Major League Baseball is entering the second offseason of its most recent Collective Bargaining Agreement, which means the second offseason in which draft pick compensation no longer relies on "Type A" and "Type B" designations from the Elias Sports Bureau to determine how a team will be properly compensated for their departing free agents, but instead with a qualifying offer method. Each year the league averages the yearly value of the top 125 salaries in the game -- this year, $14.1 million -- and allows teams to offer that to each of their qualified departing players as a one-year deal. The exception is that an offer may not be extended if a player was traded during the season, like Matt Garza and Ricky Nolasco were this year.
If the player declines the qualifying offer, then the team that signs him loses their first-round draft pick, unless the team's finish was poor enough to leave them with a top-ten pick in the draft, in which case they lose their second-round pick instead. If the team signs additional protected players, they lose their next highest pick all the way down until they stop signing free agents that declined qualifying offers.
Meanwhile, the teams whose free agents are walking receive not the picks that were lost by the teams signing their former players, but picks in the supplementary rounds between the first and second rounds of drafting (after the normal first round, but before the competitive balance round). All of this was devised as a way of permitting teams to try to keep valuable, free agent-eligible players for one more season while providing them with compensation if they left -- a sort of halfway-compromise between the NFL's franchise tag and the way the system used to work.
The crucial difference between the qualifying offer and the franchise tag, of course, is that an NFL player can't decline the tag. An MLB player has every right to just walk away from the offered one-year deal, with the only caveat being the theory that since any team that signs them (except their old team) would have to give up a top draft pick, it would depress the market on their services. MLB players, to a man, have yet to show much indication they (or their representation) put any credence in that theory.
Since the end of the 2012 season, 22 players have been extended qualifying offers by their teams. Exactly zero of them have accepted said offers. I was relatively optimistic that one or two players -- notably Ubaldo Jimenez or perhaps Mike Napoli -- would accept the QO this time around, but it didn't work out that way. The closest anyone has ever come to accepting a qualifying offer is David Ortiz last season, if only because he didn't openly decline the offer before returning to the Red Sox anyway.
Hiroki Kuroda declined the Yankees' $13.3 million QO after 2012 to instead sign a $15 million deal for 2013 with New York, and it's expected that he'll do something similar again this season unless he retires or returns to pitch in Japan. And players like Ervin Santana and Kendrys Morales flout the expectations of a depressed market for their services with a draft pick tender attached -- Santana is reportedly looking for something in the neighborhood of five years, $100 million, and Morales, a designated hitter coming off a fairly mundane year for a bad baseball team, is represented by agent Scott Boras, who sees a three- to four-year deal somewhere in his client's future.
Boras is most likely correct, which is the usual state of affairs when it comes to Scott Boras and baseball player contracts. Of 2012's nine QO candidates -- Ortiz, Kuroda, Michael Bourn, Josh Hamilton, Adam LaRoche, Kyle Lohse, Rafael Soriano, Nick Swisher and B.J. Upton -- only Kuroda settled for a one-year deal, and that likely had more to do with player preference than any market forces at work. Every other player received multiple years, with the shortest of them being Ortiz's two-year deal and LaRoche's two-year deal with a third year club option.
Some of the players didn't quite get the money they'd been posturing for -- Swisher, for instance, signed for four years, $56 million and Bourn for four years, $48 million after sources in both camps made noises about seeking six or seven years at nearly $100 million total value. Even so, the supposed doomsday scenario where guys like LaRoche and Lohse simply wouldn't be able to find work outside of a one-year deal with their old club, looking forward to another season where if they performed well they'd only be slapped with the qualifying offer again, didn't come to pass. LaRoche did end up back with his old team, but on a multi-year deal much better than the qualifying offer would have been. Lohse settled into Milwaukee on a three-year, $33 million deal that wasn't what he wanted when he entered the offseason and is probably slightly below market for his services should he continue to perform at the current pace, but it's difficult to argue he was cheated out of millions.
The most important signings of last offseason from the qualifying offer bunch, however, were Swisher and Bourn. Both men signed with the Cleveland Indians, who had finished 68-94 in 2012 and had the fifth overall pick in the 2013 draft. Under the new rules, that pick was protected, meaning that to sign Swisher and Bourn, the Indians needed only give up their second and third round picks, not their first and second rounders.
Swisher and Bourn were a large part of the Indians' turnaround to a 92-70 team in 2013 and a playoff appearance in Cleveland, even though they had "down" years from their contract seasons a year before. They allowed Cleveland to shuttle replacement-level filler like Shelly Duncan and Casey Kotchman off the roster and, along with a series of smart trade acquisitions (Yan Gomes) and other low-key free agent signings (Scott Kazmir, Ryan Raburn, and Jason Giambi, somehow), essentially reload their team without burning down their farm system or going through a lengthy rebuild.
The most instructive offseason for teams with protected first-round picks looking to get back into the race quickly isn't what the Boston Red Sox did last winter -- many of the most valuable pieces of this year's World Series champions were already on that team, they just were hurt or bad in 2012 -- but what the Cleveland Indians did: burn your non-first round picks to get guys who you'd otherwise be outbid for on multi-year deals to shore up your roster, be active at the margins of free agency (especially with non-roster invitations to Spring Training) and keep an eye on the trade market for a deal or two (which you, as a theoretical professional general manager, are of course always doing).
Whether or not anyone copies Cleveland's tactics and finds success with it remains to be seen. The Mariners, Phillies, Cubs, and White Sox are all in position to attempt something like this, though the Phillies and White Sox farms are in such a state that perhaps even a second and a third rounder are too much to lose at this stage in the game. The blueprint is there. All that's left is for someone to step up, execute, and get a little bit lucky.