We looked already at the possible draft compensation that teams might recoup from losing players who decline qualifying offers. Now, we’ll take a glance at the topic from the other side of the coin: what it’ll cost other teams to sign such players.
Last week, 10 players received qualifying offers. Teams interested in signing Gerrit Cole, Stephen Strasburg, Zack Wheeler, Madison Bumgarner, Jake Odorizzi, Anthony Rendon, Josh Donaldson, Marcell Ozuna, Jose Abreu or Will Smith will therefore be required to forfeit draft and perhaps international bonus considerations in order to sign anyone from that bunch — assuming each of the 10 rejects that one-year, $17.8MM sum. Here’s a breakdown of the specific penalties that all 30 teams would face in signing a “qualified” free agent:
Competitive Balance Tax Payors: Red Sox, Yankees, Cubs
If any of these three teams signs a qualified free agent, they will forfeit their second- and fifth-highest selections in next summer’s draft. They’d all also see $1MM docked from their 2020-21 international bonus pools. The Red Sox, in particular, seem more intent on shedding payroll and lowering their luxury hit than on adding a high-end free agent. Signing a second qualified free agent would mean then surrendering their third- and sixth-highest selections as well as an additional $1MM in international funds.
Revenue Sharing Recipients: Diamondbacks, Braves, Orioles, Reds, Indians, Rockies, Tigers, Royals, Marlins, Brewers, Twins, Athletics, Pirates, Padres, Mariners, Rays
These 16 teams received revenue sharing and did not exceed the competitive balance tax during the 2019 season. As such, they’d forfeit “only” their third-highest selection in the 2020 draft by signing a qualified free agent. Signing a second qualified free agent would require forfeiting their fourth-highest pick. A third would mean their fifth-highest pick (and so on). Revenue-sharing recipients who do not cross the luxury threshold face the smallest penalty in signing a qualified free agent.
All Other Clubs: Nationals, White Sox, Astros, Dodgers, Angels, Mets, Yankees, Phillies, Giants, Cardinals, Rangers, Blue Jays
These 12 remaining teams would forfeit their second-highest pick and and have their international signing bonus pool reduced by $500K upon signing a qualified free agent. At 67-95, the Blue Jays had the worst record among this group, meaning it’d be most costly (in terms of amateur talent acquisition capital) for them to sign a qualified free agent. However, GM Ross Atkins has said since the season ended that such concerns won’t deter the Jays from pursuing qualified free agents.
For teams in this group, signing a second qualified free agent would mean punting next year’s third-highest selection and an additional $500K. A third would mean parting with the fourth-highest pick and another $500K (and so on).
While those penalties surely count for something, it’s worth reminding that they’re also not as steep as some clubs like to portray. Each team’s top overall selection is protected, and the highest draft choice that’d theoretically be forfeited would be the Cardinals’ Competitive Balance (Round A) selection, which would come in after the first round and after all of the compensatory picks for these free-agent losses. Competitive Balance Round A in 2019 spanned pick Nos. 35-41, and the slot value of those selections ranged from $2.1MM (No. 35) to $1.81MM (No. 41).
With 10 QOs this year, that compensatory round will be longer. Most teams with a Competitive Balance draft pick next season (barring trades of those picks, which are the only draft choices eligible to be traded) will fall into the “revenue sharing recipient” bucket, meaning their Round A picks would be protected. If the Cardinals pass on a qualified free agent, then the Jays and their second-round pick (likely in the mid-40s) would face the largest potential penalty.