As part of the new collective bargaining agreement, MLB and the MLBPA allowed for the creation of an international amateur draft. As this was something MLB was pushing for, the proposed tradeoff was the elimination of free agent compensation. The two sides reached their overall CBA in March, but included a July 25th deadline for the possible international draft/free agent compensation trade. The two sides failed to reach an agreement by that July deadline, so the qualifying offer system for free agent compensation that was agreed to 11 years ago remains in place.
The qualifying offer is set at $19.65MM this offseason, and by mid-November we’ll know which players received and turned down a QO. Certain star free agents, including Aaron Judge and Trea Turner, are locks to receive and turn down a qualifying offer. A dozen others could easily join them.
If those players sign with new teams, here’s a look at the draft picks each signing club would lose.
Competitive Balance Tax Payors: Red Sox, Dodgers, Mets, Yankees, Phillies, Padres
If any of these six teams signs a qualified free agent from another team, it must forfeit its second-highest and fifth-highest pick in the 2023 draft. The team will also have its international signing bonus pool reduced by $1MM.
Revenue Sharing Recipients: Diamondbacks, Orioles, Reds, Guardians, Rockies, Tigers, Royals, Marlins, Brewers, Twins, Athletics, Pirates, Mariners, Rays
These 14 teams received revenue sharing and did not exceed the competitive balance tax. If one of these teams signs a qualified free agent, it forfeits its third-highest pick. These teams face the smallest draft pick penalty. The Twins and Mariners are realistic possibilities to sign a qualified free agent, while the Orioles and a few other revenue sharing recipients may lurk as dark horses.
All Other Teams: Braves, Cubs, White Sox, Astros, Angels, Giants, Cardinals, Rangers, Blue Jays, Nationals
These 10 remaining teams would forfeit their second-highest pick and and have their international signing bonus pool reduced by $500K. The penalty is something of a middle ground.
What happens if a team signs two qualified free agents? The CBA calls for forfeiture of the next highest available draft pick. For example, if a team has already lost its second and fifth-highest picks and it signs a second qualified free agent, it would lose its third and sixth-highest picks. So as in the past, if you’ve already signed one qualified free agent, the draft pick cost to sign another is reduced.