The Qualifying Offer and How it Hurts Small Markets

The Brewers did an amazing job building a winning team in 2021. It isn't easy when systems are stacked against small market teams. In addition to the budget restraints a small market team is also hurt by a system that was theoretically designed to help it: the qualifying offer system.

On its surface the QO system provides small market teams with better draft compensation for losing a player to free agency than it does a larger market team. Great for competitive balance! Or is it.

I give you the cases of Chris Taylor and Avi Garcia. Taylor received a qualifying offer from the Dodgers. Garcia didn't from the Brewers.

Statistically there isn't a whole lot separating these two:

Garcia career: .325 OBP/.431 Slugging/ .756 OPS 2021: .330/.490//820

Taylor career: .337 OBP/ .443 Slugging/ .779 OPS 2021: .344/.438./782

Taylor provides positional flexibility as a super utility player but isn't overall an above average defender. Garcia is above average in right field. Garcia is 30 years old. Taylor is 31.

Because of total budget, the Dodgers tagging Taylor for a QO was a no brainer. If he signs they get him for $18.4M which is focusing 7% of their $260M budget on one quality player. If the Brewers signed Garcia for the QO amount it would have focused 15% of their 120M budget. The risk is double for the Brewers.

Considering this risk differential, I would surmise that the Dodgers would have taken the same risk of giving Garcia a QO and the Brewers would not have given Taylor a QO if the players were on the opposite team.

Taking the risk means that the Dodgers either get the player back filling an important role on the roster or they get the draft pick compensation. The Brewers will get nothing. When you wonder why teams like the Dodgers, Yankees and Red Sox are able to keep having top ranked farm systems when the system is supposed to be stacked in favor of small market teams, keep this example in mind.

Draft compensation for QO on players entering free agency only matters if a team is willing/able to convey that QO. The bigger budget teams are more likely to maintain players through their last season prior to entering free agency and much more willing to convey a QO. Only 3 out of the 14 QO this year are from small market teams.

The intent of the QO system may have been to help small market teams; but it is doing the opposite.