As Hot Stove season gets underway, it's important to remember that Major League Baseball is operating under a new Collective Bargaining Agreement that was agreed upon last offseason, and within that CBA are new provisions for free agents, qualifying offers and Draft-pick compensation.
Here's a handy FAQ to help you understand the new rules and how they apply.
Which free agents will be tied to Draft-pick compensation?
As has been the case since the 2012-16 CBA, only those who turn down the one-year qualifying offer from their clubs will have compensation attached to them. Those offers must be made by the club within the first five full days after the World Series ends, and players then have 10 days to accept or decline the offer, during which time they can negotiate with other teams. That means that offers must be made by Monday and accepted or rejected by Nov. 16. The amount of the qualifying offer is the mean salary of the league's 125 highest-paid players. It was $17.2 million last offseason and will be $17.4 million this time around.
Which players are eligible for the qualifying offer?
Only those who …
A. Have never received a qualifying offer previously in their career (this is a new wrinkle in the CBA), and
B. Have spent the entire season on that team's roster (so in-season acquisitions are ineligible)
The "A" stipulation here doesn't appear to have any impact on this offseason. Jose Bautista, for instance, isn't eligible to receive a qualifying offer because he got one from Toronto last offseason, but given his age (37) and the fact that he slugged a career-low .366 in 2017, it's unlikely he would command one even if he were eligible.
Neil Walker has also received a qualifying offer before and therefore is ineligible to receive one. However, Walker was traded (by the Mets to the Brewers) during the season, so he would have been ineligible to receive a QO even under the previous CBA. J.D. Martinez, who was traded from Detroit to Arizona in July, and Yu Darvish, who was traded from the Rangers to the Dodgers at the non-waiver Trade Deadline, also fall into this category.
So who might get a QO? Lance Lynn, Jake Arrieta, Wade Davis, Masahiro Tanaka (if he opts out of his contract), Mike Moustakas, Eric Hosmer, Lorenzo Cain, Greg Holland and Zack Cozart are among the pending free agents who would merit consideration for a qualifying offer.
What kind of compensation pick will a club that loses such a player receive?
Under the previous CBA, if a team made a qualifying offer to a player and he signed elsewhere, it would get a supplemental first-round Draft pick (right after the end of the first round). That has all changed.
Under the new rules, if the team that loses the free agent is a revenue-sharing recipient, based on its revenues and market size, then the selection -- if and only if the lost player signs for at least $50 million -- will be awarded a pick between the first round and Competitive Balance Round A of the 2018 MLB Draft. If the player signs for less than $50 million, the compensation pick for those teams would come after Competitive Balance Round B, which follows the second round.
The following 16 teams currently qualify for these picks: A's, Astros, Braves, Brewers, D-backs, Indians, Mariners, Marlins, Orioles, Padres, Pirates, Rays, Reds, Rockies, Royals and Twins.
If the team that loses the player does not receive revenue sharing and did not exceed the luxury-tax salary threshold the previous season, its compensatory pick will come after Competitive Balance Round B. The value of the player's contract doesn't matter in this case. The nine clubs that fall into this category are the Angels, Blue Jays, Cardinals, Cubs, Mets, Phillies, Rangers, Red Sox and White Sox.
If the team that loses the player went over the luxury-tax threshold, the compensation pick will be placed after the fourth round has been completed (as with the previous scenario, it doesn't matter how much the player signs for). The five clubs in this group are the Dodgers, Giants, Nationals, Tigers and Yankees.
Keep in mind, these team designations could change every season. As a quick rule of thumb, Draft-pick compensation breaks down like this:
* General rule: Compensation after Comp Round B (in pick 75-80 range)
* Exception 1: Team paid luxury tax = Compensation after fourth round (mid-100s)
* Exception 2: Team received revenue sharing AND free agent signed for more than $50 million = Compensation after the first round
Are there still penalties for signing players who rejected qualifying offers?
Yes, but there are some changes.
Any team that signs a player who has rejected a qualifying offer is subject to the loss of one or more Draft picks. While a team's highest first-round pick is exempt from forfeiture, any additional first-round picks are eligible. Under the previous CBA, only the top 10 overall picks were exempt from forfeiture, so this is a big change. Three tiers of Draft-pick forfeiture -- which are based on the financial status of the signing team -- are in place to serve as a penalty for signing a player who rejected a qualifying offer:
• A team that exceeded the luxury tax in the preceding season will lose its second- and fifth-highest selections in the following year's Draft, as well as $1 million from its international bonus pool for the upcoming signing period. If such a team signs multiple qualifying-offer free agents, it will forfeit its third- and sixth-highest remaining picks as well.
Examples: A team with one pick in each round of the 2018 Draft would lose its second- and fifth-round picks. A team with two first-round picks and one pick in each subsequent round would lose its second-highest first-round pick and its fourth-round pick.
• A team that receives revenue sharing will lose its third-highest selection in the following year's Draft. If it signs two such players, it will also forfeit its fourth-highest remaining pick.
Examples: A team with one pick in each round of the 2018 Rule Draft would lose its third-round pick. A team with two first-round picks and one pick in each subsequent round would lose its second-round pick.
• A team that neither exceeded the luxury tax in the preceding season nor receives revenue sharing will lose its second-highest selection in the following year's Draft, as well as $500,000 from its international bonus pool for the upcoming signing period. If it signs two such players, it will also forfeit its third-highest remaining pick and an additional $500,000.
Examples: A team with one pick in each round of the 2018 Draft would lose its second-round pick. A team with two first-round picks would lose its second-highest first-round pick.
Anthony Castrovince has been a reporter for MLB.com since 2004. Read his columns and follow him on Twitter at @Castrovince.