The Qualifying Offer

Pondering A Switch Atop The Lineup
2012 Season Preview: Something To Prove
Russ doesn't trust banks with his money. (REUTERS/Steve Nesius)

Earlier this week we discussed the contract situations of Nick Swisher and Russell Martin, both of whom are important players to the Yankees and scheduled to become free agents after the season. The Yankees don’t have an obvious internal replacement for the former while the latter saw his free agent stock jump thanks to Yadier Molina’s massive contract extension. Multi-year contracts for both players are reasonable given their age and production, but will cut into the team’s 2014 austerity plan. The new Collective Bargaining Agreement may actually help the Yankees in this situation, however.

Under the terms of the new CBA, Type-A and B free agents have been eliminated. If a club wants to receive draft pick compensation for a player, they now have to make a qualifying offer rather than offer arbitration. The qualifying offer is a guaranteed one-year contract with a salary equal to the average of the top 125 salaries in 2011, and this coming offseason it will be approximately $12.4M. If you’re the Yankees and you’re eyeing that $189M luxury tax threshold in 2014, wouldn’t you love the idea of bringing both Swisher and Martin back for 2013 on one-year, $12.4M contracts? I know I would.

Obviously it takes two to tango. Making a qualifying offer to both Swisher and Martin doesn’t guarantee either guy will accept. I’m sure every player appreciates the security of a multi-year contract, and those two would have to at least explore the free agent market before agreeing to come back to the Yankees for just one guaranteed year. The qualifying offers are a win-win as far as the team is concerned. They would buy them an extra year for Austin Romine‘s development (and transition to the show) and allow them to see if a potential Swisher replacement emerges within the farm system while having zero impact on the 2014 budget. If Swisher and Martin sign elsewhere, they Yankees would get draft picks as compensation (assuming they qualify under the new system).

It’s easy for me to say this as a fan, but I’d rather see the Yankees overpay in money on a one-year deal than overpay in years on a multi-year deal. The guys writing the checks may feel differently. The $12.4M is probably more than either Swisher or Martin will get on an annual basis as a free agent, and if the market break rights both guys could wind up back in pinstripes by accepting the qualifying offer. I have to think this would be the best case (realistic) scenario for the team, getting both their starting right fielder and catcher back on terms that don’t impact future payroll.

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Pondering A Switch Atop The Lineup
2012 Season Preview: Something To Prove
  • http://yankeeanalysts.com Matt Imbrogno

    I think Swisher could get $12.4M+ on the market, especially considering what Cuddyer got. Martin probably couldn’t, though. Maybe go a bit above the minimum of the offer for Swisher, maybe 1/14?

    • Slugger27

      beat me to it. i think swish definitely gets more than $12.4M on the open market. hes been worth 11 wins in his 3 years on the team, and hes only 31. fangraphs has him worth $14M+ 5 of the past 6 years.

      i think on the open market he could get $15M AAV rather easily

      • http://yankeeanalysts.com Matt Imbrogno

        Eh, I don’t think he could get $15M.

        • Dan

          He should be able to get about 15. He is arguably going to be the best free agent outfielder on the market. Someone will go to at least 15 million per year.

        • Slugger27

          jason kubel just got $7.5M per year… he was worth 1 win last year and below replacement the year before

    • AndrewYF

      Why bother? If you can get him at the minimum fine, if not you get a draft pick if he signs elsewhere, or you can sign him to a contract that you’re comfortable with, knowing it’s a win-win whether he stays or goes.

  • Mike Myers

    I cant imagine Swish or Martin would take that. 12.4 vs. a guaranteed 30MM+. No one turns down that much money. Ill take the draft picks though!

    • Andrew

      Does the offer have to be right at the average of the top 125? Could they hypothetically offer a bit more to say, Swisher (whose other past FA OF comps have earned more per year compared to what the qualifying offer would be if set at 12.4)? I doubt he would accept but it’s interesting to know how the mechanics of the offer work. And speculate on how teams utilize it. It seems like older guys hitting FA may be more enticed by it if they want to play another year at a high salary that might be out there on the market. I also think given Martin’s propensity to get hurt in his career, it could be something he might grab to delay truly hitting the open market.

    • Johnny O

      And back in Novermber, everyone thought Edwin Jackson will only sign for 4/$40M. You never know….

  • Cris Pengiucci

    Seems like a good fall back plan if they can’t lock them up to longer term deals at resaonable prices. I agree Swish could probably get more shile Martin is less likely to, but if they’re willing to accept a one year deal, it definitely provides the Yankees with more time and flexibility to determine their best path forward for 2014 and beyond.

  • Robinson Tilapia

    If it comes to that, sure, I’d offer either of them 12 mil. I’d imagine the Yanks make some sort of multi-year offer to both of them, though.

  • BK2ATL

    I remember reading RAB a couple of weeks ago when the word that extension talks with Martin were in progress and he balked at the 3 yr, $20-24 million deal. I understood both sides of it. Martin knew he’d get more, esp. if he has a similar year behind the plate and if he’s better at the plate in 2012. Cashman should’ve offered 3 yrs, $27-30 million and called it a day. Martin is now fully healthy, something he wasn’t in 2011 yet he still had his offensive moments.

    Yadier F*$king Molina just extended at 5 yr/$75 million ($15 mil AAV). Miguel Montero will now certainly get somewhere between ($12-14 mil AAV). Martin would’ve been a steal at ($9-10 mil AAV).

    I don’t mind 3-4 more years of Russell Martin. Since we don’t have a real successor at the moment, Sanchez is still a ways away, why screw it up what we do have? Cervelli and Romine are not the answer. Towards the end, if Martin can’t catch everyday, he can and has played 3B in the past, which spells ARod. A 3 year deal at a max $10 mil AAV wouldn’t be a total loss.

    Swisher…I like the guy, but he’s gonna cost us, and he’s earned it. What’s the latest on Jorge Soler anyone???

    • jsbrendog

      no way martin plays 3b

  • Mark from Chicago

    Adding more intrigue to the situation is that Boston has a weakness at C and in RF could easily make a long-term bid to drive up the price (and possibly years) for either Martin or Swish.

    • jsbrendog

      you think? after the crawford debacle im not as sure

      • Havok9120

        We’re acting as if Crawford’s gone through half a decade worth of contract and sucked the whole time.

        One year does not a debacle make.

  • Manny’s BanWagon

    Unless the Yankees sign BJ Upton or trade for someone like Dominic Brown, I think they need to bring back Swisher. Aside from his postseason collapses, he’s been nothing but rock solid.