Rosenthal On Compensation Free Agents

The three remaining free agents tied to draft-pick compensation — Ervin Santana, Stephen Drew, and Kendrys Morales — would all considering 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."


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85 Comments on "Rosenthal On Compensation Free Agents"


cardinalmike
1 year 6 months ago

Boras is a crybaby. Stephen Drew would be signed today if his agent would accept a reasonable deal. It is greed, not the draft pick compensation, at work here and Boras knows it.

robbyb
1 year 6 months ago

especially since Mets first rounder is protected.. They would give up second rounder to have his defense on the field for the young pitchers…

Joanie Yan
1 year 6 months ago

Actually it would be a third round pick – they already gave up their second round pick for Granderson.

Bradley Maravalli
1 year 6 months ago

Jeepers. Boras is just being a troll then.

robbyb
1 year 6 months ago

third.. makes even more sense..

LooksEasyOnTV
1 year 6 months ago

Boras’s client (Drew) would be the one that is “greedy” in this scenario–the player is the only party that can “accept [or decline]” an offer. Boras is the agent and offers strategy, advice, and opinions (among other things). Boras has to present EVERY offer that comes in–the player is the one that ultimately decides what to do with that offer.

toddcoffeytime
1 year 6 months ago

A reasonable deal would be something like 3-4 years at 10-12 mil AAV based on his past performance, and its highly unlikely he’s been offered that. Its not fair for Drew to have take a pay cut because he was valuable/talented enough to receive a qualifying offer, which is worth well below his value on the open market.

kcmark
1 year 6 months ago

3-4 years at 10-12 mil AAV reasonable. If Drew get an offer like that he should tear his hamstring running to the table to sign the contract.

Derpy
1 year 6 months ago

I believe the rumors were the Mets offering him 3 years, 30 million, and Drew demanded an opt out after the first year. The Mets then stepped out of the discussion and haven’t talked to Drew since.

dmm1047
1 year 6 months ago

The union, players and agents blame the system instead of themselves. No way in hell Drew is worth anything close to the $14M QO he was offered. Talk of any contract for him containing an “opt out” clause is totally ludicrous. If the owners tried that, the union would be in an uproar. If Drew is so good, and he’s not, why is he sitting at home with his feet up.

baycommuter
1 year 6 months ago

I think the agents are posturing here. It could possibly make sense for Santana, but the other two aren’t going to get that much by waiting.

michael T
1 year 6 months ago

Pitchers will get less if they wait until June. It will take them a month to get into game shape. Makes sense to sign now while their is a market for the player. The Orioles would have been glad to sign both Morales and Santana but they declined so they went to Jiminez and Cruz. The longer they wait the less they will get.

Israel Piedra
1 year 6 months ago

It will be too bad if this process results in damaging the integrity of the game by having stars voluntarily sitting out half a season. I’m not sure what the solution is though.

NOLASoxFan
1 year 6 months ago

I think the whole problem is that these guys aren’t stars. If they were, teams wouldn’t care about losing a draft pick.

Melvin McMurf
1 year 6 months ago

none of the remaining 3 are worth 14 mil a year, let alone a 1st round pick

Chris Schauble
1 year 6 months ago

Santana is by no means a front line starter on a contending team.

ChipsHips
1 year 6 months ago

I rarely comment on this site, but something about the name ‘Bean Stringfellow’ just makes me want to keep typing it over and over again.

sourbob
1 year 6 months ago

I’m really tired of hearing that the draft pick compensation system is broken. In each and every one of these cases, a player who was plainly not worth $14.1 million per season, turned down a guaranteed contract in that amount. Maybe the problem is players with crazy expectations.

pft2
1 year 6 months ago

If a player was not worth 14.1 million why were they offered the deal? Especially when you consider that by accepting it the team loses a compensation pick. Answer is they are worth 14.1 million and even more than that on a multi-year deal, but the penalty on teams who sign them reduces their market value.

Players are giving up 6 years of playing for market value under the free agent system only to have to pay a huge tax for their freedom to enter the free market. Thats UnAmerican

Jason
1 year 6 months ago

I really wouldn’t say any of of the current remaining free agents are necessarily going to be worth 14.1+ MM in a year. Just because they were offered a QO doesn’t mean they were worth it. The teams just simply anticipated that they’d be turned down since players are looking for more.

johnsilver
1 year 6 months ago

With any prior Boras client it seems? Offer arbitration, or now a QO and it was an automatic draft pick. His ego would kick in and deliver the goods.

Croagnut
1 year 6 months ago

Agree with John, Boras much too predictable. He likes to decline too much. The Boras name isn’t in the papers if he’s accepting QOs in early Nov.

Tom
1 year 6 months ago

I think it more so has to do Steven Drew could probably easily get 2 or 3 years at 8-10 mil a year, I’d argue he’s worth that, but the Qualifying offer system clearly does hurt mid level free agents not in regards to yearly salary, but in the often coveted guaranteed mutli year contract that all MLB players cherish greatly. Drew should’ve accepted the QO, but baseball players hate playing year to year, so I understand how they may dislike the QO system. The old system was generally okay, but flawed in regards to Relievers, which I believe was why it was changed. I highly doubt people like Drew, Santana, and Morales would’ve been Type A free agents.

Basebal Rules!
1 year 6 months ago

I had asked this question recently, as I couldn’t find the details on whether the new Q.O. rule allows the player to sign post-draft without draft pick compensation.

Your point about the former system’s Type A & B is relevant and now we know the strategy to counter is waiting post-draft. After some thought, I think it’s somewhat fair, as there must be a penalty for avoiding the loss of a draft pick.

Alternatively, is it practical to go back to the A/B tier system, but keep the Q.O. for Type A? Perhaps Type B would involve the loss of a lower round pick, like a 4th.

The 2 strategies outlined by Mr. Todd also include signing on or close to Opening Day. Sounds like that won’t eliminate the comp pick this year, but it does the next offseason.

Therefore, I wonder if Cruz should have done that. Obviously, there’s an element of risk, as the teams want the lineup set ASAP and certainly before Opening Day.

Tom
1 year 6 months ago

I think it more so has to do Steven Drew could probably easily get 2 or 3 years at 8-10 mil a year, I’d argue he’s worth that, but the Qualifying offer system clearly does hurt mid level free agents not in regards to yearly salary, but in the often coveted guaranteed mutli year contract that all MLB players cherish greatly. Drew should’ve accepted the QO, but baseball players hate playing year to year, so I understand how they may dislike the QO system. The old system was generally okay, but flawed in regards to Relievers, which I believe was why it was changed. I highly doubt people like Drew, Santana, and Morales would’ve been Type A free agents.

Kitty Cat Puppy Paws
1 year 6 months ago

All these other players are sneaking their way into free agency and taking their jobs.

kcmark
1 year 6 months ago

How is this UnAmerican? The players negotiated this deal through collective bargaining. Nobody forced them to accept this. Perhaps its simply karma and a way to adjust salaries back down that were artificially inflated along with stats in the PED era.

Lance Pistachio
1 year 6 months ago

How were salaries artificially inflated in the PED era? When baseball revenue skyrocketed, so did player salaries. Which is how it should be. Any union in this country would of negotiated to get the employees a fair piece of the pie, as the MLBPA did.

jb226
1 year 6 months ago

Overall I agree. The system is not broken. The players who are hurt by this are the ones who are only marginally worth their QOs. Those who are clearly worth them get their mega-deals anyway, and those who aren’t worth an offer aren’t saddled with one.

That said it can probably be tweaked a bit. I’ve said before that I think an easy step #1 is to make it impossible to offer a QO two years in a row. That makes it more attractive for a player to accept, in turn reducing teams’ willingness to offer. I’m beginning to wonder about whether or not it would be valuable to have a requirement that a player be with a team more than a year as well. I think an argument could be made that none of the teams deserve compensation in these circumstances.

Meh Sheep
1 year 6 months ago

Another option is to do like the NFL does with franchise tags where there is an escalator for subsequent uses of the franchise tags. Perhaps year one is 14.1 or whatever the year’s formula comes to and then start doing formula + 25% (year 2), formula +50% (year 3), formula + 75% (year 4), formula +100% (year 5). How many teams would be throwing out a 28.2 million QO unless it was a true premium free agent and even then those players would surely get a multi-year deal or take the QO.

The_Painter
1 year 6 months ago

This has probably been asked already, but I’m gonna go ahead and ask anyway. Cant some team sign them to a minor league deal with 14mil upon making the team, and just wait until after the draft to call them up?

The_Painter
1 year 6 months ago

I know its the same as just waiting until after the draft, I just meant to keep them fresh and have them constantly facing live hitters in the minors.

Guest
1 year 6 months ago

They can, although it would not solve the draft compensation issue–would still require compensation to sign and would be able to be offered a qualifying offer after the season (unless traded).

Lefty_Orioles_Fan
Lefty_Orioles_Fan
1 year 6 months ago

Do they just want to play or do they want to get paid?
I mean, look at Roy Oswalt when he finally joined the Rangers.
He never really got into a rhythm that season or ever again for that matter.
To me missing Spring Training is a ‘Big Deal’
I would rather just play, then rather sit around till June and then hope to hook up with a team! At least that’s how I feel about it!

Croagnut
1 year 6 months ago

Agree: What an FA gains by losing the comp attached to his name, he’ll partially lose because team will know first month will be lost getting timing back and rid of any other rust.

pft2
1 year 6 months ago

“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.”

Wow, that’s Orwellian. Now the compensation pick and QO enhances a players value?

PittsburghPirates0022
1 year 6 months ago

Mets offered Drew a one year 9.5 million dollar contract that was REJECTED.

Riaaaaaa
1 year 6 months ago

He also got a multi year offer from the Yankees, but he rejected that also. I really don’t understand what Boras is thinking.

pft2
1 year 6 months ago

Don’t blame him coming of a 3.4 WAR year and only 31

Riaaaaaa
1 year 6 months ago

He had a 3.1 WAR

toddcoffeytime
1 year 6 months ago

Well you sure straightened him out! Obviously kidding but you’re probably citing Baseball reference WAR as opposed to Fangraphs war or vice versa.

Dan
1 year 6 months ago

I expect what will happen is that these free agents who are borderline on deserving the QO in the first place will realize how much draft pick compensation hurts their signing chances, so they will start accepting the QO when it is offered. In some cases, the team only offered it in the first place not because they want the player back, but because they wanted the draft pick. If those teams start getting stuck with the players they don’t really want, they’ll probably stop giving QOs to those borderline guys.

In essence, I see this as a problem that will largely work itself out in a year or two.

Mike1L
1 year 6 months ago

Interesting balance of risk and reward. If the player waits until June he’s free of the compensation issue, but runs the risk that a) he gets hurt while trying the keep in shape, b) isn’t game ready in June and so hurts his performance (and, on a short term deal, perhaps his future contract value) and c) won’t find a better deal then. The number of teams who definitely need a Drew, Santana, or Morales is limited. While an injury could create a need, it’s also possible that the same teams that might be interested in those three, given a couple of months to find other options, may see less expensive alternatives.
Boras’s logic is sound, but his math may be off. Drew and Morales aren’t necessarily in the top 6/12% of all free agents, unless you start digging into the group. Top 6% of 50 would be third best, top 12% sixth best.

Ron Loreski
1 year 6 months ago

If all of these players wait until June to sign, it just proves the greed of todays players. The system is disgusting and its getting hard to root for any of these players.

toddcoffeytime
1 year 6 months ago

As opposed to rooting for the MLB teams, some of which are valued at over a billion dollars and receive all sorts of unnecessary public funding for stadiums, antitrust expemption, etc? You may want to reexamine who you call “greedy”

Eugene in Oregon
1 year 6 months ago

Too late for this now, but in the future all it should take for teams to reconsider their QO strategy would be for a player or two to accept the offer — something that has not yet happened, if I’m not mistaken. Teams are, I believe, making QOs to a few marginal players (e.g., Morales, Cruz) who they hope won’t accept or, at least, are agnostic on. If a Morales-type player (or two) were to accept the offers next off-season, I’m convinced that in the next season you’d see the number of QOs fall by at least a third.

Federal League
1 year 6 months ago

They need to push for the elimination of qualifying offers when the current CBA expires.

Free agency should mean free agency. Players already have to wait 6 seasons [really it’s 7 with how common service time manipulation is], plus however long they were in the minors, before hitting free agency.

The players need to start looking more closely at some of the things their union keeps signing off on.

Sky14
1 year 6 months ago

Agreed. This system only benefits the owners. Either they get a long term asset with a first round draft pick or they get a short term asset with no long term risk. The players, generally after six years of being undervalued, get stung along on what is essentially a one year mutual option with no long term job security or they get a tag that punishes teams that sign them thus lowering their value. Its essentially a heads I win, tails you lose thing. Not to mention it does very little for competitive balance.

kcmark
1 year 6 months ago

For every player you can cite as “under-valued” prior to Free Agency, I bet I can cite 3 or 4 that are over-valued. While a union benefits in some ways, it hinders in others because service time factors in. In a pure free agent market, talent and not service time should be determining factor for player compensation.

northsfbay
1 year 6 months ago

The Small Market owners have to agree to a contract. If they can’t agree on a new contract, they have to play under the current contract, go on strike or get locked out.

kcmark
1 year 6 months ago

The owners would gladly give the players free agency a year earlier if the players are willing to give back 2 years of arbitration.

Federal League
1 year 6 months ago

I don’t see why the players should give up any additional arbitration at all or any evidence that the owners would “gladly” do anything of the sort.

If players reached free agency a year earlier, they would by default be giving up a year of arbitration.

michael T
1 year 6 months ago

I think the solution for the players is to get a new agent. They have been given bad advice all along and now they are getting more bad advice. It is the salary demands and contract length keeping the players from getting signed not the draft picks. Waiting until late June is comically bad decision. Santana could have gotten a 3 year deal worth 12 million a year. Morales a 2 year at 10 million a season.

Basebal Rules!
1 year 6 months ago

Here’s an example of what might be part of the problem. Take Morales (30), who has averaged 20 HRs in close-to-neutral home parks, and is a switch hitter. The downside would be his low OBP, and one-dimensional profile.

The market gave Cuban defector 1B Abreu (26) 6 years/$68M. No draft pick penalty.

Although Morales is older, Abreu has yet to perform in mlb. If Morales’ market price is 2 X $20 as you suggested, that is too a wide disparity.

A player such as Moralas has put in his time, and this scenario is simply not fair. I’m not sure if it’s possible, but the international FAs might need to have draft pick compensation attached to them as well. Otherwise, the revolt is coming and it could get ugly.

Basebal Rules!
1 year 6 months ago

Here’s an example of what might be part of the problem. Take Morales (30), who has averaged 20 HRs in close-to-neutral home parks, and is a switch hitter. The downside would be his low OBP, and one-dimensional profile.

The market gave Cuban defector 1B Abreu (26) 6 years/$68M. No draft pick penalty.

Although Morales is older, Abreu has yet to perform in mlb. If Morales’ market price is 2 X $20 as you suggested, that is too a wide disparity.

A player such as Moralas has put in his time, and this scenario is simply not fair. I’m not sure if it’s possible, but the international FAs might need to have draft pick compensation attached to them as well. Otherwise, the revolt is coming and it could get ugly.

kcmark
1 year 6 months ago

Why should Santana have gotten a 3 year deal at 12 mil per? Last season the Angels gave him away. Santana should have accepted the QO and said thank you very much.

kcmark
1 year 6 months ago

What is happening here is a shift to a post-PED era. When you look at all of the young talent coming up from the minor leagues (and most of it with the small market teams) the owners now understand the value of draft picks. They days of players at their peak at age 35 and 36 are gone. Why do you think the large market owners pushed for a cap on draft pick compensation. Because the small market teams were investing their money there (buying wholesale) instead of investing in declining free agents (paying retail).

PXDX
1 year 6 months ago

I feel like Nelson Cruz’s career Home/Road splits (911 OPS in Texas, 734 OPS everywhere else) are not being mentioned enough. He really is not a good ballplayer, period.

PXDX
1 year 6 months ago

I feel like Nelson Cruz’s career Home/Road splits (911 OPS in Texas, 734 OPS everywhere else) are not being mentioned enough. He really is not a good ballplayer, period.