I'm going to update my post on this topic from last year. It explains this topic, which comes up every year at this time.
So, what's a Qualifying Offer? It's a one-year contract offer teams can make to their players who have filed for free agency. This year, a qualifying offer is $15.8 million for the 2016 season.
Why would teams offer that much money for one year? Two reasons. First, the best free agents are worth at least that much. Second, and more importantly, if the player rejects the qualifying offer, the team offering it gets compensation, and the team signing the player gets a penalty.
What's the compensation? If a team offers a player a qualifying offer and the player rejects it, the team gets an extra draft pick between the first round and second rounds of the amateur draft in June. The extra picks (called "sandwich picks") are allocated in reverse order of standing during the prior season.
What's the penalty? A team signing a player who rejects a qualifying offer forfeits its first draft choice in the June amateur draft. One exception: The first ten picks in the draft are "protected" and don't get forfeited. The teams with the worst ten records last season--the Phillies, Reds, Braves, A's, Rockies, Brewers, Marlins, Padres, Tigers and Mariners--won't lose their first round draft choice if they sign a player who received a qualifying offer. Instead, they'll give up their second-highest round draft pick instead. If a team signs more than one player who received a qualifying offer, it'll give up its next-highest draft pick.
How onerous is that penalty? It depends on the player. The Nationals didn't think about the penalty when they signed Max Scherzer, arguably the best player in last year's free agent class. Losing a draft pick won't stop a team from pursuing a big star like Dodgers pitcher Zack Greinke or Cardinals outfielder Jason Heyward. At the lower end of players receiving qualifying offers, though, relinquishing a draft pick can result in teams being unwilling to sign a player. After the 2013 season, former Mariners DH Kendrys Morales and former Red Sox shortstop Stephen Drew received and rejected qualifying offers and couldn't find anyone to take them. Drew eventually re-signed with the Red Sox in May (there are not penalties or compensation when a free agent re-signs with his original team), and Morales signed with the Twins on June 8 (after the amateur draft, so there was no penalty). Both those players were pretty obviously screwed out of money by the draft pick penalty.
Why is there a penalty? In part it's because baseball wants to compensate teams that lose star players to free agency. But let's be clear: The sandwich pick that the teams receive for losing a player to whom they made a qualifying offer is their compensation. The loss of a draft pick only hurts the signing team. It doesn't help the team losing the player. By penalizing the signing team, it hurts the player, because it reduces his value. It ultimately serves to reduce free agent compensation.
How did they come up with the $15.8 million figure? It's the average salary of the 125 highest-paid players in baseball. It gets recalculated every year. Last year it was $15.3 million, the year before $14.1 million.
Are there problems with the system? CJ Nitkowski wrote a nice piece describing them last year. The most glaring are how they screw players at the bottom of the spectrum. There's also a huge loophole: Players who are traded during the last year of their contract aren't subject to qualifying offers or compensation. They include Blue Jays pitcher David Price, Mets outfielder Yoenis Cespedes, Royals pitcher Johnny Cueto and infielder-outfielder Ben Zobrist, Giants pitcher Mike Leake, and Astros pitcher Scott Kazmir. The two top pitchers in this year's free agent class are Price and Greinke. By virtue of being traded last year from Detroit to Toronto, the team signing Price avoids a draft pick penalty that the team signing Greinke will have to pay.
How often do players accept qualifying offers? It hasn't happened yet. Every player who's received a qualifying offer has rejected it since the system was implemented in 2012. That could change this year, as there were a record 20 players who received qualifying offers compared to twelve last year and thirteen the year before. It would appear that Padres pitcher Ian Kennedy, who was 9-15 with a 4.28 ERA last year and 29-38 with a 4.25 ERA over the past three years, is a candidate to accept a qualifying offer. However, a lot of analysts expect nobody to accept a qualifying offer, given players' preference for multi-year contracts rather than a one-year deal, even for $15.8 million.
Who's received qualifying offers? The twenty players are, by team:
When do the players have to let the team know? The players who received qualifying offers were notified last Friday and they have a week to respond. So by the end of business on Friday, November 13, they have to make a decision.
What happens if they reject the offer? They become free agents, able to sign with any team (subject to the compensation for their former team and penalty for their signing team) described above.
Are the parties happy with the system? Players understandably don't like any system that reduces their value, and attaching a penalty to signing a player reduces their value. Owners like getting compensated for losing players. So that's the impasse, and the qualifying offer system is the latest attempt to bridge it. I expect the qualifying offer system to be modified the next time the players and owners negotiate their collective bargaining agreement. The current CBA runs through December 1, 2016.
As Yogi Berra is alleged to have said, it's tough to make predictions, especially about the future. These predictions for upcoming season are going to be pretty quick and dirty. You don't want to spend a lot of time reading them anyway, do you? Unlike other prognosticators, though, I'll revisit these to see how badly I did.
Since baseball games are the product of runs scored and runs allowed, I'm going to focus on those two metrics in developing my 2014 predictions. Here's the National League West, Central,
and East along with the American League Central and East.
Oakland Athletics - 96-66 in 2013, 4.7 runs scored per game (4th in MLB), 3.9 runs allowed per game (9th in MLB): I always get the feeling that the A's are just a couple steps ahead of the posse. In the Moneyball era, they had a lot of guys who got on base a lot; now everyone's doing it. Last year they emphasized pitchers who give up fly balls and batters who hit them; probably the league catches up to them on that as well. They've won more games over the past two years than any team in the American League. I think it's going to be hard to keep that streak going. Prediction: More runs scored and allowed, 91-71.
Texas Rangers - 91-72, 4.5 runs scored per game (8th in MLB), 3.9 runs allowed per game (10th in MLB): The Rangers made a couple huge offseason deals, signing on-base machine Shin-Soo Choo to lead off and trading second baseman Ian Kinsler for lefty slugger Prince Fielder. The trade of Kinsler opens up second to Jurickson Profar, a highly-touted prospect who disappointed last year, compiling an OPS that was 24% below the league average (adjusting for his home park), but Profar turned 21 only last month (though he's out with a shoulder injury). The pitching staff is a worry, with last year's Cy Young runner-up followed by a bunch of guys with injury problems. Prediction: More runs scored and allowed, 89-73.
Los Angeles Angels - 78-84, 4.5 runs scored per game (7th in MLB), 4.5 runs allowed per game (24th in MLB): Albert Pujols is apparently recovered from his foot problems, Josh Hamilton was OK in the second half of last season, and they still have Mike Trout. Pitching was the problem last year, and they added youngster Tyler Skaggs and lefty Hector Santiago in the trade for Mark Trumbo. When this team plopped down all that money on Pujols, C.J. Wilson, and Hamilton, they thought they were buying pennants. They didn't, but I think they're getting closer. Prediction: More runs scored and allowed, 83-79.
Seattle Mariners - 71-91, 3.9 runs scored per game (22nd in MLB), 4.7 runs allowed per game (26th in MLB): You might have heard that they signed former Yankees 2B Robinson Cano, one of the best players in baseball. Other than that, their deals were minor, and Hisashi Iwakuma, who finished third in the Cy Young voting, is out with a strained tendon in the middle finger of his pitching hand. Prediction: More runs scored and allowed, 76-86.
Houston Astros - 51-111, 3.8 runs scored per game (26th in MLB), 5.2 runs allowed per game (30th in MLB): It's tempting to look at last year's team and just say, "Well, they can't be much worse." I think they'll do better than that. They added CF Dexter Fowler via trade and starting pitchers Scott Feldman and Jerome Williams via free agency. The Astros also have a lot of strong prospects whom we'll likely see later in the season. Prediction: More runs scored, fewer allowed, 56-106.
A week and a half ago, I suggested that the Alex Rodriguez suspension gave the Yankees a shot at staying under baseball's $189 million payroll luxury tax limit, potentially saving them about $30 million in 2015-2017. Turns out they decided to give A-Rod's money to Masahiro Tanaka, signing him for $155 million for seven years with an opt-out after four years.
Let's see...$155 million + $20 million posting fee divided by seven years...That's an average annual value of exactly $25 million that gets added to the Yankees' payroll in 2014 for luxury tax calculations. Nope, not getting under $189 million this year. Not even close.
Tanaka was sensational last year in Japan last year, going 24-0 (that is not a typo) with a 1.27 ERA and 0.94 WHIP in 212 innings. He struck out 183 and walked only 32. He led the Japan Pacific League in wins, ERA, WHIP, K/BB ratio, and fewest home runs and walks per inning. He allowed the second-fewest hits per inning and struck out the third-most batters per inning. His team, the Tohoku Rakuten Golden Eagles, won the Japan Series 4-3, though Tanaka took the loss, his only one of the season, in the sixth game.
In short, Tanaka looks pretty good.
On the other hand, so did the Yankees' last Japanese free agent pitcher, Kei Igawa. In 2006, for the Hanshin Tigers, he went 14-9 and was second in the Central League in wins, seventh in ERA, sixth in WHIP, fourth in hits per inning, second in walks per inning, and sixth in K/BB. He signed a five year, $20 million contract. In his first year with the Yankees, 2007, he was 2-3 with a 6.25 ERA in 14 games. In 2008 he pitched in two games in New York with a 13.50 ERA. That's it. He did collect his $4 million annual salary in 2009-11, but spent the time pitching 68 games in the minors.
The Yankees' other Japanese pitching import was Hideki Irabu, whom George Steinbrenner famously called a "fat toad." He signed a four year, $12.8 million contract with the Yankees in 1997 after leading the Pacific League in ERA (2.40 vs. league average 3.72), hits per inning, home runs per inning, strikeouts per inning, and K/BB. He was second in WHIP. (Actually, the Padres purchased his contract from the Chiba Lotte Marines, but Irabu insisted he's play only with the Yankees, so San Diego traded him to New York.) In 1997-99, he started 64 games for the Yankees, compiling a 29-20 record, 4.80 ERA, 1.36 WHIP, and a reputation for off-field controversies and injuries. The Yankees traded him after the 1999 season and he spent his last three years in the majors going 5-15 with a 6.31 ERA over 118.1 innings with Montreal and Texas. (In his last year, he led the 2002 Rangers with 16 saves. His 5.73 ERA and 1.43 WHIP are both the 15th worst ever for a pitcher with 16+ saves.) He committed suicide in 2011.
Tanaka, 25, is younger than the other two were. Igawa was 27 when he made his Yankee debut in 2007 and Irabu was 28 in his first Yankee start in 1997. And the recent track record with Japanese pitchers is impressive, as the Rangers' Yu Darvish and the Mariners' Hisashi Iwakuma (both signed prior to the 2012 season) finished 2-3 in the AL Cy Young vote last year. The Yankees obviously hope they blew their chance at staying under the luxury tax cap with a pitcher more like Darvish and Iwakuma than like Igawa and Irabu.
