B.J. Upton and The Qualifying Offer | The Process Report

B.J. Upton and The Qualifying Offer

The World Series has finished and the silly season has begun. Eligible players can now file for free agency, and by next week they will be able to sign contracts with new teams. Having fulfilled his service time commitment, B.J. Upton will be one of those players.

The Tampa Bay Rays will have a decision to make in the coming days about whether to tender Upton the one-year qualifying offer, worth a guaranteed salary of more than $13 million—an average of the top-125 salaries in the league from the previous season. In doing so, the Rays would received a compensatory draft pick if Upton signed elsewhere. This simplified requirement replaces the Type A, Type B system of the past. If the Rays make Upton the offer, and he then signs with a new team, said team would forfeit their highest first-round pick—provided it fell outside of the top-10, otherwise they would surrender their next-highest pick. However, unlike the past, the old team does not receive the new team’s pick. Instead, they receive a single selection in the sandwich round between the first and second rounds.

The Rays have five days to extend the qualifying offer, and Upton then has seven days to make a decision. The question is, will the budget-restricted Rays take the eight-figure gamble in order to procure a draft pick?

Few things in life are certain, but it’s hard to foresee a scenario in that Upton fails to net a multi-year contract, meaning he should receive the tender. The risk comes with the money—Upton may not get the annual average salary he desires—and with the market—there are other center fielders available, and adding the draft-pick requirement to Upton may weaken his market. Still, Upton’s age and track record should make him an enticing target.

Even if Upton were to accept the offer, it would not be the worst scenario for the Rays. Tampa Bay could still trade Upton—think an inverse of the Rafael Soriano trade—or hold onto him and ride out the 2013 season before trying it all over again.  While the estimated $13 million price tag may be a lot for Tampa Bay, it would actually be below market value for some organizations. Cleveland Indians’ team president Mark Shapiro recently said he team calculated the current rate for one win on the free agent market at about $9 million. Now that is just one team’s valuation system, but it gives you a glimpse into how wild the free-agent market is.

Upton has been worth at least two wins above replacement level in each of the past six seasons, surpassing the four-win plateau in four of those years. The Rays can hardly afford open market rates; however, they would almost certainly receive a positive return on production should the unlikely scenario play out. In any event, deciding whether or not to tender an offer to Upton is just the first of many off-season decisions for Andrew Friedman and the Rays.

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