Nationals decisions on Adam LaRoche and Edwin Jackson will be affected by qualifying offers, baseball’s new compensatory draft pick system

October 30, 2012

Dave Tulis / AP

With the new collective bargaining agreement last winter came a new system of compensating teams who lose players in free agency. The old system, in which players are classified as either “Type A” or “Type B” free agents, is history. The new system revolves the concept of a qualifying offer.

Now, teams must extend a one-year qualifying offer at a set salary to their own free agent player to become eligible for draft pick compensation. If the player rejects it and signs elsewhere, then the team receives a compensatory draft pick at the end of the first round. The team signing the player who rejected a qualifying offer loses a first-round pick, or a second-round pick if they have a top-10 first-round choice.

The price of the qualifying offer is the average salary of the top 125 free agents from the previous winter by average annual value, which this year works out to $13.3 million. The deadline for teams to make an offer is five days following the World Series at 5 p.m., which is Friday at 5 p.m. Players given a qualifying offer have until seven days after the World Series (Sunday) at 5 p.m. to accept or decline. If a player rejects a qualifying offer, he can still sign back with his same team.

For the Nationals, the qualifying offer should only come into play with two players: right-handed starter Edwin Jackson and first baseman Adam LaRoche.

The Nationals signed Jackson, 29, to a one-year, $11 million contract last winter, and he went 10-11 with a 4.03 ERA over 189 2/3 innings. He performed exactly as billed: A league-average pitcher who takes the ball every fifth day and leaves the impression he has not reached the ceiling his raw stuff suggests he possesses.

However, there is great value in a league-average pitcher with unquestioned durability, especially one who might, even after six full seasons in the majors, have some remaining potential to tap into it.

The Nationals’ giving Jackson a qualifying offer seems like a win-win. If he accepts, then voila, their rotation is essentially set for 2013: Stephen Strasburg, Gio Gonzalez, Jordan Zimmermann, Ross Detwiler and Jackson, with Tom Gorzelanny, Craig Stammen and a few Class AAA pitchers (Jeff Mandel, Yunesky Maya, etc.) as depth and insurance. A $13.3 million salary for a No. 5 starter isn’t cheap, but the Nationals’ other four starters are so relatively inexpensive they could certainly afford it. And Jackson would offer far better performance than a typical fifth starter.

If Jackson declined the qualifying offer, then they would still have the chance to sign him, but they could explore other avenues to fill the fifth spot of their rotation with the knowledge that losing Jackson would net them a valuable draft choice.

With LaRoche, the choice again seems easy to give him a qualifying offer. The sides have been discussing a contract to replace the mutual one-year, $10 million option for 2013 that LaRoche would turn down. LaRoche wants to stay with the Nationals for multiple seasons, and so he would likely turn down the $13.3 million offer anyway, even if he may not make that much per year on the open market. If he did accept it, there could be worse things than paying a Gold Glove-caliber first baseman that much after he hit 33 homers and drove in 100 runs. If he didn’t, the Nationals could keep trying to reach a deal with him, and if they couldn’t they would at least get a pick out of it.

The Nationals’ decision with LaRoche may be moot. They have until Saturday before their exclusive negotiating window with LaRoche closes. It’s possible, LaRoche said recently, they come to a deal with him before then.

In all cases, not just with the Nationals, a qualifying offer may also somewhat paradoxically serve to depress the market of a midrange free agent. If LaRoche rejected an offer, any team in the bidding to sign him would have to consider giving up a draft pick into the cost of signing him. LaRoche would be highly coveted on a free agent market bereft of quality first basemen. But how would knowing that the cost to sign him – or any free agent – includes a draft pick affect interested teams?

We will find out soon, as the hot stove season cranks up and the qualifying offer system makes its debut.

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