The Qualifying Offer System, Macbeth, and Religious Morality

The current collective bargaining agreement between Major League Baseball and the Players' Association ushered in a new era of compensation for teams that lose a top player to free agency: the qualifying offer. It used to be that the Elias Sports Bureau would simply rank some free agents as top players, either in the A tier or the B tier. A team signing a type A or a type B free agent would forfeit its top draft pick; the player's former team would get that pick, and for a type A free agent they'd also get a bonus compensation pick after the first round of the draft. Now, each team is allowed to make a "qualifying offer," defined as being around the 75th or 80th percentile of all MLB salaries or something (and in practice around $13 or $14 million dollars the first two years), to any or all of their departing free agents. If the player declines a qualifying offer, then any team that signs them (other than, of course, their original team) forfeits their top available, unprotected draft pick, and the offering team gets a compensation pick. The top ten picks are protected.

Two years in, this system has come in for a ton of criticism. In particular, teams have been willing to make qualifying offers to mid-range free agents such as Kyle Lohse, Nelson Cruz, Kendrys Morales, and Stephen Drew. Unlike an elite free agent, these players have trouble finding much of market if their buyers also have to surrender a top draft pick. We've seen these players waiting until spring training had already started to sign, and it's speculated that it won't be long before a qualifying offer player waits until mid-season, after the draft has taken place and the compensation issue is off the board, to sign. Currently, Morales, Drew, and Ervin Santana have yet to sign, with actual spring training baseball less than a week away.

Another line of criticism, however, has emerged from this season. Of the thirteen qualifying offer free agents this offseason, four have signed with the New York Yankees. (Carlos Beltran, Jacoby Ellsbury, Brian McCann, and Hiroki Kuroda, although he was a Yankee to begin with.) Two more have signed with the Baltimore Orioles (Ubaldo Jimenez and Brian McCann.) Of the four others who have signed, two signed with teams whose first-round picks were protected, Curtis Granderson to the Mets and Robinson Cano to the Mariners, and one, Mike Napoli, re-signed with his current team, the Red Sox. Only one team so far has signed exactly one qualifying offer free agent from another team and forfeited their first-round pick to do so, the Texas Rangers, signing Shin-Soo Choo.

What we see, in other words, is that already having signed one qualifying offer free agent makes signing the next one look a lot more appealing, because it's just your second-round pick you're surrendering. Trading your top one draft pick (and market salary) for one top free agent is a worse deal than trading your top two picks (and market salary) for two top free agents, because the draft picks have steeply declining value while the free agents do not.

Why do I mention this, and what does it have to do with Macbeth or religious morality? An excellent question. (In the unlikely event you haven't read Macbeth, read no more.)