The qualifying offer is a one-year contract that teams can offer impending free agents before they hit the open market. If players decline the contract, they hit the open market, but the old team gets draft pick compensation from the new signing team (assuming the player gets signed). The QO amount for this year has risen to $14.1 million on a one-year contract. This sets up some interesting strategy implications for MLB clubs.
The general idea is that if there is a big market for a guy, offer him a QO and if he rejects it, you try to negotiate a deal he prefers or let another team spend more on him and you get a draft pick. If a guy is an impending free agent and does not receive a QO, often he might start to receive more interest on the open market. Kyle Lohse had some trouble finding a home last year after rejecting his QO, and many teams were wary of losing the draft pick.
What if your team has a superstar impending free agent? Is offering him a QO a no-brainer? Conventional wisdom would say "Yes." But let me offer some unconventional musings.
Let's imagine that the Red Sox are not going to be in on Jacoby Ellsbury. They have a viable replacement in Jackie Bradley Jr. And they have plenty of payroll space so keeping draft picks isn't as important to them as it is to the Rays. The Red Sox also learned a valuable lesson with Carl Crawford and Adrian Gonzalez -- huge payroll and long-term contracts can be massively debilitating to a club's flexibility. They just won a World Series with a fairly low payroll and also have a great farm system.
Maybe they employ a bit of game theory here with Ellsbury. If they don't offer him a QO, then the bidding on Ellsbury could be outrageous. He already has 10-plus clubs looking to sign him. No draft pick compensation!? Let's throw the house at him! There are many desperate teams looking to lock up a potential superstar. His contract should outshine Crawford's even if the Sox offer him a QO.
By not offering the QO, the Red Sox could potentially shackle another team with a terrible contract. I think this strategy could be a worthy consideration to look into. The Yankees are in a similar boat with Robinson Cano, although reports show that they hope to resign him.
It always makes sense to offer a QO to mid-level stars such as Curtis Granderson and Carlos Beltran because these types of guys won't kill a team with a high-pay, long-term contract. But if you could shackle a rival club with a Pujolsian contract maybe that is a smarter play than getting a potentially worthless draft pick.
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