New QO System

[OriolesMagic83]

• First-round picks will no longer be sacrificed in signings of QO-declining players, Jon Morosi of MLB Network tweets. These changes will not apply until the following offseason, Morosi notes on Twitter.
• All teams will stand to sacrifice draft picks if they sign players who declined qualifying offers, Stark tweets, but at varying levels. Organizations that are over the luxury tax line will punt a second and a fifth-round choice, while those who are under the threshold would stand to sacrifice a third-rounder.
• Importantly, players will no longer be able to receive more than a single qualifying offer, Rosenthal reports (Twitter links). Additionally, a team whose QO-declining player signs elsewhere will only receive compensation if that player signs for $50MM or more, and the draft compensation will be dependent upon the market size of the team that loses a free agent.
• All told, the above changes promise to represent a rather monumental shift in the function of the qualifying offer system. It will clearly hurt free agents less, and the reduced draft compensation will likely make it slightly more likely that veterans end up being traded in the season before they hit the open market. Whether less players will be tagged with QOs remains to be seen; though there’s less to be gained for teams, there’s also less of a disincentive for players to enter free agency.

 

from mlbtraderumors.com

[MDtransplant757]

31 minutes ago, OriolesMagic83 said:

• First-round picks will no longer be sacrificed in signings of QO-declining players, Jon Morosi of MLB Network tweets. These changes will not apply until the following offseason, Morosi notes on Twitter.
• All teams will stand to sacrifice draft picks if they sign players who declined qualifying offers, Stark tweets, but at varying levels. Organizations that are over the luxury tax line will punt a second and a fifth-round choice, while those who are under the threshold would stand to sacrifice a third-rounder.
• Importantly, players will no longer be able to receive more than a single qualifying offer, Rosenthal reports (Twitter links). Additionally, a team whose QO-declining player signs elsewhere will only receive compensation if that player signs for $50MM or more, and the draft compensation will be dependent upon the market size of the team that loses a free agent.
• All told, the above changes promise to represent a rather monumental shift in the function of the qualifying offer system. It will clearly hurt free agents less, and the reduced draft compensation will likely make it slightly more likely that veterans end up being traded in the season before they hit the open market. Whether less players will be tagged with QOs remains to be seen; though there’s less to be gained for teams, there’s also less of a disincentive for players to enter free agency.

 

from mlbtraderumors.com

Well that's unnecessarily complicated. 

[notyourbuddy]

Now when Dan signs a free agent we won't have to spend the entire season complaining about how we just wasted a 1st rounder.

[Redskins Rick]

15 hours ago, Can_of_corn said:

How does it hurt Free Agents?

The team's with the most to spend have a smaller penalty to sign them.

It isn't as good as getting rid of compensation entirely of course but that's a given.

You can thank the Latino players who was highly opposed to it, they like cashing in on the big deals for keeping this out of the CBA.

 

[Redskins Rick]

6 hours ago, notyourbuddy said:

Now when Dan signs a free agent we won't have to spend the entire season complaining about how we just wasted a 1st rounder.

No, but, we can still find something to complain about.

[Camden_yardbird]

6 hours ago, notyourbuddy said:

Now when Dan signs a free agent we won't have to spend the entire season complaining about how we just wasted a 1st rounder.

Doesn't apply this year though.

[MDtransplant757]

39 minutes ago, Redskins Rick said:

No, but, we can still find something to complain about.

Isn't that what we specialize in?

 

[Aristotelian]

Let me see if I have this right.

Winners:

2017 and beyond free agents. Teams no longer have to give up #1 picks. Should reduce the disincentive to sign free agents across the board, and particularly for small market teams that only have to give up a #3 pick.

Second tier free agents. If I am signing Price to a $300M deal over 10 years, a draft pick is a pretty negligible price to pay. If I am signing Gallardo/Wieters/Trumbo to a 3-4 year deal, you are paying the same price for much less return. This should make it easier for second tier free agents to find a market even when hit with the QO. 

Small market teams. They now only have to give up a #3 pick to sign free agents, while big market teams have to give up a #2 and #5. The luxury tax is also increased, particularly for teams over the 90% threshold. 

Teams that are good at drafting. Even though there will no longer be #1 comp picks, there should be both more players receiving QOs, and more picks coming back from the big market teams that sign free agents. Teams that have good scouts might be able to get good value out of those #2 and #5 picks when they let their free agents walk.

Losers: 

2016 QO free agents. Teams may be inclined to wait until next year rather than give up a #1 pick this year.

Big market teams. No longer have to give up a #1 pick, but still have a pretty strong disincentive to signing free agents, costing them the #2 and #5. Arguably, with the baseball draft being such a crapshoot, the difference in value between a #1 and the #2/#5 is negligible.  

Team Friendly Extensions. By reducing the compensation hit, there is less incentive for players to stay with their current team, particularly second tier players like Wieters and Trumbo. While the #1 comp pick greatly limited the market for those type of players, they can now hit the market with more confidence that they will be paid their market value. 

 

[Camden_yardbird]

Anyone foresee some of this year's FAs who don't like their market to sign 1 year deals.  Advantages include a better QO system next year, higher luxury tax and if they got a QO this year the possibility they can't get one next year.  

Could affect someone like Wieters.

[MDtransplant757]

3 minutes ago, Camden_yardbird said:

Anyone foresee some of this year's FAs who don't like their market to sign 1 year deals.  Advantages include a better QO system next year, higher luxury tax and if they got a QO this year the possibility they can't get one next year.  

Could affect someone like Wieters.

Wieters could be a huge recipient of this. 

[Aristotelian]

6 minutes ago, Camden_yardbird said:

Anyone foresee some of this year's FAs who don't like their market to sign 1 year deals.  Advantages include a better QO system next year, higher luxury tax and if they got a QO this year the possibility they can't get one next year.  

Could affect someone like Wieters.

Wieters did not get a QO this year, so the time is now for him to hit the market.

[Larry18]

1 hour ago, Aristotelian said:

Let me see if I have this right.

Winners:

2017 and beyond free agents. Teams no longer have to give up #1 picks. Should reduce the disincentive to sign free agents across the board, and particularly for small market teams that only have to give up a #3 pick.

Second tier free agents. If I am signing Price to a $300M deal over 10 years, a draft pick is a pretty negligible price to pay. If I am signing Gallardo/Wieters/Trumbo to a 3-4 year deal, you are paying the same price for much less return. This should make it easier for second tier free agents to find a market even when hit with the QO. 

Small market teams. They now only have to give up a #3 pick to sign free agents, while big market teams have to give up a #2 and #5. The luxury tax is also increased, particularly for teams over the 90% threshold. 

Teams that are good at drafting. Even though there will no longer be #1 comp picks, there should be both more players receiving QOs, and more picks coming back from the big market teams that sign free agents. Teams that have good scouts might be able to get good value out of those #2 and #5 picks when they let their free agents walk.

Losers: 

2016 QO free agents. Teams may be inclined to wait until next year rather than give up a #1 pick this year.

Big market teams. No longer have to give up a #1 pick, but still have a pretty strong disincentive to signing free agents, costing them the #2 and #5. Arguably, with the baseball draft being such a crapshoot, the difference in value between a #1 and the #2/#5 is negligible.  

Team Friendly Extensions. By reducing the compensation hit, there is less incentive for players to stay with their current team, particularly second tier players like Wieters and Trumbo. While the #1 comp pick greatly limited the market for those type of players, they can now hit the market with more confidence that they will be paid their market value. 

 

The lose of draft picks is for exceeding the salary cap, not signing free agents.

[Aristotelian]

9 minutes ago, Larry18 said:

The lose of draft picks is for exceeding the salary cap, not signing free agents.

I thought it was for signing free agents but the pick depends on the size of your payroll. The luxury tax is the penalty for exceeding the thresholds. From the AP article:

A club signing a player who declined a qualifying offer would lose its third-highest amateur draft pick if it is a revenue-sharing receiver, its second- and fifth-highest picks (plus a loss of $1 million in its international draft pool) if it pays luxury tax for the just-ended season, and its second-highest pick (plus $500,000 in the international draft pool) if it is any other team.

A club losing a free agent who passed up a qualifying offer would receive an extra selection after the first round of the next draft if the player signed a contract for $50 million or more and after competitive balance round B if under $50 million. However, if that team pays luxury tax, the extra draft pick would drop to after the fourth round.

https://apnews.com/41de5400e505440cba0478fbac8a6ee4/MLB-players,-owners-reach-tentative-labor-deal

[Larry18]

3 minutes ago, Aristotelian said:

I thought it was for signing free agents but the pick depends on the size of your payroll. The luxury tax is the penalty for exceeding the thresholds. From the AP article:

A club signing a player who declined a qualifying offer would lose its third-highest amateur draft pick if it is a revenue-sharing receiver, its second- and fifth-highest picks (plus a loss of $1 million in its international draft pool) if it pays luxury tax for the just-ended season, and its second-highest pick (plus $500,000 in the international draft pool) if it is any other team.

A club losing a free agent who passed up a qualifying offer would receive an extra selection after the first round of the next draft if the player signed a contract for $50 million or more and after competitive balance round B if under $50 million. However, if that team pays luxury tax, the extra draft pick would drop to after the fourth round.

https://apnews.com/41de5400e505440cba0478fbac8a6ee4/MLB-players,-owners-reach-tentative-labor-deal

Got it. I think.

A small market team loses it's third round pick.

A large market team loses it's second round pick plus $500K in international draft $.

Any team that is over the salary cap loses it's second and fifth round pick plus $1M in international draft $.

 

[Aristotelian]

7 minutes ago, Larry18 said:

Got it. I think.

A small market team loses it's third round pick.

A large market team loses it's second round pick plus $500K in international draft $.

Any team that is over the salary cap loses it's second and fifth round pick plus $1M in international draft $.

 

That is my understanding of what teams give up when they sign a QO player. However, I think my post above has it wrong about the compensation. The team that loses the player gets a pick after 1st round if the contract is for $50M, after the 2nd round if it is less than $50M. I wonder if we will see an uptick of contracts for $49.5M plus incentives, options, etc. So if a team gives up a #2 and #5 to get a player, those picks don't simply go to the team that lost the player.