It took about a year but it seems teams are getting a hang of the new collective bargaining agreement. The ins, outs, and wrinkles are starting to show up as teams make moves and do their very best to tiptoe between the luxury tax raindrops.
The complicated calculus of the qualifying offer is tough to figure from the outside. What goes into the team’s decision? The deadline for clubs to tender offers to their potential free agents is 5pm today. While some are no brainers, a few front offices face some very tough, very complex decisions.
The players on either extreme of the FA spectrum are easy choices. Robinson Cano will receive a qualifying offer, as will Shin-Soo Choo and Jacoby Ellsbury. They are among the top names in this year’s class, playing facing potential nine-figure pay days. The option to turn down a guaranteed one-year, $14.1 million contract is an easy one for them.
Likewise, the fringiest of eligible candidates can only dream of a deal with so many total dollars. A player like Matt Thornton is not waiting by the phone to hear if the he’s getting a qualifying offer. Matt Thornton isn’t actually eligible to receive a QO as he was traded midseason.
But the players in the middle are where things get dicey. Beyond the Box Score went through some of the reasons and cases that make the QO process so difficult to navigate for so many teams.
Using Stephen Drew of the Red Sox as their example of a very difficult case to read, the BTB pieces suggests Drew might find a multi-year offer with a lower average annual value on the free market. Then again, the draft pick compensation that accompanies players receiving Qualifying Offers muddies the waters of the free market even further. How much of a tax might a QO exert on Drew’s value?
One name receiving a lot of attention is Josh Johnson. The Blue Jays brought in Josh Johnson as part of their blockbuster trade with the Miami Marlins, hoping the potential free agent would stay healthy and provide some quality innings for a team with designs on the playoffs.
Instead, Josh Johnson was a total bust in Toronto. He made just 16 starts and each seemed more miserable than the last. He season ended early after he fully succumbed to his barking elbow, a snapshot of the Blue Jays depressing 2013 campaign. A qualyfing offer for a player with an ERA greater than 6.00 is completely out of the question, right?
The Blue Jays kept close watch on Johnson as he rehabbed and recovered from his elbow injury. They know, better than any other team save the Marlins, Johnson’s health status. If he’s healthy, Johnson will receive countless offers from teams every where. The demand for pitching in baseball could drive the big right-hander’s asking price beyond the qualifying offer threshold.
But there is more to signing a player like Josh Johnson or Johan Santana than just hoping he returns value on any deal he inks this winter. For a team like Toronto, the cost/benefit analysis is complicated.
Obviously a healthy Johnson helps the Jays win more ball games. After their significant outlay of cash for new talent last winter, we could conservatively say the Jays are in a “win now” mode. But as the 2013 (and 2012) seasons in Toronto demonstrate, the reverberations from pitcher injury echo well beyond the single player’s contract status.
If Johnson comes back to Toronto and cannot even make 20 starts, how far down their depth chart must the Jays reach to make up those extra starts? If Johnson is a dud again next season, aren’t the costs to the team greater than just the lost $14MM in salary. Given the recent history in Toronto, another lost season will start to cost people their jobs in addition to another pile of losses and disappointment.
On the other hand we have the case of the 2013 Cleveland Indians. What kind of price can they put on the 29 starts Scott Kazmir gave them out of the blue? In addition to the games he helped them win, it gave the Tribe time to keep Danny Salazar in the minors until he was ready in addition to keeping Trevor Bauer out of the a Major League rotation. Does Cleveland make the wild card play-in game with Trevor Bauer making 10 more starts and Kazmir making ten fewer?
As said above, the calculus on these deals are more complicated than just determining the marginal surplus value. Some teams can afford to roll the dice with “buy low” lottery tickets like Johnson and Santana. Others cannot stomach the reality that sees the guaranteed money go up in smoke – along with their entire rotation.
It’s tough and might offer a telling look at the future of baseball economics. If suddenly cash-rich teams jump all over these risky pitchers and free agents, the QO math will shift next season. It’s a messy business. From surrendering draft picks to the real value to having a player on your roster to making determinations on health and fit within a new team’s culture, free agency really is a minefield, isn’t it?