The Weekly Rant: Qualifying Offer Trends

The qualifying offer has been talked about a lot lately.  Everyone has ideas on how to change the QO system so that it is more fair for players or teams or both.  While I think that there is plenty of room for improvement, I wanted to take a look at some data that incorporates the qualifying offer.

If you are nor familiar with the basics of the system, here's a good primer from MLBTR. So far, 23 players have received QO's, and 23 have rejected them. 10 players in 2012, and 13 players in 2013.  The chart below shows all of the the players, along with information related to the team that extended the QO:

Player	Year	Old Team	Payroll	Wins
Michael Bourn	2012	Braves	83.31	94
Nick Swisher	2012	Yankees	197.96	95
Adam Laroche	2012	Nationals	81.34	98
Rafael Soriano	2012	Yankees	197.96	95
BJ Upton	2012	Rays	64.17	90
Kyle Lohse	2012	Cardinal	110.30	88
Josh Hamilton	2012	Rangers	120.51	93
David Ortiz	2012	Red Sox	173.19	69
Hiroki Kuroda	2012	Yankees	197.96	95
Curtis Granderson	2013	Yankees	230.84	85
Robinson Cano	2013	Yankees	230.84	85
Ubaldo Jimenez	2013	Indians	80.26	92
Nelson Cruz	2013	Rangers	129.07	91
Shin-Soo Choo	2013	Reds	107.98	90
Mike Napoli	2013	Red Sox	151.15	97
Brain McCann	2013	Braves	92.25	96
Carlos Beltran	2013	Cardinals	117.69	97
Jacoby Ellsbury	2013	Red Sox	151.15	97
Hiroki Kuroda	2013	Yankees	230.84	85
Kendrys Morales	2013	Mariners	81.53	71
Ervin Santana	2013	Royals	84.07	86
Stephen Drew	2013	Red Sox	151.15	97
Averages			125.20	90.82

*Payroll Data from USA Today

As you can see, teams that extended qualifying offers were pretty well off financially and competitively. The average payroll of the teams for each of the free agents is over $125 MM (the Major League average team was spending around $105 MM per seasons during these years). The teams extending the QO averaged nearly 91 wins the previous season.

These numbers are a little higher than I would have thought.  We would expect good/higher-spending teams to have more players likely to receive large contracts than the rest of the league. But this data shows that bad/lower-spending teams have hardly participated in the process.  The only losing teams to make QO's are the under-performing 2012 Bobby V Red Sox (David Ortiz) and last year's Mariners (with the slightly anomalous Kendrys Morales).

Overall, better performing/higher-spending clubs are more likely to extend a qualifying offer, and are therefore more likely to receive benefits from the system.  These teams either receive draft pick compensation or increased leverage in retaining the player. If the qualifying offer was meant to benefit small market teams and competitive balance, there is no evidence that it does so.

Now let's look at the data on teams who have signed players under this system.  In this table, I have used the payroll and win amounts from the previous season for each team.  (For example, the Indians signed both Nick Swisher and Michael Bourn after each had turned down a qualifying offer following the 2012 season.  Therefore, the Indians' 2012 Payroll and Wins totals are listed.)

Player	Year	New Team	Payroll	Wins
Michael Bourn	2012	Indians	78.43	68
Nick Swisher	2012	Indians	78.43	68
**Adam Laroche	2012	Nationals	81.34	98
Rafael Soriano	2012	Nationals	81.34	98
BJ Upton	2012	Braves	83.31	94
Kyle Lohse	2012	Brewers	97.65	83
Josh Hamilton	2012	Angels	154.49	89
**David Ortiz	2012	Red Sox	173.19	69
**Hiroki Kuroda	2012	Yankees	197.96	95
Curtis Granderson	2013	Mets	75.40	74
Robinson Cano	2013	Mariners	81.53	71
Ubaldo Jimenez	2013	Orioles	99.83	85
Nelson Cruz	2013	Orioles	99.83	85
Shin-Soo Choo	2013	Rangers	129.07	91
**Mike Napoli	2013	Red Sox	151.15	97
Brain McCann	2013	Yankees	230.84	85
Carlos Beltran	2013	Yankees	230.84	85
Jacoby Ellsbury	2013	Yankees	230.84	85
**Hiroki Kuroda	2013	Yankees	230.84	85
*Kendrys Morales	2013	None
*Ervin Santana	2013	None
*Stephen Drew	2013	None
Averages			136.12	84.47

*Remains unsigned
**Re-signed with original team

From the chart, 5 players resigned with their former teams, while 3 players from this class remain unsigned.  But we still have some interesting numbers.  The average payroll of the teams signing these players was in fact higher than the teams that extended the offer.  However, these clubs had won 6 fewer games on average than the previously mentioned teams.  Overall, we still find that most of the teams who have participated in the the QO system are good/higher-spending.

Some have theorized that free agency hurts competitive balance, while previous studies have shown increased parity in the free agency era. This data does suggest that in the short term, premium free agents have moved from good teams to less good teams.  But in the long term, the flow of draft picks in the opposite direction could counteract or overwhelm the positive contributions of free agents. And again, it is mostly higher-performing, higher-spending teams that are involved in the first place.

It will be interesting to see how the qualifying offer will play out in future seasons.  There really isn't enough data to draw any solid conclusions.  But at the moment, it is hard to imagine the qualifying offer having any positive effect on competitive balance.  It seems that as  many commentators have stated, that the QO exists only as way to suppress free agent salaries.