How MLB's 'Qualifying Offer' Problem in Free Agency Can Be Fixed
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In the kickball game that is MLB free agency, a handful of star players are still waiting to be picked for a team.
Michael Bourn, Kyle Lohse, Rafael Soriano and Adam LaRoche were considered among the top players available in free agency when the offseason started.
All of them have skills in demand that could help a number of MLB clubs. Yet no team has reached out with a contract and pen yet.
At this point, they may be looking at the ground, shuffling their feet, wondering why they've been left hanging. Off to the side, agent Scott Boras is standing with arms folded, frowning while telling himself this is how it always goes.
The forsaken four are still seeking employment for 2013 largely due to rules in MLB's new collective bargaining agreement, specifically changes that were made to the draft system to prevent teams from giving big money and major league contracts to amateur talent—especially those prospects represented by Boras.
As Yahoo! Sports' Jeff Passan explains, MLB instituted two new measures to get the draft under control and prevent teams from spending their way around the salary figures suggested for each slot in the selection order.
First, fixed bonus pools were established for each team based on the previous season's record, giving the worst club the most money to use.
Secondly—and most importantly—teams signing any free agent that received a one-year qualifying offer from his previous team have to give up their first-round draft pick and bonus-pool money.
That would seem to explain why teams such as the Seattle Mariners and New York Mets might be hesitant to sign expensive free agents like Bourn. Is it worth giving up a first-round pick for a player who might not be truly impactful, in terms of being able to change a game with one swing?
Perhaps the Mets are a poor example, given their limited payroll. They aren't going to sign a free agent unless the price is significantly reduced. But the Mets do not have a top-10 pick in this year's draft, which are protected under the rules.
That's why the Cleveland Indians could sign Nick Swisher with no worries about losing their first-round pick. Yet a team with a protected pick would still have to surrender its second-round pick. According to CSN Chicago's Patrick Mooney, that will keep the Cubs from pursuing Bourn.
But this obviously wasn't a deterrent to the Los Angeles Angels signing Josh Hamilton or the Atlanta Braves snapping up B.J. Upton. Those clubs pick in the bottom-third of the first round and have less to lose in terms of a quality draft pick or bonus-pool money.
However, this new format is clearly causing problems when players the caliber of Bourn, Lohse, Soriano and LaRoche haven't signed and MLB teams report for spring training in approximately six weeks.
Three years ago, under the old free agency and draft systems, Juan Cruz went late into the offseason without any serious offers. As Sky Andrecheck explained for SI.com, Cruz's "Type A" status meant that a team had to surrender its first-round pick after signing him. No team wanted to do that for a middle reliever, regardless of how hard Cruz threw and effective he might be.
When the new collective bargaining agreement was negotiated, the Type A and Type B free-agent designations—determined by a complicated rating system by the Elias Sports Bureau—were discarded, and this new format was implemented.
But this appears to have now caused problems for those at the upper tier of the free-agent market.
What can be done? Passan suggests allowing teams to make sign-and-trade deals, such as those done in the NBA to circumvent salary cap rules. In MLB, a player's original team could sign him to the contract that his new club is offering. That way, the player gets the lucrative deal he was seeking and the signing team doesn't lose its first-round pick.
If that was allowed, however, how much would teams be willing to give up?
What would the Mariners, for example, trade to the Braves in exchange for Bourn? Would the deal include a representative package of talent (or prospects), or might Atlanta simply accept some fringe players since it had no intention of re-signing Bourn anyway?
Another proposal, floated by FanGraphs' Dave Cameron, is for an arrangement in which the club wouldn't extend a qualifying offer in exchange for the player accepting a lower salary in his final year of arbitration eligibility.
Such an agreement is currently prohibited under the collective bargaining agreement, but rules would have to be changed for any sort of solution to the qualifying offer issue to be properly addressed anyway.
Of course, that wouldn't apply to players such as LaRoche, who's used up all of his arbitration eligibility and just finished out a two-year contract with the Washington Nationals.
But it would have worked for Bourn, who received $6.8 million from the Braves to avoid arbitration last year. Would he have accepted, say, $5 million if it meant Atlanta didn't extend a qualifying offer and thus kill interest from most of the teams interested in signing him?
One solution could be to eliminate draft-pick compensation entirely.
That probably wouldn't appeal to the teams with poor records that stand to lose a star player. Nor might it be agreeable to clubs with picks in the middle of the first round who would be willing to let a player go, knowing a compensatory draft pick is imminent.
Draft-pick compensation is also a measure to save teams from themselves, to some extent. Even owners who have no interest in paying top dollar to star players and let them go still have a chance to build a competitive team if they draft well and bring in young, cheap talent.
Take that away, and some franchises could get really ugly.
Regardless of the problems with the current draft format and free-agency rules, leaving a few star players looking for contracts in January is preferable to the erosion of competitive balance (or the pretense of it) in baseball.
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