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Qualifying offers update: The growing pains of competitive balance

Is this it? Or is the qualifying offer is just another rung in the ladder to a more equitable playing field?

Thirteen free agents were extended a qualifying offer this winter. None of them accepted, opting instead for the open market in search of a long-term deal.

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Several other players were considered for the one-year, $14 million offer, but in the end, only 13 were evaluated as being a fit for one of the newest wrinkles in the league's collective bargaining agreement. When a team extends a qualifying offer to a player, it often means they are confident that player will decline it, guaranteeing the club a compensatory draft pick should the player find a new employer in free agency.

In theory, this quid pro quo submission was designed to lessen the blow for smaller market teams that are often priced out of contention for their best players when free agency rolls around. In some cases, clubs have been able to circumvent these potential losses by locking up promising talent to early extensions, but not every rising star is open to that brand of club-centric financial planning.

For the most part, the early dividends of baseball's qualifying offer commerce have been seen by some of its richest organizations. In its first year of existence, the qualifying offer process awarded compensatory draft picks to the Braves, Rangers, Cardinals, Yankees, and perhaps most appropriately, the Tampa Bay Rays - who spent less than a third as much on payroll as the Yankees did in 2012.

Last year, the offer was worth $13.3 million, so there was a slight consideration for inflation, but the offer still presents little risk to major-market teams since they can absorb a one-year deal at that price tag rather easily. Smaller market teams have to be more certain that the player will decline, since a larger percentage of their budget to pay out the qualifying amount.

This year, the mid- to small-market teams like Royals, Indians, and Mariners have waded into the murky qualifying waters, but the 2013 iteration of this exercise has predominantly been applied by the usual suspects -- or at least it's beginning to look that way. The Yankees and Red Sox have all but made the qualifying offer their own bifurcated domain, having a hand in 100% of the QO-related signings so far this winter. The front offices in Boston and New York can't be blamed for their manipulation of the system. The Red Sox are simply using the system to keep a steady stream of prospects coursing through their farm. And the Yankees seem to be employing it to -- at least superficially -- break even, offsetting some of the draft-pick loss they would've incurred by signing Jacoby Ellsbury, Brian McCann, and Carlos Beltran by reeling in new first-round picks from the departures of Robinson Cano and Curtis Granderson.

The system doesn't seem to be serving its intended purpose, but as long as it remains in place, savvy teams will apply it to their benefit.

So far, seven free agents who received qualifying offers have signed, and six remain on the prowl for a new deal.


Robinson Cano didn't have to worry about the minutia of the qualifying offer. He clearly never considered accepting it and the loss of a draft pick didn't stop the Mariners from making him one of the richest baseball players of all time. New York almost certainly would've preferred to keep their best player, but getting a pick in return eases the pain a little.

The Yankees responded by scooping up the next best thing.

And then the next best thing.

And then the next ... and the next.

The Mets' first round pick was protected, because they finished among the bottom ten in winning percentage in 2012, so signing Granderson came with less collateral damage than it would have for the top two thirds of the league.

Mike Napoli stayed at home, inking a two-year, $32 million deal with the Red Sox. No draft repercussions will apply since Napoli won't be changing teams.


Shin-Soo Choo is easily the most coveted free agent remaining on the market. His next deal could reach nine figures before the bidding war culminates in a deal, and the loss of a draft choice probably won't keep many of his serious suitors from the chase. It might be surprising to hear the Astros pop up in Choo rumors, but as with Curtis Granderson's new deal with the Mets, Choo wouldn't cost Houston their first-round pick (number one overall) -- it's protected, so they will forfeit their second-round pick if they decide to sign a player that declined a qualifying offer.

Ervin Santana and Ubaldo Jimenez could reach a relative stalemate in free agency, which could lead them to turn to their former clubs as a fallback option. In having a pick tethered to their open market sales pitch, Santana and Jimenez have effectively become trade candidates for interested clubs. Not only would those teams have to shell out an upper-echelon deal, but they'd also be surrendering the six-plus years of control of a top amateur talent that the pick would yield. Without their respective draft apparitions haunting them, Jimenez and Santana might have already signed lucrative new deals. As it stands now, negotiations could continue well into January.

Nelson Cruz and Kendrys Morales look like the hitting equivalents of Santana and Jimenez. They could both help a team in the batter's box significantly, but as with their pitching counterparts, their substantial utility could be trumped by an even more substantial cost. Cruz could be headed back to Texas, but Morales' market looks bleak at the moment. The Mariners appear to have moved on, signing Corey Hart and trading for the Marlins' Logan Morrison.

The Red Sox draft prowess might have influenced their decision to wager the loss of Napoli, Ellsbury, and Stephen Drew -- all key players in their World Series-winning campaign. They have the young payers in place to stay competitive, even if all three had moved on this offseason. It wasn't surprising to see to the club retain Napoli, though. First base wouldn't have been a huge organizational strength without him, and considering the fact that he agreed to return for much less than he probably could have gotten elsewhere, Boston probably knew he fully intended to return. Letting Ellsbury walk won't be easy for Boston to address -- especially since he'll be in pinstripes -- but with Jackie Bradley, Jr. waiting in the wings, they have a promising alternative.

Stephen Drew presents the club with a pivot point as they build their future roster. They can go forward without Drew, who will inevitably sign elsewhere if they pass on re-signing him (and effectively award them an additional first-round draft pick in the process). Will Middlebrooks and super prospect Xander Bogaerts could hold down the left side of the infield. If either players falters, the Sox have two of the best infield prospects in the game in Mookie Betts and Garin Cecchini behind them. However, if general manager Ben Cherington decides to re-sign Drew to a long-term deal, he could look to trade Middlebrooks for additional minor league talent.

This offseason, QOs have made for some pretty labyrinthine maneuvering, and not all of those tabulated acrobatics have reflected the system's purpose.

A few years from now, we may look back at the qualifying offer as an awkward stage in the adolescence of competitive balance.

But for now, this is the lay of the land.