Qualifying Offer(s) Guidelines for 2017 offseason

[MattEmily]

Here's the guidelines for qualifying offers as of the offseason that follows the 2017 season.

Clubs wishing to receive compensatory Draft picks for the loss of a Free Agent can make a one-year qualifying offer, worth the mean salary of MLB's 125 highest-paid players to their impending free agents prior to the onset of free agency if and only if:

1. That player has never received a qualifying offer previously in his career.
2. That player spent the entire season on that team's roster (in-season acquisitions are ineligible).

A player will have 10 days to accept or decline the qualifying offer during which time he can negotiate with other teams to survey his value and if he accepts the offer then he will be signed for the following year at that predetermined rate but if a player rejects the qualifying offer he is free to further explore the market.

Any team that signs a player who has rejected a qualifying offer is subject to the loss of one or more Draft picks. While a team's highest first-round pick is exempt from forfeiture, any additional first-round picks as well as Competitive Balance picks are eligible. Three tiers of Draft pick forfeiture -which are based on the financial status of the signing team are in place to serve as a penalty for signing a player who rejected a qualifying offer:

• A team that exceeded the luxury tax in the preceding season will lose its second and fifth-highest selections in the following year's Draft as well as $1 million from its international bonus pool if such a team signs multiple qualifying offer free agents, it will forfeit its third and sixth-highest remaining picks as well.

• A team that receives revenue sharing will lose its third-highest selection in the following year's Draft. If it signs two such players, it will also forfeit its fourth-highest remaining pick.

• A team that neither exceeded the luxury tax in the preceding season nor receives revenue sharing will lose its second-highest selection in the following year's Draft as well as $500,000 from its international bonus pool. If it signs two such players, it will also forfeit its third-highest remaining pick.

The Draft-pick compensation is also based on the financial status of the free agent's former team.

If a free agent who rejected a qualifying offer signs a contract that is worth at least a guaranteed $50 million in total value and his previous club is one of the teams that receives revenue sharing, said club will be given a compensatory pick immediately following Round 1 in the next year's Draft. If such a club loses a free agent for a contract worth less than a guaranteed $50 million in total value, the club will receive a compensatory pick after Competitive Balance Round B which follows the second round.

If a qualifying-offer free agent's previous team is over the luxury-tax threshold, said team will receive a compensation pick after the fourth round has been completed. If a team neither exceeded the luxury tax in the preceding season nor receives revenue sharing, its compensatory pick will come after Competitive Balance Round B. The value of the free agent's new contract has no impact on the compensation pick in both of these cases.

Like standard Draft picks, compensatory picks in a given tier are ordered in accordance with the previous season's standings. If a team with MLB's worst record and a team with a .500 record both lose a free agent that signs for more than $50 million, the team with the worst record would receive the higher of the two compensatory picks.

Players who are unsigned after the start of the Rule 4 Draft in the year that follows the rejection of their qualifying offer are no longer tied to draft pick compensation and can be signed without their new club needing to forfeit a draft pick.

There were 9 players who rejected the offer last month.
Eric Hosmer
Mike Moustakas
Lorenzo Cain
Jake Arrieta
Wade Davis
Lance Lynn
Alex Cobb
Greg Holland
Carlos Santana

Out of those 9 only Santana has signed a contract so the Indians will get their comp pick following the 1st round of the draft.

Per the rules the Phils lose their 2nd highest pick (which is their 2nd round pick) and a $500k subtraction from their 2018-2019 international pool money.

[MattEmily]

Wade Davis has signed a deal with the Rockies he's one of the 9 who rejected a qualifying offer so here is what would be happening due to his signing.

As a team that benefited from revenue sharing and did not exceed the luxury tax in 2017 the Rockies will forfeit their third-highest selection in next year’s draft. For the Rockies who have a selection in Competitive Balance Round A their third-highest pick will be their second-round selection in 2018.

The Cubs meanwhile will secure a compensatory pick after Competitive Balance Round B. (While Davis’ contract is north of $50MM the Cubs are a revenue sharing payor thus disqualifying them for compensation after the first round of the draft.)