Understanding Draft Compensation for Free Agents Rejecting Qualifying Offers

The qualifying offer system plays a pivotal role during the offseason for Major League Baseball (MLB) teams, allowing them to extend offers to free agents. For a player who spent the entire 2026 season with a team and has never been issued a qualifying offer, the team has a short window—five days post-World Series—to present a one-year contract valued at $23.15MM. If accepted, this allows the player to remain with his current club; if declined, the player can sign with another team while the original team potentially gains a draft pick in compensation.

This offseason carries added importance, as teams must navigate the potential final iteration of the qualifying offer process under the current collective bargaining agreement, set to expire on December 1. This uncertainty could influence both players and clubs. Players wary of the free agent market and the possibility of a lengthy labor stoppage might feel inclined to accept a qualifying offer. Conversely, this situation could deter teams from issuing qualifying offers to borderline candidates.

Compensation Overview for QO-Rejecting Free Agents

The landscape of draft compensation for teams losing qualifying offer-rejecting free agents varies significantly. The finalized list of compensation picks will not be clear until MLB’s official payroll calculations emerge in early December. However, teams categorized last winter will largely inform this structure, particularly regarding revenue-sharing recipients. The nine teams projected to exceed the competitive balance tax (CBT) threshold by a substantial margin will not be in a position to receive compensatory picks.

Revenue Sharing Recipients: Athletics, Brewers, Cardinals, Diamondbacks, Guardians, Mariners, Marlins, Orioles, Pirates, Rays, Reds, Rockies, Royals, Tigers, Twins

If any of these teams loses a qualifying free agent who signs elsewhere for over $50MM in guaranteed money, their compensatory draft pick will land after the first round of the next year's draft. For instance, the Orioles received both the 30th and 31st overall picks in the 2025 draft due to their qualifying free agents signing lucrative contracts. If a player signing elsewhere makes less than $50MM, the resulting compensation pick will fall between Competitive Balance Round B and the start of the third round—typically around the 70th to 75th pick overall.

Categories of Teams and Their Draft Picks

Many of the likely candidates for qualifying offers this offseason hail from revenue-sharing teams. Successful analysis from MLB Trade Rumors identified potential position players and pitchers poised to receive qualifying offers, such as Mariners outfielder Randy Arozarena and Orioles pitcher Trevor Rogers. Twins catcher Ryan Jeffers and Pirates second baseman Brandon Lowe are other candidates being discussed as strong possibilities for a qualifying offer.

Teams Not Receiving Revenue Sharing and Outside the Tax: Angels, Astros, Giants, Nationals, Rangers, White Sox

For these teams, losing a qualifying free agent will yield a compensatory draft pick falling between Competitive Balance Round B and the start of the third round. Last offseason, the Cubs earned the 75th overall pick when Kyle Tucker rejected their qualifying offer and joined the Dodgers.

Competitive Balance Tax Payers: Blue Jays, Braves, Cubs, Dodgers, Mets, Padres, Phillies, Red Sox, Yankees

For teams exceeding the CBT threshold, the compensatory pick for losing an eligible player ends up after the fourth round of the subsequent draft. For example, the Padres and Phillies similarly received 136th and 137th overall picks respectively last season when key players signed lucrative deals elsewhere.

This winter, players such as Cubs outfielder Seiya Suzuki are almost assured to receive a qualifying offer, while the potential also exists for Yankees closer David Bednar and Padres setup man Adrian Morejon as well. Other teams may consider extending offers to players like Cubs’ Ian Happ, the Yankees’ Jazz Chisholm Jr., and the Padres’ Ty France, though the chances of these players receiving an offer appear lower.