure to win in 2025, and thus could be more open to making a big signing to help turn things around. If MLB’s calculations reveal that Toronto and Chicago did exceed the threshold this year, they’ll join the next group of…
Competitive Balance Tax Payors: Dodgers, Giants, Mets, Phillies, Braves, Astros, Rangers, Yankees
As one would expect, these teams face the stiffest penalties. For signing a QO-rejecting free agent, these clubs would have to give up $1MM in international bonus pool money, as well as two draft picks — their second- and fifth-highest selections in the 2025 draft.
Astros GM Dana Brown has said his team “may have to get a little bit creative” with their spending given how many big contracts are already on the books. The same could be said for the Phillies and Braves as well, but it is also easy to see both teams remaining aggressive after falling short in the playoffs. The Rangers have a lot of money coming off the books but, given their uncertain broadcast revenue situation, could spend but still make a point of ducking back under the luxury tax line. San Francisco will be an intriguing team to watch, now that Buster Posey is running the front office and how the Giants already spent big to keep a pending free agent in the fold by extending Matt Chapman.
Since re-signing Juan Soto or re-signing Teoscar Hernandez wouldn’t cost anything in QO penalties, keeping those sluggers is likely the top priority for the Yankees and Dodgers, with other free agents perhaps as backup plans if Soto or Hernandez signed elsewhere. The Mets were relatively quiet in David Stearns’ first winter as president of baseball operations, some more big spending might be in the works if owner Steve Cohen wants to build on the club’s playoff run.
All this being said, the higher penalties for CBT payors can be deterrents to spending on qualified free agents in particular. This doesn’t mean the Yankees wouldn’t look to retain Soto or anything, but teams might prefer to make their big upgrades through trades, or perhaps with free agents who won’t have a QO attached to their services.
Should a club sign more than one qualified free agent, they will have to additionally forfeit their next-highest draft pick. For signing two QO-rejecting free agents, the revenue-sharing group would have to give up their third- and fourth-highest picks in the 2024 draft. The teams who didn’t exceed the CBT or receive revenue-sharing funds would have to give up their second- and third-highest picks, as well as $500K more of their international bonus pool. The luxury tax payors would face the heftier penalty of losing four draft picks — their second, third, fifth, and sixth-highest selections.
You shouldn’t be penalized if you sign a qualifying offer player if you lost one. It would be beneficial to the players as more teams would be willing to sign them.
The penalties are there to keep competitive balance. Removing the QO completely and having them all become full free agents would be best for the players, initially. When every small and mid market fails to compete, and interest nationwide declines, then it will become less beneficial to the players, as not all of them can play for the big market teams.
I’m sure tv viewership will be down if the Yankees and Dodgers are in the World Series. *end sarcasm
This doesn’t help smaller market teams at all. It hurts the player receiving the qualifying offer. If the bigger market teams lose draft picks and International signing money then they will just spend more money to make up for it.
Yeah, that’s the thing. The Yankees and Dodgers aren’t really impacted by the penalties, since they can just spend to get whatever players they need. The Dodgers will sign Max Fried over the winter, which will be a boon to their starting rotation, and they won’t miss the lost draft picks. On the other hand, the penalties really hurt mid- and smaller-market teams who are doing what everyone says they want — spending more to be more competitive. Kim would be an upgrade at shortstop for the Braves, but if he receives a QO, they can’t sign him because they can’t afford to lose the draft picks or the international money. We’ve almost reached the point where the big-market teams are benefitting the most from the QO system, because they can use the system to keep next-tier teams from signing away their players.
Agreed. Signing one should nullify losing one and vice versa. Would make things simpler for everyone.
I also agree but I’m still trying to understand how the Orioles are in the group that gets revenue sharing. They’re in the same market as the Nationals and much of their situations are self induced. That also should be changed otherwise John Henry will soon be putting his hand out.
If you’ve ever seen the price differential in homes and salaries in the DC metro v. Baltimore metro you wouldn’t think the Nats are in the same market.
In terms of tv markets, however, it doesn’t matter. They are identical, since both are on MASN-which the Orioles overwhelmingly control.
$300 million payroll. There has to be deterrents to endless spending. We are in good hands, metsin4.
It’s not endless spending if a player leaves for more money somewhere else.
It’s still hard to believe the Mariners are revenue sharing recipients. as they’re one of the most profitable teams in baseball.
Talk about a system that needs adjusting.
Stanton has to line his pockets…
Hey at least he might be willing to pay for our arbitration players, even though there will probably be no more funds after that
This reminds me….
We’ve always been told that all profits are put back into the organization. But it’s been years since we’ve (well, me anyway) heard that from ownership themselves.
I really wonder if that’s still the case and how they manipulate that if they claim they are.
I don’t believe for a second that they aren’t somehow immediately benefiting beyond organization value.
Wow! St. Evil must be a Mariners executive, and we are privileged to have him on this site. How else would he know the private books of MLB franchises, and not only tell us that the Mariners made a profit, but one of the largest in the entire sport? I’m sure by his assertion that he’s not just speculating, or relying on speculation from someone with no actual access to the real data. It’s nice to know that the Mariners are committed to being a non profit, and refuse to act like a normal business, making money and such. For those of us with only access to the public records of the Atlanta Braves to go by, we thank you!
I can’t tell if you are being sarcastic or not it just seems like you felt like picking a fight today
I do that too especially with politics and inflation because I can’t help myself
You “can’t tell if he was being sarcastic” ??? Really ?
Not being sarcastic. Stanton has lied through his teeth. It’s just a question of how much he’s profiting off the fans he duped.
Never mind the possessive there. Trying to type while walking and chewing gum
Not about the topic, about stymee randomly being pissed
54%
~Mariners Front Office
The QO offer penalties seems great on paper for MLB until you realize the teams with lesser penalties aren’t spending the money on a free agent anyway. So it’s just a way to penalize the only teams actively trying to put the best team they can on the field.
Aka the teams with huge revenues spending the most money. That’s why it’s necessary.
Every player should accept the QO until they stop offering them. It’s the only way to change this nonsense.
Why would a player who thinks he’s going to make more money accept the QO?
Imagine Soto accepting a QO for $20M when he could get over $300M, with an AAV of over $30M, on the open market?
He’s 99% more likely to get 10/600 than 10/300
Tiger: Do you know what “over” is? For example, 600 is “over” 300.
Most players who reject the QO end up settling for less than they thought they were gonna get. There are some exceptions, but those exceptions are the superstars who get 10 year/zillion dollar contracts regardless of whether they’re attached to a QO or not.
Jarred:
“less than they thought they were gonna get”
The vast majority who reject the QO do much better in overall value than accepting. Especially when you factor in the value that the long term security brings.
What they “thought” is irrelevant:
The guy that thought he’d get $120M and only got $90M, is still doing worlds better than the QO.
How would that solve the problem.
@RD19: Never underestimate the value of education!!!
It may be too late for him.
Five of the revenue sharing teams should NOT be receiving money. The Tigers, Mariners, Orioles, Diamondbacks and Rockies do not play in small markets. They are at worst in mid sized markets and don’t need revenue sharing.
It wouldn’t surprise me in the least if the Jays went over. The FO just doesn’t seem to understand baseballing.