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.