Executives On The Qualifying Offer

The 2014 season is about to get underway in earnest and two of MLBTR's Top 50 free agents remain on the shelf.  Stephen Drew (No. 14) and Kendrys Morales (No. 28) are still looking for homes months after rejecting one-year, $14.1MM qualifying offers from their respective teams.  The qualifying offer system, now in its second year, appears to be getting quite a bit of criticism from agents and players around baseball, but that's nothing new.  Last winter, I asked Adam LaRoche for his thoughts on being linked to a compensatory pick and having to wait until after the holidays to sign.

"I think that it did [affect me]," said LaRoche, who inked a two-year, $24MM deal with a mutual option with the Nationals rather than the three year pact he wanted. "That's coming from people a lot smarter than I am that explained it to me. I think it affected a couple of other players worse than me, there are a lot of solid ballplayers out there still looking for a job.  It definitely hindered some teams from going after some guys…I think there were two or three, maybe four teams out there that it did affect as far as teams that were interested me but didn't want to give up that pick."

As you might expect, after conversations with high-level MLB executives, it seems that front offices are short on empathy for the predicament of the Scott Boras duo.  Executives recognize that the qualifying offer system favors clubs, but at the end of the day, they feel players and agents are responsible for anticipating demand appropriately before making their decision.

"It's certainly advantageous to the clubs, so I can understand why certain players wouldn't like it," said one National League executive.  "No one is forcing them to reject a one-year, $14MM offer which is pretty darn good and see if they can do better.  Honestly, that's just their reading of the marketplace telling them what to do and if it doesn't go the way they anticipated then they just misread the marketplace."

That might be a reasonable view for some, but Boras vehemently disagrees, recently telling ESPN's Jerry Crasnick that he feels as though Morales and Drew are "in jail" rather than true free agents.  From Boras' view, the system is having an unforeseen ill effect on the free agency process.  From the club's view, everything is going as planned.

"People keep talking about unintended consequences with the new system and I don't think they're unintended at all," one American League exec opined.  "I don't understand why anyone went into the current system thinking there weren't going to be lags in the market or thinking that teams wouldn't give second thought to [second tier] free agents."

The AL exec and others were quick to note that the qualifying offer system has not hampered the true cream of the free agent crop.  When the Mariners wanted to sign Robinson Cano, for example, their main deliberation was over cost and not the compensatory draft pick they would have to forfeit to the Yankees.  While Cano, an elite player at a premium position who was universally considered the top free agent prize of the winter, didn't have to give any thought to accepting the QO, executives argue that someone like Morales should have thought it over.  While Morales is an offensively gifted switch-hitter, his possibilities were limited since his appeal is mostly as a DH.  Teams would argue that this was all obvious in November and perhaps should have informed Morales and Boras to make a different choice.  

Of course, the current qualifying offer system is only a couple of years old but the concept of a restricted MLB free agency has been around for much longer.  The current QO construct replaced the widely reviled "Type A/B" system, which placed the better free agents in one of two tiers based on seemingly arbitrary criteria.  A team losing a Type A player would receive the signing club's top pick plus a newly-generated supplemental pick in the sandwich round (between rounds 1 and 2).  A team losing a Type B player would get a sandwich pick, but nothing from the club signing the player.  Agents and players were vocal about their frustrations with that system and executives that spoke with MLBTR expressed similar thoughts.  One executive called the formulas used to determine Type A or B (or C, pre-2006/07 offseason) status "antiquated" while another said that the system was "wrought with abuse and handshake offers" to circumvent its consequences.  While teams got used to that process over time, executives seem to appreciate the simplicity of the new system.  And as one high-ranking executive told MLBTR, the new system helps to "protect the middle reliever."  The old system would routinely lump a solid, but not spectacular reliever in the same group as an elite batter or starting pitcher, making free agency a frustrating process.  Now, under the current system, no team in their right mind would put a $14MM+ offer on the table for a seventh-inning reliever.

As Drew continues to look for a home, it has been reported that he would take a one-year deal from the Tigers in the neighborhood of the $14.1MM figure that he turned down just months ago.  While plugging Drew in for injured shortstop Jose Iglesias has to have some appeal to Detroit, the idea of sacrificing a pick for a one-year rental is surely unpalatable.  The execs who spoke with MLBTR said that they would be very unlikely to sign a QO free agent if they were only getting one year out of him, but each of them also conceded that they would consider it under the right circumstances.  If their club was right on the cusp of contending and losing a pick – projected to be towards the bottom anyway – made the difference, they would give serious thought to pulling the trigger.  This winter, Ervin Santana and Nelson Cruz both wound up signing one-year deals while attached to draft compensation, so those execs surely aren't alone in that thinking.  Meanwhile, all of the executives said that they would not rule out a player strictly because he was tied to draft compensation.  

After watching Ubaldo Jimenez, Santana, Cruz, Morales, and Drew struggle to find homes for 2014, some have assumed that the QO system will be drastically overhauled in the 2016 Collective Bargaining Agreement.  While it's bound to be a high-priority discussion for the union, executives caution that it's far from an automatic to be changed.  

"I don't know if it will be changed, but I think if they want it changed, they'll have to give something substantial back," the AL exec said.  "Now, whether that's something like an extra year of arbitration, I'm just not sure.  I don't think the owners would just give it back to the players, it's something that [the owners] bargained and negotiated for."


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