Qualifying Offers in 2014

Now that all of the qualifying offers are in, we can look and see if teams are changing their strategies when it comes to giving players qualifying offers. I argued last year that teams were not aggressive enough in using this tool, as there were many more players that could have received a qualifying offer. The most obvious name that should have received a qualifying offer last year is Jhonny Peralta who received a 4 year/ $53 million dollar contract from the Cardinals. Even though the Tigers didn’t want him to be their shortstop in 2014, he clearly had significant value in the industry. Worst case for the Tigers, he accepts the qualifying offer, and you move him later in a deal.

Another no-brainer for me was the Pirates offering a qualifying offer to A.J. Burnett. He was a workhorse for the team in 2013 and the qualifying offer was actually lower than his 2013 salary (although the Pirates were paying significantly less). By giving a qualifying offer the Pirates ensure they either get a front-end starter for them on a one-year deal, get a draft pick, or by attaching a qualifying offer to him they depress his value in the market and they could work out a two year deal at a lower rate. Again there appeared to be no downside for them.

Setting aside the fact that no player has yet accepted a qualifying offer, I am of the belief that getting a player on a one-year deal even if it is a slight overpay is a better move than paying the going rate for a free agent on a multi-year deal to replace them. It is obviously tougher for a team like the Rays or Pirates to employ that strategy than teams like the Yankees or Tigers who have the flexibility to fit the $15 million contract in their payroll. If you know you are going to have to jump into free agency to replace the guy you are losing would you rather pay 4 years/48 million for a Ubaldo Jimenez/ Ricky Nolasco type or just pay the $15 million for one year and have infinitely less risk? If your guy has another good year you can extend another qualifying offer, and if they don’t you can cut bait without the commitment for another few years. All this presupposes the player accepts the qualifying offer, if not you get a free draft pick for nothing.

The other side of this is, should players be more willing to accept qualifying offers? After seeing what happened to Kyle Lohse, Stephen Drew, Kendrys Morales, and Ervin Santana, players might be more inclined to take the payday than head into free agency with the pick attached to them.

The qualifying offer this year that surprised a lot of people is Michael Cuddyer. I think this was a good, aggressive move by the Rockies. Cuddyer has produced when healthy, and has the versatility to play both outfield and first base for them next season. He is an older player you feel good about on a one-year deal. Before the qualifying offer most people thought would probably get a two-year offer from a team like the Mets, but by extending a qualifying offer it significantly reduces his market and your competition. Although the qualifying offer is about $5 million more than his previous high salary, it seems like a good deal for the team and obviously the player.

Another qualifying offer that surprised some people after failing to offer one to Burnett last year was Francisco Liriano. This is another case where the team is in good shape either way. Liriano was great in 2013, and although he regressed some in 2014 was still a solid starter. He should definitely be in line for a three- or four-year deal in the $12 million dollar range. The Pirates either get their #2 starter for 2015 or they get a draft pick. The player either gets a higher salary than he would otherwise get, or he can enter free agency and get more years at probably a lower average value.

It will be interesting to see how players react to their qualifying offers this year. Most people believe that Cuddyer will certainly accept, but will anyone else? If more players accept this year than it could change the strategy moving forward, but if it continues on the same path than again next year teams should throw out more qualifying offers and see what happens.