At the much-discussed press conference earlier this month with the Phillies' top three decision-makers, Andy MacPhail referenced lost draft picks when the topic of drafting/player development failures came up.
He pointed out that in the 2018 draft, the Phillies did not have a second- or third-round pick because of the signings of Carlos Santana and Jake Arrieta the prior offseason. They lost their second-rounder in 2019 with the Bryce Harper signing.
The Phillies lost these picks because all three players were extended qualifying offers by their previous teams.
Here's a refresher on the qualifying offer process, which directly affects free agency every year.
• The qualifying offer is the average of the top 125 salaries in baseball. This year, for the first time, it decreased. It was $17.9 million last offseason and $17.8 million this time.
• A team extends a qualifying offer to a player it would either like to keep or look to obtain draft pick compensation from losing. The Nationals know that Anthony Rendon will reject the qualifying offer, thus it's a no-brainer for them to extend it to ensure they receive a high draft pick if they lose Rendon.
• Sometimes, it doesn't work out. The Phillies gave Jeremy Hellickson a qualifying offer and he accepted it in November 2016 for one year and $17.2 million when it became clear a better market for him wouldn't develop. A similar situation could apply this winter to a free agent like Didi Gregorius, who may be good enough to warrant a qualifying offer but may also prefer to take the big one-year salary to prove his worth for future free agency.
• Teams do not lose their first pick when signing any free agent. The highest pick a team can lose is its second pick. If a team signs two players who were given qualiying offers, it loses its next-highest pick. This is why the Phillies lost a second and a third to sign Santana and Arrieta. The second-rounder was forfeited to sign Santana; the next-highest pick (third) was forfeited for Arrieta.
A team with a relatively weak farm system like the Phillies should want to keep every pick, especially with a new scouting director coming in. But it's not always realistic. There are top-notch, win-now free agents available this offseason. You know all the names: Rendon, Gerrit Cole, Josh Donaldson, Zack Wheeler, Marcell Ozuna, potentially J.D. Martinez and Stephen Strasburg.
Some players cannot be extended a qualifying offer. This applies to players who have already received one and players who were traded within the previous season. Mike Moustakas and Yasmani Grandal are ineligible for the QO because they already played under it. Nicholas Castellanos and Yasiel Puig are ineligible because they were traded during their walk years.
The Phillies shouldn't and probably won't let the qualifying offer affect their decision-making with Rendon, Cole or Strasburg. Where it gets interesting is with a player like Donaldson, who is very good but whose production can also be found elsewhere via trade or the right free-agent signing. Donaldson is better than Moustakas, but is he better enough to also justify losing a high pick? The answer may still be yes but it's something the Phillies will surely weigh throughout the offseason (if Moustakas opts out of his remaining $11 million with Milwaukee).
The top of the market should develop slowly this offseason. Strasburg, if he opts out, would benefit from waiting until Cole signs. Someone like Donaldson may want to wait until the market clears up for Rendon because his leverage would then shoot up. The Phillies struck quickly two offseasons in a row with the signings of Santana and Andrew McCutchen. This time around, the earliest developments could come in the relief and older starting pitcher markets.
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