Tuesday, January 8, 2013

Mo knows: Qualifying offers

It's still premature, given that we're only a week into January, and as I mentioned before, we are talking about Scott Boras, when we talk about Kyle Lohse.

Back in August, once Jake Westbrook signed his deal, I wrote about a possible scenario involving a situation where Lohse stays with the Cardinals into the 2013 season.  The picture I painted described the Cards paying Lohse anywhere from $15M to $18M to keep him around, but is it possible he returns in 2013 for as (relatively) little as $13.3M?

Maybe so.

You may or may not know that the current (new) collective bargaining agreement (CBA) has changed some of the rules concerning the handling of free agents-to-be, in terms of non-tendering vs. tendering, draft pick compensation, and a new aspect: qualifying offers.

These changes are a part of the reason why the 3-team deadline deal that Cardinals GM, John Mozeliak pulled off in 2011 was such a big deal.  Much like the wildcard comeback from that year, there simply won't be another one like it.  The Cardinals garnered draft picks following the 2011 Championship season when they "lost" guys like Pujols, Octavio Dotel, Edwin Jackson, and others.

Under the rules of the new CBA, when a player is in the last year of his contract, and is set to become a free agent, the team is only compensated with a draft pick (previously belonging to the team with which the player decides to sign), if they make the player what's (now) known as a "qualifying offer".  Essentially, just deciding whether to tender or non-tender a player, the club has to decide if they will or won't offer the free-agent-to-be a one-year deal worth the average contract value of the top 125 players ("top" being defined by salary, not statistics).  For the 2012/2013 offseason, that's $13,300,000.

The Cardinals made Kyle Lohse that qualifying offer.  In part, because they really couldn't lose by doing so.  If he accepted the offer, he plays for St. Louis for one more year at a (bargain?) price of $13.3M.  That scenario seemed unlikely at the beginning of this offseason, with Hamel already signing his deal during the year, leaving Greinke as the FA pitcher headliner, with Lohse closely behind, and Edwin Jackson somewhere in the mix.

If Lohse (Boras) declined that offer, and signed a deal with another team (thought to be a much more likely scenario), not only would the Cards be "off the hook" for the $13.3M, but they would receive a draft pick from the team that Lohse ends up signing with.  With the pitching depth the organization seems to have right now, this probably wouldn't be a terribly painful option for the Cardinals.

The reasons Lohse hasn't "landed" yet aren't entirely clear.  In part, it could be his agent working his magic pitting real teams against mystery teams as he seeks a contract in the 24 years/$1.7B range.  But another reason could very well be this draft pick that the team must surrender to St. Louis by signing Lohse.  I'm not saying it's a deal-breaker, but there's little doubt that it's weighs in as a very real factor.

For a team to sign Kyle Lohse, they'll have to not only pony up big bucks, and probably more years than they're entirely comfortable with, but they'll also have to ship a draft pick out the door at the same time.  That could turn out to be a pretty high price!  No matter how the situation eventually unfolds, one thing seems clear: Mo has once again put the organization in a very strong position, whether Lohse is on the 2013 roster for the Cardinals or not.

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