The past few winters following the new MLB Collective Bargaining Agreement have seen free agency change dramatically. It was once a market for teams to go on winter shopping sprees to address needs, whether they were legitimate needs or needs fueled by ownership (see: Albert Pujols, Los Angeles Angels).
Free agency is now something of an outlet mall, rather than a high end luxury store. Sure, there are going to be some big names available, but it has become a means for teams to make smaller scale moves. These tweaks are what many believe to be the lynch pin between a winning season and a season filled with disappointment. Something that has aided in the change free agency has gone through is the new qualifying offer system, where teams offer players a one year contract worth a specific amount of money, this season being $14.1 million, and if the player turns it down, the team will receive draft pick compensation should that player sign elsewhere.
This new system did away with the old system, which ranked players based on production and salary, and categorized them as “Type A” or “Type B” or “Type C” free agents. This old system included specific compensation in draft picks, but since the old system resulted in extra draft picks, supplemental picks, or no picks at all, it became much easier for teams to let their higher priced players go. This new system allows teams the option to extend an offer for compensation, since there are certain players they believe are worth compensation and some that are not. The drawback to this new system, however, is that in the new age of building teams through the draft and signing players young, teams are less willing to let go of their precious picks, which can seriously kill a player’s market (See: Kyle Lohse).
The qualifying offer changes every season, and this season it was for one year and $14.1 million. A team’s options are pretty clear: offer the player a qualifying offer, risking they accept the offer, or let that player walk and receive compensation or bring that player back for a cheaper price. After watching the qualifying offer kill certain player’s markets, however, how long will it take before teams stop using the qualifying offer? At some point, players may begin to take the one year offer as means of deterring the team from giving them the offer in the future, thus opening their market up more.
Think about it — if players watch their colleagues and teammates hit the open market and have their markets reduced exponentially, why would they let the system get to them too? If they accept the offer, they get a nice one year salary and hit the market the following year with the risk of a qualifying offer all but eliminated, since teams may not want to risk that player accepts the offer again, since with certain players, the offer is basically a market killer. Plus, with a player like Michael Wacha, who pitched in the World Series, being drafted as a compensation pick, there is even more value placed on the picks that are given up.
The new compensation system addresses many issues with the old system, guaranteeing compensation to a team, as long as they extend an offer. However, the qualifying offers can kill many players’ prospective markets, and it may not be long before the players try to “beat the system” by accepting these offers, and it may not be long after that where we see the offer doled out less and less.