The qualifying offer penalty
Had MLB and the MLBPA agreed on an international draft, the qualifying offer (QO) would have ended, but to no one’s surprise, they didn’t agree, so the QO and its draft-pick-penalties for signing a player who rejected a QO are still in play.
Beginning in the season after a team becomes a CBT payor, signing a player who rejected a qualifying will cost the team one or more selections after the first round of the next year’s Rule 4 Amateur Draft.
Teams are divided into three levels of forfeiture based on the team’s financial status.
- Teams that exceed the CBT in the prior year lose their second and fifth selections and $1M from their international bonus pool.
- If the same team signs a second player with a QO, it also forfeits its third and sixth draft picks.
- A team receiving revenue-sharing money loses its third-highest selection. If the team signs two, it loses its fourth pick as well,
- Teams not included in the first two tiers lose their second-highest pick and $500K from the international bonus pool.
- Signing a second player costs the team its third-highest pick and another $500K of international pool money.
The Atlanta Braves traded away or graduated some of their best prospects over the last two seasons. Winning the division pushes them toward the back end of the first round already makes it difficult to select from the best prospects; losing early selections and international pool money makes restocking the minor league system even more difficult.
An Atlanta Braves example
Numbers and lists of penalties can get confusing; here’s an example of the way the rules might affect the Braves.
Fangraphs projection of the Atlanta Braves CBT payroll commitment for 2023 at $227.9M, including estimates for arbitration and minor league salaries, and the team’s contribution to the player benefits plan, pre-arb player bonus pool, and 26-man payroll.
What would happen If the Braves were to bring Dansby Swanson back for the MLBTR estimate of seven years and $154M, an AAV of AA’s favorite contract amount, $22M, and added a RHH left fielder for one year and $10M.
To keep it simple, I’m rounding the Fangraphs’ estimate to $228M and saying that the team will create roster space by designating minor-league players who would make the league minimum of $720K.