MLB Qualifying Offer: Why Players Say No to a Sure Thing

Picture your favorite team's best hitter getting offered $23.15 million for one season. No long-term risk, no haggling, just sign and play. Then picture him saying no. That is what the MLB qualifying offer produces almost every winter, and it explains why your team can lose a star and still come out with something in return.

This year the stakes are higher than usual. Eight players received the offer on November 2, and they have until 4 p.m. ET on November 17 to decide. Two weeks later, on December 1, the league's labor deal expires, and a lockout is widely expected to freeze free agency.

So how does the offer work, why does almost everyone reject it, and what does your team actually gain or lose? Below is the money math, the draft pick rules, and the short list of cases where saying yes is the smart move.

What the MLB Qualifying Offer Actually Is

The qualifying offer is a fixed, one-year contract a team can offer its own pending free agent. The price is not negotiated. As ESPN reported, it equals the average of the top 125 major league contracts for the season, which put it at $23.15 million this time.

That number climbs with the market. Last offseason it was $22.025 million, so the offer grew about 5% in a year. Back in the 2015 offseason it was $15.8 million. If you want a feel for how fast top salaries are rising compared with prices in general, run those two figures through our inflation calculator.

Not every free agent can get one. Two rules limit it:

• Same team all season. The player must have been with the club continuously since Opening Day. A player traded at the deadline cannot be tagged.
• Once per career. A player who has received a qualifying offer before can never receive another.

This winter's eight are David Bednar (Yankees), Seiya Suzuki (Cubs), Randy Arozarena (Mariners), Jake Bauers (Brewers), Trevor Rogers (Orioles), Ryan Jeffers (Twins), Brandon Lowe (Pirates) and Adrian Morejon (Padres).

Why Most Players Turn Down $23 Million

A one-year deal is a bet on yourself. A four-year deal is insurance. For a healthy player in his early thirties coming off a strong season, insurance almost always wins, and that is why roughly 89% of offers get rejected.

Suzuki is the clearest current case. On November 11, his agent Joel Wolfe said Suzuki will decline the Cubs' offer, as NBC Sports reported. He is 32, hit 26 home runs with a career-best .368 on-base percentage, and produced a career-high 5.1 bWAR. The expectation around the league is a four- or five-year contract paying a bit more than $23.15 million a year.

A worked example: one year versus four

Use round numbers to see the choice. Say Suzuki can get four years at $24 million a season on the open market.

1. Decline and sign: 4 x $24 million = $96 million guaranteed, starting now.
2. Accept: $23.15 million for next season, then free agency again at 34.
3. The gap to make up: $96 million minus $23.15 million leaves $72.85 million. To match the long deal, he would need to earn that over the following three seasons, about $24.3 million a year from ages 34 to 36.

Teams pay less per year for older players, not more. One bad injury in the one-year season could also wipe out the second contract entirely. The guaranteed $96 million wins on both counts, which is why his camp said no before the deadline even arrived.

The same logic applies to any investment where certainty has a price. A sure $23 million today looks huge until you compare it with what the alternative return on investment looks like across several years.

The Draft Pick Penalty That Follows a Player

The penalty is what gives the offer its bite. A player who rejects it carries a penalty to whichever new team signs him. According to MLB Trade Rumors' breakdown of the rules, the cost depends on the signing team's finances:

• Revenue-sharing recipients (smaller-market clubs) give up their third-highest pick in the next draft.
• Teams that neither receive revenue sharing nor pay the luxury tax give up their second-highest pick plus $500,000 of international bonus pool money.
• Luxury tax payers give up their second- and fifth-highest picks plus $1 million of international bonus pool money.

Signing a second tagged player doubles up the damage. A tax-paying club that lands two of them loses four picks.

What the losing team gets back

The former team receives a compensation pick when its player signs elsewhere, but where that pick lands also depends on money. A club that paid the luxury tax gets a pick after the fourth round, which is a modest return. A revenue-sharing recipient whose player signs for at least $50 million guaranteed gets a pick after the first round. Everyone else picks after Competitive Balance Round B, just before the third round.

That is why small-market teams treat the offer as a real asset. Pittsburgh, a revenue-sharing recipient on last year's list, could earn a pick right after the first round if Brandon Lowe leaves on a $50 million deal. The Yankees, a tax payer on that same list, would most likely get a pick after round four for Bednar.

When Accepting the Qualifying Offer Makes Sense

Last November broke the pattern. A record four players accepted the $22.025 million offer, Fox Sports reported: Trent Grisham, Shota Imanaga, Gleyber Torres and Brandon Woodruff. The previous high was three, in the 2015 offseason.

Look at what each one gained, and a pattern shows up:

• Grisham had earned about $5 million. Accepting gave him a raise of roughly $17 million after a career-best 34 home runs.
• Torres went from $15 million to $22.025 million, a raise of about $7 million.
• Imanaga went from $13.25 million to $22.025 million after a rough September and October.
• Woodruff was coming back from a shoulder injury and missed the postseason with a lat problem.

Each one had a reason the open market might undervalue him: one big season with a thin track record, a slump at the wrong time, or a health question. For those players, a one-year salary above anything they had earned beat a smaller multiyear deal weighed down by a draft pick.

There is a second benefit people miss. Because the offer is once per career, all four will hit free agency again with no draft pick attached. Teams can bid on them freely, which tends to raise the price.

The Lockout Clock Changes the Math This Year

This offseason adds a new variable. ESPN noted that the collective bargaining agreement expires on December 1 and the league is expected to lock out players, which would likely set off a rush of signings before that date. During a lockout, teams cannot sign major league free agents at all.

That squeezes the calendar. The decision deadline is November 17, leaving tagged players roughly two weeks to land a deal before the market could shut. A player who expects slow interest because of the draft pick attached to him has a real reason to grab the guaranteed $23.15 million instead of waiting out a freeze of unknown length.

The next labor deal could also rewrite the qualifying offer itself, since compensation rules have changed in past bargaining rounds. If you want the bigger picture on what owners are pushing for, our explainer on what a salary cap would mean for your team covers the main fight.

Frequently Asked Questions

How much is the MLB qualifying offer this year?

The qualifying offer is $23.15 million for one season. It is calculated as the average of the 125 highest salaries in the majors, up from $22.025 million last offseason.

What happens if a player accepts the qualifying offer?

He signs a one-year contract with his current team at the full offer amount. He becomes a free agent again after that season, and he can never receive another qualifying offer, so no draft pick is tied to him next time.

Do teams lose a first-round pick for signing a qualified free agent?

Usually not. Under the current rules, the signing team gives up its second- or third-highest pick depending on its finances. Luxury tax payers also lose their fifth-highest pick and $1 million of international bonus money.

How many players have accepted a qualifying offer?

Eighteen of 157 players accepted between the system's start after the 2012 season and this offseason. Four of those came last November, the most in a single year.

When is the qualifying offer deadline?

Players who received an offer on November 2 have until 4 p.m. ET on November 17 to accept or decline.

What to Watch Before November 17

The qualifying offer is a pricing tool dressed up as a contract. It forces your team to put a number on what a departing star is worth, and it taxes the club that takes him. Most players will reject it because a multiyear guarantee beats a single season.

Watch for the players most likely to break that rule: those with one standout year, a health flag, or a draft pick that might scare off small-market bidders. Then watch the December 1 deadline. If a lockout lands, the players who said yes in mid-November may look like the smartest people in baseball.