Since we just looked at what teams should receive in draft compensation if they lose a free agent who rejected a qualifying offer, now it’s time to explore what each team would have to give up to sign a QO-rejecting free agent.
To summarize how it works, if a free agent has played with a team through the entire 2024 season and has never received a qualifying offer in the past, he is eligible for a QO within five days of the end of the World Series. The qualifying offer is a one-year deal worth the average of the salaries of the 125 highest-paid players in the majors, and this winter the QO is worth $22.025 million. An eligible free agent can simply accept the QO and thus avoid the free agent entirely, but if he declines the QO, his former team is now eligible for draft pick compensation if the free agent signs elsewhere. This only affects qualified free agents from other teams, as a club can re-sign its own qualified free agents without penalty.
Here’s the (mostly established) breakdown of what each team will have to give up if they sign a qualified free agent.…
Revenue sharing recipients: Diamondbacks, Rockies, Reds, Brewers, Pirates, Marlins, Athletics, Mariners, Tigers, Royals, Twins, Guardians, Orioles, Rays
Should either of these clubs sign a qualified free agent, they will have to give up their third-highest selection in the 2026 draft. Since most of these smaller market teams are part of the Competitive Balance bonus rounds of the draft, their third-highest pick likely doesn’t mean their third-round pick, and the situation could become even more complicated if either team trades on their CBR pick. The Competitive Balance selections are the only draft picks eligible to be traded – for the 2025 draft, a total of five picks over the two CBR rounds were made by teams that acquired these selections in trades before draft day.
These lower-spending teams typically don’t spend on bigger-name free agents, but last season we saw the Diamondbacks sign Corbin Burnesand the Athletics (!) board Luis Severino. The Tigers also tried to land Alex Bregmanand Detroit may since feel more pressure to complete the deal in a splash this winter Pull Skubal is just a year away from free agency. The Orioles or Reds could be candidates to spend a little more than normal, with Cincinnati trying to build on a playoff appearance and Baltimore trying to bounce back from a disappointing 2025. Seattle could also explore qualified free agents, but the M’s are more likely to focus on re-signing one of their own guys first. Josh Naylorwho does not qualify for a QO.
Teams that do not receive revenue sharing funds and have not paid the competitive balance tax: Giants, Cardinals, Cubs, Braves, Nationals, Rangers, Angels, White Sox
To sign a qualified free agent, these teams would have to give up their second-highest pick from the 2026 draft, as well as $500,000 from their bonus pool during the next international signing period.
The rebuilding Cardinals and White Sox won’t spend much in free agency. The same is very likely true for the Nationals, whose own rebuilding period will likely be extended as new president of baseball operations Paul Toboni will need time to evaluate (and overhaul) the organization. Texas plans to either cut spending or reduce payroll costs.
Under Alex Anthopoulos, the Braves have generally been more inclined to build their roster through trades or their own farm system rather than long-term free agent deals, but Atlanta could change tactics after a losing season in 2025. The Angels figure to be active in free agency, even if spending more on a qualified free agent isn’t necessarily on the radar. San Francisco signed a qualified free agent Willy Adames last winter, and are again expected to check in at least many of the big free agent names. There doesn’t seem to be much optimism that the Cubs will re-sign Kyle Tuckerbut they were able to respond to a Tucker departure by making several other high-profile signings.
Part of the equation for these clubs and the clubs in the next two categories could be what other picks they get this winter to balance their draft capital. For example, if Tucker declines a QO and signs elsewhere, the Cubs will receive a compensatory pick just before the start of the third round of the draft. While a lower selection than whatever Chicago’s second-highest pick would be, getting another draft pick and then losing a pick to sign a qualified free agent makes it somewhat of a wash for the Cubs.
Teams in limbo: Astros
As noted in the last post, it won’t be known until December (when luxury tax numbers are officially calculated by the league) whether or not the Astros have managed to sneak under the $241 million tax threshold. Grid source Houston has something below the threshold in the meantime Cot’s Baseball Contracts the Astros have something going for them. Given this discrepancy and the small margins involved, we will keep the Astros in their own special grouping until the league releases the official Competitive Balance Tax numbers in December.
Because Houston was a taxpayer in 2024, the Astros might have reinstated their CBT status if they had indeed been able to stay under the $241 million mark. Being a dual payer means an escalating tax rate, and that tax bill would continue to escalate if the Astros were to cross the $244 million threshold again in 2026. Caveat: The collective bargaining agreement expires after the 2026 season, so the qualifying offer system or luxury tax system could very well be tweaked or even heavily changed in a new CBA, so repeater tax status could no longer be a concern for the Astros or other teams.
Staying under the 2025 tax line also means the Astros could be more willing to sign qualified free agents, although their taxpayer status last winter didn’t stop the team from signing Christian Walker.
As noted in the previous post, the Rangers could end up as taxpayers and the Red Sox may have dipped below the tax line, depending on the league’s final calculations. We’ll stick with both teams in their current categories for now, as Cot’s and RosterResource kept Texas just under the tax line, and both sites kept the Red Sox slightly above the line.
Competing balance taxpayers: Padres, Dodgers, Mets, Phillies, Red Sox, Yankees, Blue Jays
As you might expect, these teams face the harshest penalties. To sign a free agent who rejects QO, these clubs would have to give up $1 million in international bonus pool money, as well as two draft picks – their second- and fifth-highest selections in the 2026 draft.
All seven clubs are clearly in win-now mode, so the increased penalties shouldn’t be a major obstacle to pursuing qualified free agents in most cases. (The Padres are likely the exception because they operate within a smaller salary range.) Because each team would prefer to keep their draft picks if they can help it, taxpayers can focus on non-qualified free agents who aren’t tied to draft compensation. For example, while the Dodgers are expected to at least explore the market for Tucker, Los Angeles could consider a number of other free agents before zeroing in on the outfielder who will cost the most in terms of contract size and additional draft penalties.
Since re-signing your own Free Agent who rejects the QO carries no penalty, this could make some of these clubs more inclined to retain their own impending free agents rather than look for new talent. Bregman and the Red Sox have a mutual interest in a reunion, and the Phillies have made their desire public Kyle Schwarberand the Blue Jays will no doubt be keeping an eye on it Bo Bichette.
Additionally, should a club sign more than one qualified free agent, they will have to forfeit their next highest draft pick. Signing two QO-waiving free agents would require the revenue-sharing group to give up their third- and fourth-highest picks in the 2026 draft. The teams that do not exceed the CBT or receive revenue sharing funds would have to give up their second and third highest picks, as well as an additional $500,000 from their international bonus pool. The luxury taxpayers would face a stiffer penalty if they lose four draft picks — their second, third, fifth and sixth highest selections.
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