We may be seeing the last week with Eric Hosmer, Mike Moustakas, Lorenzo Cain, Alcides Escobar, and Jason Vargas in a Royals uniform. All are eligible for free agency this winter, and while the Royals insist they would like to bring one or two players back, they almost certainly will not be able to bring everyone back.
The departure of any key players won’t leave the Royals totally empty-handed however. Baseball provides compensation to teams losing free agents through draft picks. There was some confusion initially as to how the new labor deal affected the free agent compensation process, which we tried to clarify. We even made a nice flowchart to understand the process.
The Royals are a revenue-sharing recipient, so to receive a sandwich draft pick after the first round, the Royals simply have to make a Qualifying Offer, and then hope the player receives a contract of $50 million or more. If the player does not get a contract that large, the Royals would get a sandwich pick after the second round.
Some have wondered, “hey, won’t a team sign players to $49 million contracts to get around this?” but there really isn’t a strong incentive to do that. The compensation the signing team gives up for signing free agents is not tied to the same compensation system for the team losing a free agent (you lose a third-round pick unless you are over the luxury tax threshold, then you lose a second- and fifth-round pick). The only incentive is you may screw over an opponent by giving them a lower draft pick, but you may also lose signing that free agent if you are outbid, so I don’t anticipate that happening much.
So the Royals have to make a Qualifying Offer, what the heck is a Qualifying Offer? It is a one-year tender, offering to pay the departing free agent the average of the top 125 salaries in baseball. For 2017, it will be $18.1 million. The player has the option to accept the offer (which is rare, but has happened recently, most notably by Matt Wieters, Colby Rasmus and Brett Anderson), which signs the player to one more year at that salary. The player can also reject the offer, but still negotiate with the club on a different deal.
However, to receive draft pick compensation for a player, the offer must be rejected and the player must sign elsewhere. The trick to receiving draft pick compensation is calculating (a) what is the likelihood a player will reject the offer; (b) what are the implications if the player does accept the offer? The Royals will have to decide whether to make Qualifying Offers within five days after the conclusion of the World Series. Let’s take a look at the decisions the Royals must make.
Hosmer seems like a slam-dunk case to make a Qualifying Offer to. He is just 27 years old, very young for a free agent, and will be looking for a huge, multi-year deal, especially after coming off a career year. He will be one of the most coveted free agents, and with Scott Boras representing him, will certainly reject a one-year tender. On the very unlikely scenario he accepts the Qualifying Offer, the Royals would love to have him back on a one-year deal. It is a no-brainer to make him a Qualifying Offer.
Moose is perhaps not as much as a slam-dunk as Hosmer, but he’s pretty close. Moustakas will also be quite young, is coming off a career-best power season, and will be seeking a long-term deal. There may be some concerns about his knee after he re-aggravated an injury late in the year, but he has shown he can at least stay on the field, and an off-season of rest should do him good. The Royals would also love Moose back on a one-year deal, so there would be no concerns if he accepted the offer.
Things start getting a bit trickier with Cain. He seems like he should be in line for a solid multi-year deal. But he will be 32 next April and has a long history of injury. Some have compared him to Dexter Fowler, who received a five-year, $82.5 million contract from the Cardinals last winter, but Fowler initially had much smaller offers when he hit free agency the previous season, opting to return to the Cubs on a one-year deal. Cain will not have the luxury of testing the waters first to decide on his Qualifying Offer - players have just ten days to accept or reject it.
Still, Cain will be one of the best outfielders available in free agency, joining J.D. Martinez and likely Justin Upton. It seems likely he would reject the Offer and take his chances in the open market. And if he did return on a one-year deal, the Royals would happily take him back, especially with no obvious replacement in center. There is a small concern the Royals would not be able to afford it if Hosmer, Moustakas, and Cain ALL accepted their Qualifying Offer, but the odds of that happening seem, well, less than that of the world ending next month.
Jon Heyman of FanRag writes that the Royals “will debate” whether or not to make a Qualifying Offer to Jason Vargas, but it seems very unlikely to me. The Royals seem to float out this possibility every year on a player that really has no business getting a QO - last year it was Edinson Volquez. Vargas will be 35 in February, and had a very poor second half. He is also a Tommy John surgery survivor, a big health risk for potential bidders.
Still, you never know how the pitching market will go, and perhaps the Royals will gamble that Vargas is expecting one last multi-year contract. Players can be deluded into inflating their own sense of value on the market (remember Ervin Santana expecting a $100 million contract?). And perhaps the Royals would even welcome Vargas back on a one-year deal, even if $18 million would be a significant overpay (Vargas was worth just over $13 million this year, according to Fangraphs).
Alcides Escobar is not going to get a Qualifying Offer, and I’m not even sure he’s likely to depart. Alcides will be here forever. The Royals cannot make a Qualifying Offer to Melky Cabrera or Trevor Cahill, since they did not spend all season with the club. Generally, only elite relievers are given Qualifying Offers, so don’t expect any for Mike Minor or Peter Moylan.
Aside from Hosmer and Moustakas, who else should get a Qualifying Offer?
This poll is closed
Cain and Vargas