Explaining MLB's 'qualifying offer'

Explaining MLB's 'qualifying offer'
November 2, 2012, 4:43 pm
Share This Post

The Red Sox have seven free agents from their 2012 roster Aaron Cook, James Loney, Daisuke Matsuzaka, Vicente Padilla, Scott Podsednik, David Ortiz, and Cody Ross. The team must decide by 5 p.m. today whether to make a qualifying offer to these players.

As part of the current collective bargaining agreement, in effect for 2012-2016, the concept of qualifying offers is in play for the first time. Which brings up several questions, including: What is a qualifying offer? How is it determined? What does it mean for the player and the team?

Players no longer have to declare free agency, as they have in the past. Now, players automatically became free agents at 9 a.m. the day after the World Series ended in this case, Monday. Teams have a five-day window of exclusivity, known as the quiet period, which began Monday and expires at 11:59 ET tonight, in which they alone can talk with their players who are free agents. When that expires players may talk to any team.

The amount of the qualifying offer for this year is determined by averaging the top 125 salaries of 2012. That amount is likely to change each year. The qualifying offer for this year is 13.3 million. If the player accepts the qualifying offer from the Sox, he will stay with the team for 2013 at a salary of 13.3 million. If he declines, he is free to negotiate with other teams. A player has until 5 p.m. seven days after the qualifying offer deadline, in this case Nov. 9, to decide whether to accept or decline the qualifying offer.

The Sox must make a qualifying offer to a player if they want to receive a compensation pick in the 2013 draft in the event the player signs with another team. If they do not extend a qualifying offer to a player and the player signs with another team, they will not receive a compensation pick in next years draft. Compensation picks will be made in the 2013 draft after the first round. (The team that signs such a player would have to forfeit a first-round pick except for the top 10 picks. That forfeited pick would not go directly to the team which the player left. But, thats a primer for another day.) There are no more Type A and Type B classifications of free agents.

Of the Red Sox group of free agents, Ortiz is the only player to whom they would consider making a qualifying offer. Ortiz, however, made 14.75 million in 2012 and would likely reject a qualifying offer. The designated hitter, who turns 37 on Nov. 18 and who just completed his 10th season in Boston, would prefer a two-year deal. If he rejects the qualifying offer, the Sox can continue to negotiate with him until he agrees to a contract with the Sox or another team. The Rangers are also reportedly interested in him.