Taking A Closer Look at the Qualifying Offer, Part 2: Fixing the System

This is part two of a series on the qualifying offer system, it’s flaws and possible solutions. Earlier this week, I discussed the origins of the qualifying offer system and the inherent flaws in its design. To view part one, follow this link.

While money has been the common theme of most of this offseason, the qualifying offer has played a substantial role as well. The best players are having no trouble getting paid, but others are not having the same luck. As discussed in depth previously, the current system is flawed and in need of some improvement. Today, the focus will be on potential solutions to the problem and how a change will affect the game as we know it.

Based on the opinions of several bright minds around the game, there are several possible solutions to this current conundrum. To best sum up how the system can be changed, I will be referencing this article from Yahoo Sports, which advances five possible solutions to the current problem. To better understand what is the best possible fix, all five potential solutions must be analyzed in more depth.

1. Eliminate Ties Between MLB Draft and MLB Free Agency

The first potential solution involves eliminating all ties between the MLB draft and MLB free agency. Basically, this would involve no team gaining any picks because of free agency and no team losing any picks. In theory, this would probably create a more hectic system with more action in the form of trades. Though it appears the easiest and most logical solution, this method would be counter to the league’s efforts to promote competitive balance and compensate teams who lose players to free agency, and so is unlikely to be implemented.

2. Standing Qualifying Offer

The next potential solution involves a standing qualifying offer. This means that when a team offers a player a qualifying offer, that offer is good for the remainder of the offseason, as well as all the way until the next year’s draft. So if a player tested the free agent market and didn’t find the financial terms he liked, he could then sign back with his original team for the qualifying offer price. Logistically this would be a mess, as teams would have to save money in their budgets in case those players did accept. Also, it would be unfair to keep a team on the hook like that for months while a player searched for a better deal. This would clearly lessen the number of qualifying offers actually offered, and is clearly more friendly to the player and disadvantageous to the team.

3. Raising Offer/Tiered Qualifying Offer System/Multi-Year Offer

The third solution, and the one that may make the most sense, is either a more expensive qualifying offer, or a tiered system similar to the previous Type A/Type B designation. While the current qualifying offer is set at an average of the top 125 richest contracts, it could be set at the top 100, 75, 50, or 25 salaries, as seen below.

Top 25 Salaries: $23.5 million

Top 50 Salaries: $20.6 million

Top 75 Salaries: $18.3 million

Top 100 Salaries: $16.8 million

This would lessen the number of qualifying offers handed out, as teams would only be willing to extend qualifying offers to the most elite players. However, this comes with its own caveats, as fewer teams would be receiving compensation for players leaving via free agency.

An alternative here could be a tiered system similar to the type designations under the previous Collective Bargaining Agreement. Using this method, players would be put into groups and would be offered different amounts of money for the qualifying offer based on previous performance. Therefore lesser players would be offered less, and elite players would be offered more. This would further distinguish which players get qualifying offers, and would set apart the players more judiciously than having every single player held to the same monetary standard ($15.8 million this offseason).

A final alternative could be the introduction of multi-year qualifying offers. Say here the best players, like Zack Greinke for example, could get a multi-year qualifying offer for a similar yearly salary that it is now. Then players of lesser value, think of the guys still looking to sign this offseason, would be offered similar one-year offers, likely for less of an overall value. This would split the players up between the tiers, similar to what was discussed above, and would create more equality among players of differing abilities. This method could also be combined with the tiered system or the raised salaries from what they were this season, based on the top 125 salaries and set at $15.8 million.

4. Protect All First-Round Picks

Instead of just the top 10 picks in any given draft being protected, an alternative is the entire first round being protected. Therefore if a team signs a free agent, they would give up their second-round pick instead of their first round pick. The perceived value difference between first- and second-round picks is enough that the draft pick compensation would be less of a detriment to the signing team. The monetary cost of giving up a top draft pick would cause more teams to be willing to sign top free agents, even with the qualifying offer still attached. 

5. Eliminate Draft Bonus Pools

The final possible solution advanced is eliminating the bonus pools in the draft altogether. Under the current system, losing a first-round draft pick further penalizes teams because they have less money to spend overall in the draft, driving them into a sort of bargain hunting mode. If teams were able to spend whatever they wanted during the draft, they would be more inclined to give up a draft pick in order to sign a free agent. The bonus pools have obviously created more parity, as the worst teams, who are already usually financially strapped, are allowed more spending money in total during the draft. Eliminating these pools may be a detriment to the spending of some lower-budget teams, but it would eliminate some of the concern that comes with signing draft pick compensation free agents. 

None of these solutions are perfect, and making any sort of change won’t be easy. With regards to the qualifying offer system and how to make it better, there is no right or wrong answer. All the potential solutions above have their positives and negatives. While it remains unclear what the best solution is, it is pretty clear that some change must be made. Players are being detrimentally impacted by the qualifying offer system, and it is really not a good look for the game of baseball to have players remaining unsigned as the calendar turns to February. With new CBA negotiations coming up, this may be the last we will see of this current system. And to be quite honest, at this point all that can be said is, “Good riddance.”

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