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October 26, 2012

Overthinking It

Predicting the First Offseason of Qualifying Offers

by Ben Lindbergh

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For the next several days, much of the baseball world will be watching the Tigers and Giants fight it out in the fall classic. But for the 28 teams whose seasons have already ended, the focus will be on what to do once the World Series is over and the winter’s work begins.

As soon as the Series ends, eligible players will become free agents. Under the new CBA, teams can still seek draft-pick compensation for departing free agents, but the old system of classifying free agents as “Type A” and “Type B” based on past performance has been abolished. Now, a team that wants to receive a compensatory pick at the end of the first round in the following year’s amateur draft has to make a “qualifying offer”: a one-year contract equal to the average of the top 125 salaries from the previous season (in this case, $13.3 million).

A player’s former team can continue to negotiate with him if he rejects the offer, but if he signs somewhere else, his new team will have to forfeit either a first- or a second-round pick (the first 10 picks are protected). In some cases, this could affect the size of the contract a free agent ultimately receives, since a team won't want to pay full price for a player and surrender a low pick (though the eventual earnings of a player good enough to receive a qualifying offer probably won't be affected as much as those of a relief pitcher who qualified for "Type A" status under the old system). A team can’t be compensated for a free agent unless he spent the whole season on its roster, which rules out mid-season trade targets like Ryan Dempster, Zack Greinke, Anibal Sanchez, and Shane Victorino (not to mention the amazing Marco Scutaro).

Qualifying offers must be extended by 5:00 PM Eastern on the fifth day after the World Series. Players who receive them will have until the seventh day after the Series to accept or reject. So which players are good candidates for qualifying offers, and what will their teams decide to do?

Easy Decisions

Josh Hamilton, Rangers
Hamilton, the highest-profile impending free agent, will almost certainly sign a lucrative, long-term contract somewhere this winter. He won’t be tempted by a one-year contract for a lower salary than he made this season, but the Rangers have nothing to lose by making the offer as they size up the market for his services.
Will he receive a qualifying offer? Yes

Kyle Lohse, Cardinals
Lohse’s 16-3 season set him up for the kind of mega-contract a team might regret. The Cardinals won’t be the ones to give the 34-year-old big bucks, but they’ll want to collect a pick when another club does.
Will he receive a qualifying offer? Yes

David Ortiz, Red Sox
Ortiz made more than $14.8 million in 2012 and had his highest True Average ever (.343) when his achy Achilles allowed him to play, so a short-term contract at a lower AAV would be a best-case scenario for Boston. Ortiz and the Red Sox are reportedly close to a two-year deal that could be finalized this week, though, so the Sox likely won’t need to make a qualifying offer.
Will he receive a qualifying offer? No, assuming an extension is signed before Ortiz becomes a free agent. Otherwise, yes.

Jake Peavy, White Sox
The risk here is that teams will be too wary of Peavy’s injury history to offer him a multi-year contract or a single-season salary higher than $13.3 million when the White Sox decline his $22 million option for 2013. That risk seems small, though, since Peavy is still just 31 and stayed healthy and effective all season.
Will he receive a qualifying offer? Yes

Rafael Soriano, Yankees
Following a successful season filling in for Mariano Rivera, Soriano is expected to opt out of the $14 million he’s owed for 2013. The Yankees wouldn’t mind bringing him back for one year as insurance for Rivera, so they’ll extend a qualifying offer. However, Soriano will want to go to a team where he can close instead of playing second fiddle to a 43-year-old, and he’ll probably command a multi-year contract. The Yankees will be glad to get the pick.
Will he receive a qualifying offer? Yes

Nick Swisher, Yankees
The Yankees reportedly don’t want to re-sign Swisher for the price he’ll probably command, but they wouldn’t mind bringing him back on a one-year basis, even at a roughly $3 million raise from his 2012 salary.
Will he receive a qualifying offer? Yes

Difficult Decisions

Michael Bourn, Braves
A qualifying offer would be a sizeable raise for Atlanta’s free-agent outfielder, but Bourn is a Scott Boras client, and his agent will want to pursue a bigger payday. The Braves might still bring him back, but they’ll make sure to get themselves a draft picking before deciding whether to up their offer.
Will he receive a qualifying offer? Yes

Edwin Jackson, Nationals
Jackson faded in September, finishing yet another season as a league-average pitcher who seemed like he could be better. Even if that’s all he is, though, there’s value in an average starter who’s stayed off the disabled list since 2004. Jackson might get a better offer from a team that’s willing to pay more for his potential, but Washington wouldn’t be upset if they wound up with him for another year.
Will he receive a qualifying offer? Yes

Hiroki Kuroda, Yankees
The Yankees want to bring Kuroda back, but the newly budget-conscious club might want to make an opening offer below $13.3 million instead of starting the bidding there. The righty made $10 million this season and will turn 38 before Opening Day, so it’s possible that they could snag him for a little less, but his success in the AL East should attract other suitors. Extending a qualifying offer makes the most sense.
Will he receive a qualifying offer? Yes

Shaun Marcum, Brewers
Marcum is an effective starter when healthy, but he’s topped 200 innings only once, and he suffered another injury-plagued season in 2012. The soft-tosser’s fastball velocity sank slightly lower after his return from elbow tightness, and small-market Milwaukee likely won’t want to be on the hook for $13.3 million in the event that another team doesn’t pay him like a more durable pitcher.
Will he receive a qualifying offer? No

Mike Napoli, Rangers
It’s hard to find catchers who can hit, so Napoli should draw significant interest despite his down year and lackluster defense. However, a qualifying offer would represent a considerable raise, and he might decide to accept it and try to build his value back up for a bigger payday after next season. Catchers tend to decline quickly, and the Rangers might be wary of committing that much cash to one who is about to turn 31.
Will he receive a qualifying offer? No

B.J. Upton, Rays
The Rays’ highest-paid player made $7 million this season; offering Upton nearly twice that would be a considerable risk for a small-market team with a notoriously tight payroll. However, Upton will probably receive a multi-year offer from another team, and the Rays depend on draft picks to keep the cost-controlled talent coming. Even if Upton were to accept the Rays’ offer, they could probably find a team to take him via trade.
Will he receive a qualifying offer? Yes

A version of this story originally appeared on ESPN Insider Insider.

Ben Lindbergh is an author of Baseball Prospectus. 
Click here to see Ben's other articles. You can contact Ben by clicking here

17 comments have been left for this article. (Click to hide comments)

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Josh Johnson

Ben, I would argue that $13.3 for 1 year of Mike Napoli would be a good deal. Less risk than a longer term deal and $13.3 would be on the low side of his expected production, roughly a 3 WARP player with some upside and no easy internal solution at catcher.

Oct 26, 2012 05:44 AM
rating: 3
 
BP staff member Ben Lindbergh
BP staff

I'd like to think that Geovany Soto has a bounceback walk year in him, but I can certainly see the case for bringing Napoli back on those terms.

Oct 26, 2012 05:47 AM
 
Bill B

Wouldn't Napoli make an effective DH, assuming he has a bounce-back year? I sure hope the Rangers don't plan to use Young at DH instead of Napoli.

Oct 26, 2012 05:50 AM
rating: 0
 
BP staff member Ben Lindbergh
BP staff

What, and leave all those intangibles on the bench?

Oct 26, 2012 05:50 AM
 
jdeich

With Jeff Mathis locked up through 2014 (!) by the Blue Jays, and David Eckstein retired, intangibles will command a premium price this offseason. The Rangers will have to look to Young to give 110% Grittiness Over Replacement Player, because as you probably know, it's not something that can be coached.

Oct 26, 2012 09:47 AM
rating: 4
 
Bill B

One player you didn't analyze is Adam LaRoche of the Nationals. I suspect that they might work out a two-year deal, but if they don't, I would expect them to make a qualifying offer. A one-year commitment of $13.3 to a 32/33 (??) year old 1B who fields well and hit 33 HR's seems reasonable relative to the market.

Oct 26, 2012 05:48 AM
rating: 2
 
BP staff member Ben Lindbergh
BP staff

I can sort of see it--I can sort of see a lot of contracts when they end after one year--but I think it would be a stretch to project LaRoche as any better than a league-average first baseman at age 33, and I don't think a league-average first baseman is worth that kind of cash.

Oct 26, 2012 06:10 AM
 
Bill B

I can see your point. I suspect that LaRoche will regress some this coming year. However, I also think the Nats would rather have a known and consistent player at first base for what they hope will be a championship run next year. They love LaRoche's D, which they think is important to the success of the pitching staff. They DO have in-house options (Morse and Moore), which would make sense if they find a high-OBP, classic CF, but they have to decide whether to make the qualifying offer before they go fishing for a CF

Oct 27, 2012 06:12 AM
rating: 0
 
jdeich

Kyle Lohse strikes me as the 'Easy Decision' outlier. He just completed a 4yr/$41M contract with 2 injury-shortened bad seasons, a decent enough 2011, and an unexpectedly good (and luck-inflated) 2012. At age 34, is the risk of offering 1yr/$13.3M worth the draft pick?

How much is the Cardinals' compensatory pick worth, historically? (I couldn't figure out the ordering system from the 2012 list.) Assuming the Cardinals think Lohse is really worth closer to $8M in 2013, is the pick worth $6M+?

Oct 26, 2012 10:05 AM
rating: 0
 
BillJohnson

Thing is, what's the risk? Lohse is at the stage of his career where if anyone dangles a multi-year contract in front of him, he's likely to take it even if the per-year amount is slightly lower than the one year of $13M guaranteed.

However, you're nibbling around the edges of the right question if there is really a chance that he accepts. The Cardinals have so much young pitching talent that it's not clear they'd want him back at that price, even if the 2012 version of Lohse is the real thing. I agree that this one isn't as "easy" as it is described as being, although I do think he'll get the offer.

Oct 26, 2012 12:37 PM
rating: 1
 
Peter7899

With most the difficult decisions, if the player accepts they would probably be tradeable. Didn't the Rays do just that a couple years ago with a player who accepted arb from them? I can't remember who though.

Oct 26, 2012 13:44 PM
rating: 0
 
Josh Johnson

I know the Braves traded Soriano to the Rays after he accepted arbitration. That was the winter before Soriano had the big year in Tampa.

Oct 26, 2012 13:57 PM
rating: 0
 
Peter7899

That's right, that's who I was thinking of. He was coming off that big year in Atlanta between him and Mike Gonzalez.

Oct 26, 2012 14:00 PM
rating: 0
 
Agent007

I like Swisher as a ballplayer but not at $13.3 million. I doubt any team (not even the Yankees) will be willing to pay that much for Swisher. Same with Upton at Tampa Bay. As much as they prize draft picks, I doubt they will gamble $13.3 million to get a draft pick. I suspect there won't be many qualifying offers this year.

Oct 26, 2012 15:06 PM
rating: 0
 
Behemoth

You're missing the point that these players will both get multi-year contracts, so even if they don't get $13.3 million/year they'll likely take the longer-term deal assuming the annual is relatively close to the $13.3 million figure. Also, I think other teams would pay that amount for both players if they could get a one year deal.

Oct 27, 2012 17:05 PM
rating: 0
 
SC

Though I think you've captured it in the analysis, I think you have understated (but not underestimated) the value of a one year contract to a club. Most clubs would much rather give a player a $13/1 than say $20/2, let alone $28/3. Particularly in the players identified above, there are significant injury or decline risks, mildly to moderately overpaying a player for a single season is far better than signing marginal talent to multi-year deals.

Oct 26, 2012 22:28 PM
rating: 4
 
InBillyWeTrust

This was my feeling as well. There's almost no such thing as a bad one year deal. I would think most teams would jump at the opportunity to sign Swisher or Upton to a 1 year $13 million deal.

Oct 27, 2012 01:00 AM
rating: 0
 
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