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By Jeff Todd | at
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Jeff Todd
Lots of great debate on just this topic in today’s post on Morales/Drew as well as my earlier post, “contextualizing the qualifying offer system.” Thanks to everyone for such a lively discussion – many different perspectives and great ideas.
ztoa
The current compensation attachment limits the ability to get better for teams that fall between 11 and 20 in the draft. The B- free agent was the best route to go. Sandwich picks for a FA that finishes in the top 10 in their respective position statistically. This might be where WAR actually comes into play in the real world of baseball. Of course you have rWAR and fWAR and their cheerleaders respectively.
nepp
Nah, they should use more accurate descriptors like # of AS game appearances and # of Gold Gloves….oh and RBIs.
Ferrariman
WAR isn’t perfect either.
Aaron Johnson
Great work Jeff. Just great work. I too thoroughly enjoy the debate and appreciate your take on the system. I look forward to hearing some of your suggestions to amend/improve the system.
Jeff Todd
Much appreciated, Aaron.
Tim Knobloch
Unlike agent’s opinion, I actually like the qualification system In place. The premium free agents like cano still get paid. The average free agents like Drew get actual market value. Drew Is worth approx 14m per year. Average bat, good defence. He declined, so he has to live with the consequences.if he wants a multi-year deal, he has the right to pursue it. Boras just hasn’t adjusted to the new system and is hurting his clients. In the end, the qualification system encourages owners not to overpay for players. As has been the trend lately. Please debate.
ztoa
Drew is somewhere between Rollins and Escobar Value. His glove is good, UZR/150 12th among SS w/ 750 Innings and 8th in Def stat. Escobar is 3rd in each, and Rollins is in the teens. Offensively they’re very similar except Rollins nabs more bases. I don’t see Drew as a 14.1MM player in any light.
Tim Knobloch
I agree. Sabremetrics aside, he is a product of being on a champ team and wanting all-star money. He is a good defensive SS and an average lefty bat. If any team has a need for this specific skill set, he would have been signed already.
Jeff Todd
Another point of reference: Infante at 4/30. Drew has the injury history, but is younger and plays short.
Tim Knobloch
No doubt that the current qualification system does have an affect on a FA value. But drew thinking that he can get a 5yr/75ml is a reach especially after Peralta was signed for 4/yr 53mil deal with the cards with no draft pick forfeited. Boras needs to adapt his FA philosophy or he will keep losing money for his clients
GameMusic3
There is no way to critique the qualifying offer system without at least one person ignoring everything about parity or cheating small market teams to celebrate Boras’ embarrassment.
Is there not more to evaluating a rule instead of embarrassing Boras?
While a team has to minimize risk in contracts, fans I see tend to think from the team’s perspective. A player is a whole lot more threatened by a bad deal compared to a team run by billionaires. Boras is right. Players prefer security. If you have a choice of multi-year or a single year at a bigger bracket, and are not independently wealthy, which would you take, especially if the qualifying offer requires you to accept constant uncertainty about where you would live and a constantly nomadic family?
discollama
Really? The players are hurt? League average guys can easily make $20m over their careers. I could live off of that for the rest of my days and leave my children in a position to not want the rest of theirs. I’ll not shed any tears for a guy who makes millions playing a game for a living because they can’t judge a market or overvalue themselves and decline a $14m contract for one year of work.
Jeff Todd
See my comment below. I too wish I could have the chance to earn that to play a year of baseball, and won’t feel too bad for anyone who has the luxury of declining. But what if you actually did face that situation? Or what if it were scaled for your circumstances? $14 mil is probably enough to live off of forever, if managed and invested wisely. But $50 mil, for example, creates a much greater level of security and opens many more possibilities (personal, career, family, philanthropic).
I don’t think that these guys should be made out to be victims, but that doesn’t mean we can’t prefer to try to find a way to accomplish things without overly limiting the career options of players who have proven amongst the better in the game through years of hard work and talent.
discollama
Using Drew as an example again, and quoting myself from a post t I just made, Drew averaged a 1.8 fWAR per year since his MLB debut. How on Earth could he realistically expect with his injury history and a lack of need on the SS market that he would get a bigger contract than 3/36? At that point, you should risk the one year deal, take that higher AAV and run with it. In his specific situation, the Red Sox have a few reasons to not extend him another QO at the end of 2014, one is price, the other is the fact that they have Middlebrooks and Boegarts able to handle the left side of the diamond.
If the players want the system to change, then all that needs to happen is the marginal guys like Santana, Drew, Morales, and Cruz just need to start taking their QO’s and letting clubs overpay for them on a one year deal. The way that much of the QO System commentary reads is that it’s a massive case of collusion against the players, and that’s just not the case.
Jeff Todd
Thanks for your comments. The QO system was collectively bargained and agreed to by a player’s association that has a long history of vigorously protecting the rights of its members. I certainly don’t think, and never suggested, that this is a “massive case of collusion against the players.” (See second paragraph, where I wrote this inelegant sentence: “Putting aside the overall balance between league and union, how does the system function within each of those two entities?”)
My point, on the player side, is simple: why should a few guys (the Drews of the world) have to do what you suggest (take a one-year offer or face a difficult market precisely b/c they are not in line for mega-deals), when the system really doesn’t accomplish much of anything? And some other, similarly situated players don’t have that issue b/c they happened to be dealt mid-season?
If the point is for teams to save $ in free agency, then you could just tax all MLB free agents directly rather than using this convoluted system. If the point is for teams to try to curb broader spending increases by preventing bidding wars, then it is not working: whatever the changes do to the markets of a few mid-level free agents, they have left the top end to run wild.
Your suggestion that guys should take the QO is, I think, somewhat misplaced. You never see these types of players taking those kinds of offers on the open market unless they are backed into it after waiting for a longer deal. You can call it an overpay, but it just isn’t, especially because it is made and then withdrawn before free agency opens. There’s a reason that teams would be willing to “overpay” on a one-year deal, and that players are willing to take less AAV for multiple years. Two sides of the same coin: security for player, risk for team. Pretend there is no QO system, and on day 1 of free agency, the Red Sox simply made Drew a take-it-or-leave-it offer of 1/$14.1MM. No way he’d have taken that, even if it wouldn’t have resulted in him being saddled with compensation.
Again, I’m not crying over his situation here, but why have these results when nothing much is accomplished in the aggregate?
discollama
The only change that I think should really be made, is that traded players SHOULD be eligible for QO’s, perhaps for a lesser amount than non-traded players, but something should give there.
walkoffblast
I tend to find this security notion laughable. 14 mil makes you independently wealthy, especially when it is not your first contract. If players only preferred security (in the context of stability) then they could simply take less and get a longer term deal. However, whenever Boras finds an issue it isn’t about such things. It is when they have refused to sacrifice yearly earning for longer term stability. I think a system that only effects the market of players by “dooming” them to earn 30 mil in two years if they play well this season a much better improvement over what the prior system did to players. It does not perfectly benefit all the players but is anything that was collectively bargained supposed to entirely favor the players over management? Choosing a deal to take for a player should be about balancing all these factors, more money now vs more guaranteed, family location, relevant market restrictions on value etc.
C. McCarthy
Yes, they should all be balanced, but this is a new system and there are obvious flaws that need to be addressed. If we’re talking about an attempt to help small and mid-market clubs retain players or benefit from losing them, this is a huge failure. The Royals were able to recoup Santana, but only because the market for him bottomed out. Next year they might not take that risk (as the Pirates did this season with Brunett). Meanwhile, the Yankees landed a comp pick while Baltimore basically wrote off this draft. Who needs to develop via draft more?
It’s also not just about players wanting security, a lot of teams would probably be willing to give Cruz or Drew a 2-year deal at their market rate, but they are teams on the cusp with limited budgets that cannot afford to lose out on draft picks. The system isn’t working in terms of preventing big teams from buying up all the free agents or helping smaller teams retain/restock talent. It needs to be reevaluated so that a guy like Drew could get signed on a reasonable 2-3 year deal in KC without holding them hostage to a juggernaut like the Red Sox over a draft pick.
Jeff Todd
No, something collectively bargained shouldn’t inherently favor labor over ownership. The question here – as I mentioned in the intro the post – relates more to the effects of the rule within labor (differently situated players) and ownership (differently situated teams).
You’re right that players often have to decide whether to accept less overall guaranteed cash for a higher annual deal. Some of those who want the security and stability of the long-term deal, though, they probably feel like turning down a 1-year offer (with a specific club) shouldn’t hamper their long-term market.
I’m not shedding tears for anyone who can make tens of millions to play baseball, but neither am I going to dismiss their valid desire to maximize earnings and set priorities in the way they believe best for them and their families. Where do we draw the line for who we do and don’t care about from a labor perspective? The 1%? Six figure annual salary? I hear a lot of ‘these guys are rich!’ comments, but isn’t that the reward for their skill and hard work? The issue is: given what little the system does to further any useful purposes, why should a few players have to deal with its disproportionate effects?
I tend to think the system could be useful, serve some valid purposes, and not be disproportionately burdensome if reworked.
walkoffblast
I am interested to see the discussion once you propose an actual solution. One of the aspects you allude to at the end of this post (forfeiture not tied to prior action) would seem to actually be worse for players as it would create more of these situations and be completely unavoidable.
One of the reasons I insist on looking at this issue in the scope of the larger CBA picture is that if you do not then it is a little too convenient to be able to blame this concept for other issues that if fixed might make this system better without changing it. Revenue disparity is an issue on its own that merely has a possible effect here. I also believe that a purpose of this rule is being overlooked, allow teams some way to counter the market distortion of guaranteed contracts. Teams for the most part have to take on all the risk of projected performance, the players clearly prefer “stability” but this is practically the only situation where the team has any recourse to pay more for short-term. I just have a hard time looking at the leverage MLB players have and thinking it isn’t already more than what anyone else has in American Sports. This current system doesn’t explicitly restrict those few players ability to get more $tability in the future.
Tim Knobloch
Interesting. Small market teams have the same option of extending QO’s. However, most have preferred to sell off their assets if they do not think they can resign players. As the Rays have.
This isn’t about embarrassing Boras, it’s about him needing to change his philosophy of always testing free agency for his mid-tier players.
And I do not understand how accepting a QO with the same team you played the previous year translates into having a nomadic family. If players are worried about not having to move their family, they need to find a new profession as they can also be traded at any time.
Mikenmn
Nice work. To make a short point, optimally, the goal of the compensation and penalty process should be something akin to a trade of a premier player. The old team gets something for a top tier player, and the signing team pays a premium above the contract price. But I feel strongly that some objective criteria should come into play, beyond the willingness to spend money, or the fickleness of a mid-season trade. A certain number of MVP/Cy Young votes in the previous 2-3 years might be a fair trigger.
GameMusic3
I would trust the Elias rankings over the votes of a bunch of sports press who routinely are wrong.
It should still let a free market determine value, but eliminate binariness.
BlueSkyLA
I’m not sure I understand the assumption that the QO system was created to encourage competitive balance. If MLB really cared about competitive balance, they could solve that problem in a flash by simply deciding to share more revenue. The fact that MLB has studiously avoided doing so tells me that competitive balance is not a priority.
Jeff Todd
I’m not assuming it is, just saying it could be a reasonable goal. You can always use different methods to try to achieve competitive balance (or any other result), but they will all have different effects. Putting more money in the pockets of lower-revenue clubs, rather than creating transactional rules that they can take advantage of through smart and hard work, may not result in better balance, and may have some other consequences.
You might be right that MLB doesn’t care that much about competitive balance, but I’m not sure the lack of more revenue sharing proves that on its own.
BlueSkyLA
I was pointing out only that greater revenue sharing would go directly to the issue of competitive balance, and that the QO method does little if anything in this area (as I think your own analysis strongly suggests). MLB can create any number of transactional rules, but none of them are likely to have any impact on competitive balance. The only way that happens IMO is by giving smaller-market teams better opportunities to participate in the free agent market and to retain key players through arbitration and beyond.
GameMusic3
Great summary of how qualifying offers fail to accomplish anything, on net consideration.
It was not a smart system.
I would try a not so binary offer structure to accomplish the things you suggested.
Compensation could be a budget increase in the draft. For example if you sign expensive players a tax built on the amount of the contact could be transferred to the originating organization. Say if you sign a player to Y dollars, a draft pick of Y/Z value transfers across organizations’ drafts.
Jeff Todd
Thanks. Agree with your general thoughts, and that is just what I’m working to suggest. My thinking is: 1) separate compensation and forfeiture; 2) connect them to draft bonus slots (and maybe also int’l bonus slots/the probable eventual int’l draft bonus slots) by some ratio of total dollars offered/spent to slot money. (To invent an example: for a team signing a FA, a $100MM guarantee costs you $5MM in draft bonus, which might be your 1st and 4th pick.)
BCleveland3381
I think the QO system will begin to work itself out.
Next off season non-star players are going to remember what happened to Drew and Morales this offseason and start taking the QO knowing teams aren’t going to want to give up a draft pick to be able to sign them.
The year after that, teams will realize they don’t want to pay guys like Drew and Morales 14+ mil so they’ll stop offering it to anyone except for the star players it was intended to be offered to.
The year after that, only star players are getting the QO and any average players that are offered it will accept it, and the system works itself out. The QO offer was never meant to be for guys like Drew and Morales. It was meant to compensate smaller market teams for losing star players. No player has ever taken a qualifying offer, which I think will change.
Garett JJ
This phillies fan agrees 100 percent with what this mets fan is saying. It’s rare haha
GoRav114
This has been great stuff on the QO. I think it will work itself out as teams better understand the implications. While we have seen some impact I think overall it is working as intended. Jimenez still got Garza money like he should have. Drew should not have been extended the QO and who knows if he would have struck a deal by now had he not been tied to draft pick compensation when he appears to over value what he is.
The most interesting thing to me is how it will affect mid season trades. Why trade a guy you know you can’t sign for a prospect when u may be able to either retain him with a QO or receive a mid first round pick. Then again u gamble because the pick could be in the 50’s which seems would hold less value then the prospect you could have received. Was that player worth any revenue for his last couple of months? Lots of variables.
Jeff Todd
Thanks. Remember, the pick received is not the same as the one given up – you get a ‘sandwich’ pick even if the team signing a guy gives up their fourth rounder.
discollama
What I don’t get, even with a player like Drew, is why not take the QO? If you take the QO, you’ll make a higher AAV than you would on a 2-3 year deal, and if you play well enough, maybe you get another QO allowing you to make more over 2 years than you might if you had never received one. Or, maybe you play well enough, but the team decides to cut bait because they don’t think that you’re worth the raise that you’d get through the QO system. Now you’re free and unhindered during free agency. Perhaps you’ll sign for a lower AAV on that 2-3 year deal that you were looking for the first time around, but odds are that the $14.1m you made through the QO off sets that by quite a bit.
Jeff Todd
Drew already played a year on a pillow contract, and may have decided it was worth the risk to land a multi-year deal. With Peralta’s PED suspension, Drew might have expected to be the most attractive SS on the market.
Risk of taking the deal is you have a performance decline or injury issue. Ubaldo wouldn’t have gotten 4/50 if he’d hit the market last year. Who knows how things will look next year. And, of course, you’re always a year older.
dirtyjay 4
What if compensation pick was attached to aav. There would be no offer, simply if a player signed a contract with an aav above the 14 mil (or another set average), there is automatically a draft pick comp. This would be including all possible years, options, and incentives and such. This would fix the problem with fringe players, as the could negotiate without worrying about a comp pick unless they really thought they were worth the money. Likewise the players that are truely worth 8 digits a year will still get their money. Also get ride of that a traded player means no comp.
Jeff Todd
Good thoughts. Some of this is what I have in mind to suggest in another post.
hiflyer000
I think the system works fine for the most part, but it is a bit unbalanced and needs to be tweeked. The first thing that needs to be addressed is that the player and signing team both have to give something up, but the team making the QO gives up nothing (beyond a 1 year probably market value deal).
I think that signing teams should not lose any picks, and teams losing the player should still get the compensation pick, maybe even a second later in the draft. This will still reward the teams losing the players while not excessively hurting the players by killing leverage, and the signing teams by not taking away picks and slot money.
I also think that they should make it so players cannot be given a QO in consecutive years, or perhaps attach something like a 35% penalty for each successive QO (ie 14.1 this year, raises to 18 million next year).
Jeff Todd
I actually disagree that the signing team really gives something up, since they can (and surely do) price the pick into their offer. It changes what they give up, though.
westcoastwhitesox
Excellent writing.
Jeff Todd
Thanks very much!
Mikenmn
If you peg compensation to the AAV of the contract, you run a risk on thresholds and may end up distorting the market for that type of player. For argument’s sake, let’s peg AAV at $15M. You might get a cluster of contracts just below $15M, and a cluster of contracts considerably above it. But no one is going to be willing to pay $15M+ the pick. Nor, likely, $16-17M+ the pick. I’m not sure how that impacts the salary structure–most likely it’s a depressive.
Mikenmn
I don’t have a problem compensating a team who loses a high end player, but I’m still concerned about a forfeiture system that severely punishes the signing team. The more draft picks and slot money you take from them, the less likely it is that they can develop their own (cheaper) players and not have to go into the free agent market and bid up prices.