Forecasting The Free Agent Qualifying Offer Market

With six weeks of regular season and the entire postseason still to come, there’s obviously a lot of time for this winter’s free agents to improve (or, unfortunately, lower) their stock in the open market.  There’s also the fact that the qualifying offer as we know it could be altered if the league and the players’ union come to terms on a new Collective Bargaining Agreement within the next month or so, as several players and agents have voiced concerns about how the current QO system can adversely impact a free agent’s market. (Though even if that occurs, it may not come into effect for the coming offseason.)

But hey, it’s never too early for some speculation, right?  Last offseason saw a record 20 players receive qualifying offers, and for the first time, some of them (Colby Rasmus, Brett Anderson, Matt Wieters) accepted the one-year contracts rather than hit free agency.  Anderson and Wieters were hoping to have healthier seasons in 2016 that would lead to richer multi-year deals this offseason, while Rasmus simply seemed to want to stay in Houston because he so enjoyed the environment, particularly in the wake of some clubhouse issues with other teams in his career.  With teams and players both seemingly becoming more comfortable with the QO, it will undoubtedly once again play a big factor in several free agent cases this year.

A quick recap: the qualifying offer is a one-year contract (this year expected to be worth $16.7MM) that a team can offer to any of its own free agents.  The QO must be issued within five days of the conclusion of the World Series, and if the player accepts, he remains with the team.  If he rejects it and ends up signing elsewhere, the team will get compensation in the form of a bonus draft pick after the first round.  The team signing the QO free agent will have to surrender a first-round draft pick (or a second-rounder, if the team owns protected a top-10 draft selection), and teams who sign multiple QO free agents will have to give up their top pick in a later round.  For instance, the Tigers held the #9 overall pick in the 2016 draft, so when they signed Jordan Zimmermann and Justin Upton last offseason, they kept their first-rounder and surrendered their second- and third-round choices. Teams re-signing players who declined qualifying offers lose the chance to add that compensatory selection.

Since a qualifying offer can only be issued to a player who has been on a team’s roster for an entire season, several pending free agents who were moved at the trade deadline won’t have to worry about draft pick compensation hanging over their markets.  This applies to such notable names as Aroldis Chapman, Carlos Beltran, Josh Reddick, Mark Melancon, Rich Hill and Steve Pearce, all of whom would’ve ranged from locks to decent bets to receive qualifying offers.

It’s not impossible that one of the remaining names cited is also traded, though it’s pretty unlikely given that most of them are playing for pennant contenders and those who aren’t would likely be blocked during the August trade waiver process.  So with this in mind, let’s look at who could be weighing a one-year, $16.7MM contract after the season…

The Easy Calls

Yoenis Cespedes, Ian Desmond, Edwin Encarnacion, Dexter Fowler, Kenley Jansen, Scott Kazmir, Wilson Ramos, Michael Saunders, Mark Trumbo, Justin Turner, Neil Walker

Barring a major injury or something unexpected over the last two months, all of these players are more or less no-brainers to receive (and reject) qualifying offers in search of multi-year deals.  Cespedes and Kazmir would have to exercise their opt-out clauses to hit free agency, while Fowler has a mutual option, and all three seem likely to hit the open market. The most questionable of the bunch are Saunders and Trumbo, who have both been ice-cold at the plate since the All-Star break.  Since these two don’t have quite the track records of the other players in the group, if these extended slumps for Saunders/Trumbo turn into full-on second-half fades, the Blue Jays and Orioles could each respectively have some qualms about making either player a qualifying offer.

Kazmir may not seem like as much of a slam-dunk as the others, though his peripherals (9.31 K/9, 2.87 K/9 rate) and ERA predictors (4.35 FIP, 3.98 xFIP, 3.94 SIERA) imply a more solid performance than his 4.44 ERA over 127 2/3 IP may indicate.  Of course, he has also had late-season struggles in each of the last two years.  The way Kazmir’s contract with the Dodgers is structured, however, it seems like the club is fully planning to issue the lefty a QO.  If he fades down the stretch again, Kazmir may not opt out of his deal at all, so the QO is a moot point.  If Kazmir opts out, it will be because he’s pitched well enough to believe he can top the two years/$32MM he’s owed through through 2018 under his current deal, so naturally the Dodgers would feel comfortable tagging him with a QO (which he’ll no doubt weigh in deciding whether to opt out).

Unique Cases

Jose Bautista, Jeremy Hellickson

Bautista is on the DL due to a knee sprain, he missed another month of the season due to a sprained toe, and he is hitting just .222/.349/.444 with 15 homers over 355 plate appearances.  Needless to say, his preseason hopes at a deal in the range of four years/$120MM or perhaps even more than five years and $150MM have been dashed.  It will take a big September (and, possibly, postseason) for Bautista just to rebuild his market to the $50MM neighborhood, since teams won’t be rushing in with big guarantees for a slugger coming off an injury-filled down year in his age-35 season.

Despite the disappointing campaign, Toronto will surely still issue Bautista a qualifying offer on track record alone.  The question now is, could Bautista actually accept?  A case could be made that the slugger could take the QO and then hope for a healthy return to form next season so as to better position himself for free agency.  Bautista has been candid about looking for fair market value in his next contract after he greatly outperformed his last extension with the Jays, so if he’s only facing two-year/$30MM or three-year/$45MM offers in the wake of his lackluster 2016, he may see that as settling (since obviously Bautista expects to rebound next season).  With a big 2017, however, Bautista could possibly still land a three-year deal in the $60MM-$75MM range even though he’ll be 37 on Opening Day 2018.  It would be pretty stunning to see Bautista actually accept a qualifying offer, though remember, last winter we all thought there was no way a Scott Boras client would accept a QO until Wieters make his surprise decision.

Despite healthy interest from other teams, Hellickson was rather surprisingly still a Phillie after the August 1 trade deadline passed.  That could be because the Phillies put a high price tag on his services, though it could also be a sign of how teams value Hellickson — despite his strong 2016 season, he put up some rough numbers from 2013-15 and even his early-career success with the Rays was buoyed by outperforming his peripheral statistics.  If teams weren’t willing to give up a high price for Hellickson at the deadline, would they really be willing to give up a high draft pick for him this winter?

With this in mind, there’s a chance Hellickson could accept when the Phillies take the very likely step of issuing him the QO.  A $16.7MM payday would more double his career earnings, and two good seasons would put him in line for a very lucrative deal in the 2017-18 offseason (and if the rebuilding Phillies trade him at next year’s deadline, that removes the qualifying offer from the equation).  Based upon what we know now, though, I would guess that Hellickson is a better bet to reject the QO since the free agent pitching market is so terribly thin.  In a normal year, Hellickson might run the risk of emulating Kyle Lohse and Yovani Gallardo as pitchers who had to wait a long time in free agency or take less-than-expected offers due to the qualifying offer impacting their markets.  This winter, the list of available starters is so short that Hellickson might be the best arm on the market.

TBD

Doug Fister, Brandon Moss, Mike Napoli, Martin Prado

These four veterans are having good seasons, though their QO fate may hinge on how they hold up until the end of the year.  After a rough April, Fister has quietly enjoyed a good rebound year in Houston, even if the advanced metrics aren’t fans of his performance.  The Astros may not want to risk paying $16.7MM to Fister when they have other young rotation arms in the fold and they could find another innings-eating veteran at a lesser price, and Houston may be more cautious about issuing qualifying offers this winter in the wake of Rasmus’ acceptance and subsequent disappointing 2016 season.  Like Hellickson, though, Fister could benefit from the thin pitching market and take the leap of faith in rejecting a QO in the hopes of finding a richer multi-year deal.

The 33-year-old Moss is set to hit free agency for the first time, and he’ll surely be looking to capitalize on what could be his only shot at a lucrative multi-year contract.  So, while $16.7MM is probably more than St. Louis would ideally like to pay Moss next year, the Cardinals can be reasonably confident he would reject the qualifying offer in search of that big deal.  (It’s also possible that contract could come from the Cards anyway, as they’re interested in re-signing Moss.)

Napoli is another first baseman who is back to his old slugging ways after a down year in 2015, though while he could also end up back with his current team, I question the chances of the Indians issuing him a qualifying offer given their payroll limitations.  A $16.7MM salary would make Napoli by far Cleveland’s highest-paid player in 2017, and there’s certainly a chance he could accept that deal rather than look for a multi-year pact elsewhere given Napoli’s history of accepting smaller offers to remain in comfortable, winning environments.  It’s worth noting that while Napoli rejected a QO back in the 2013-14 offseason, he could see it as more of a limiting factor on his market now given that he turns 35 in October.  I wouldn’t be surprised to see the Tribe issue a QO just to keep their bases covered and for Napoli to reject it, only for the two sides to agree to a two-year contract just as Napoli did with Boston three years ago.

Payroll could also be a factor in Prado’s case, as while the Marlins love his veteran leadership (and, of course, his solid production), they might not want to risk paying him quite so much, even on a one-year deal.  There’s also the fact that Miami has Derek Dietrich waiting in the wings to replace Prado at third base, though that succession plan may no longer be quite as set-in-stone given how Dietrich has cooled off following a tremendous opening two months.  The Marlins may feel Prado is worth the risk, and of course, there’s also a good chance he turns the QO down — even with draft compensation attached, Prado will get a lot of free agent attention as a respected veteran who wields a good third base glove, has multi-position versatility and is enjoying his best hitting season in four years.

Unlikely Candidates

Pedro Alvarez, Santiago Casilla, Bartolo Colon, Rajai Davis, R.A. Dickey, Colby Lewis, Wieters, Anderson, Rasmus

Of course, this category expands to everyone else in this year’s free agent market, though these names merit some particular mention.  The $16.7MM price tag for veterans like Colon, Davis, Dickey, Lewis and Casilla is simply too pricey even if they’re all enjoying okay-to-very good seasons.  Alvarez will only be 30 next season, but while he’s been a good source of power for the Orioles, I doubt they’re willing to spend that much on a player who only hits right-handed pitching and provides no defensive value.  With those same limitations plus a draft pick compressing his market, I bet Alvarez would accept a QO if the O’s extended it.

Finally, we have the trio who made history by accepting qualifying offers last winter, and it’s an understatement to say that 2016 hasn’t gone as expected for any of the three.  Wieters and Rasmus simply haven’t hit, while Anderson underwent back surgery in March and is only now making his first appearance of the season.  These experiences could serve as cautionary tales for, say, players like Bautista or Hellickson.  Accepting a QO and then having another poor or injury-plagued year in 2017 would just about ruin Bautista’s earning power entirely, so it could behoove him to take a modest two- or three-year offer just to lock in more security.  If Hellickson passes on a multi-year deal now in favor of accepting the Phillies’ qualifying offer, a reversion back to his 2013-15 form would put him back at square one in terms of earning potential.