Before the post-2016 Collective Bargaining Agreement was put into place, the qualifying offer and its attendant draft consequences was the subject of a great deal of discussion, frustration, and offseason attention. Good free agents, the theory went, were being being disproportionately weighed down by the anchor of draft pick compensation in an era where teams were valuing draft picks and bonus pools more than ever.
Although the impact of the qualifying offer was undoubtedly reduced in the last CBA, it was also undoubtedly not eliminated.
It hasn’t been at the fore of our offseason discussions this year because good free agents were going unsigned anyway, but consider the nine free agents who received qualifying offers this year:
- Jake Arrieta – Unsigned
- Lorenzo Cain – Signed for decent contract much later than expected
- Alex Cobb – Unsigned
- Wade Davis – Signed for a decent contract shortly after the Winter Meetings
- Greg Holland – Unsigned
- Eric Hosmer – Signed for a decent contract much later than expected
- Lance Lynn – Unsigned
- Mike Moustakas – Unsigned
- Carlos Santana – Signed for a decent contract at a typical time
Just one or two of the nine signed for amounts and at times you’d typically expect for qualified free agents. And five of them – more than half! – are still unsigned after multiple weeks of Spring Training games.
The market was the market this year, but I suspect the added impact of draft pick compensation – even though its “cost” was reduced in the CBA – is having an effect.
To that end, Scott Boras, who represents several of those listed free agents, is not ruling out Mike Moustakas sitting out some or all of the 2018 season. Per the Kansas City Star, Moustakas may sit out until after the June draft, which decouples him from draft pick compensation, and then sign a deal for the remainder of 2018, hoping to cash in bigger next offseason. Boras indicated his belief that the market would be entirely different for Moustakas at that point, even though he would then be 30, and the market would be loaded with quality free agents.
Is draft pick compensation really that significant of a hurdle for Moustakas?
What about the other unsigned qualified free agents? How much of an impact is it having on, for example, Jake Arrieta? Enough that he, too, will wait until midseason to sign (at which point the Cubs no longer get a compensatory draft pick)?
A reminder on how the costs now work for signing qualified free agents:
- If the team signing a qualified FA paid the luxury tax in the preceding season, it would lose its second AND fifth-highest picks in the draft (regardless of round), as well as $1M of its international bonus pool in the upcoming period.
- If the team signing a qualified FA did not pay the luxury tax, but does contribute to revenue sharing (i.e. larger market teams with more reasonable payrolls), it would lose its second highest pick in the draft and $500K of it’s upcoming international bonus pool.
- If the team signing a qualified FA did not pay the luxury tax and also received revenue sharing money last season, it loses ONLY its third-highest pick in the draft.
The Cubs opted to sign unqualified free agents this year in Yu Darvish, Brandon Morrow, Tyler Chatwood, and Steve Cishek.