As you have heard by now, assuming you were online at all for even a minute yesterday, MLB released the details of a brand new five-year collective bargaining agreement that changes the way a whole lot of things are done in baseball. Regardless of your feelings on the deal itself -- Matthew Kory outlined the various takes on it from around the web earlier today, if that's what you're looking for -- it's going to have implications on how free agency compensation works.
Following this off-season, compensation will no longer be determined by the Elias Rankings. This is a good thing! The Elias Rankings were not an accurate representation of player value. MLB would have been better off allowing one of their employees to huff paint thinner until they could venture on a vision quest to tell them if Darren Oliver were a Type A or Type B free agent.
Instead, compensation will be determined by qualifying offers of a certain monetary value. A qualifying offer of $12.4 million next winter will be enough to earn a player's team compensation, assuming he is signed by another club, and also that the player in question was on his previous team for the entire preceding season. What this basically means is no more acquiring Billy Wagners at the trade deadline, then earning those picks for the next draft when he leaves for another team following an arbitration offer. Wagner would have needed to be on the Red Sox all year long in order to get those picks, and Boston would have needed to offer him a contract worth a certain amount in order to qualify for picks.
That is not the case just yet, though, as the Elias system will get one last crack at ruining a veteran player's winter. Enter David Ortiz, who, as of tonight, will likely be offered arbitration by the Red Sox in case their contract negotiations with the 36-year-old slugger go awry. This would allow Boston to recoup compensatory picks should someone else sign him, but from the sound of it, that doesn't seem likely. Work with me here, though.
If the new system were in place already, rather than next winter, the Red Sox couldn't simply offer Ortiz arbitration. They would have to give him (at least) that $12.4 million qualifying offer (a figure derived from the average salary of the top-paid 125 players). Ortiz made $12.5 million in 2011, so it's likely that wouldn't be an issue with the Red Sox front office, given he had his best season in a few years. It would, however, keep them from offering him less money, were they so inclined, limiting Boston's options in regards to negotiations.
Were Ortiz to sign elsewhere following this offer, the Red Sox would get that team's first round pick. Assuming that team isn't one of the 10-worst according to win percentage (it used to be 15-worst) from the previous season, anyway. Basically, if the Astros, who need a DH when they move to the AL, decided to throw a multi-year contract at Ortiz for say, $14 million a year, since they were horrific the year prior, they wouldn't need to give up their pick. Meaning the Red Sox not only lose Ortiz, but they don't get anything in return for him, except money back in their budget.
It's a better system for players, for sure, as their old teams will have a difficult team low-balling them, while they may get bigger raises from new clubs who know they have to impress financially in order to outsell the appeal of the qualifying offer. It removes the stigma that many Type-A players, who would not receive a qualifying offer in the required realm from their old club, had when it came time to sign with a new club, post-arbitration offers.
Boston doesn't have to deal with that just yet, but should Ortiz sign another one-year deal, they will be faced with a situation like the above soon enough. It's a change for the better, though, as almost anything that eliminates the Elias Rankings would be.