Free agency in Major League Baseball officially kicked off on Saturday, Nov. 3 with some new rules in place under the sport’s new collective bargaining agreement agreed to last winter.
The biggest changes are to the free-agent compensation system. Prior to this offseason, players were rated by the Elias Sports Bureau into three categories: Type A, Type B and unrestricted. Under the old system, teams had to offer arbitration to any players designated Type A or B in order to receive draft-pick compensation from the team eventually signing the free agent.
However, the arbitration system has been replaced by a simple qualifying offer. The qualifying offer must equal the average salary of the 125 highest-paid players in baseball from the previous season. For this offseason that figure worked out to $13.3 million for a one-year qualifying offer.
It has had the effect of greatly reducing the number of players who will require draft-pick compensation and it greatly sped up the free-agency process. Instead of an early-December deadline by which arbitration had to be offered in order to assure compensation, the deadline on qualifying offers was Friday, Nov. 2.
Last year, 37 players were offered arbitration. Included in that number were lesser lights such as Rod Barajas, Jose Molina and Kelly Johnson.
But this year, only nine players were extended qualifying offers, according to The Associated Press.
The New York Yankees extended the most qualifying offers with three. They made qualifying offers to pitchers Hiroki Kuroda and Rafael Soriano and outfielder Nick Swisher. The Boston Red Sox made a qualifying offer to designated hitter David Ortiz and actually agreed to a two-year deal already. The Tampa Bay Rays offered $13.3 million in 2013 to outfielder B.J. Upton, and the Texas Rangers did the same with outfielder Josh Hamilton. In the National League, the only qualifying offers extended were to Atlanta Braves outfielder Michael Bourn, St. Louis Cardinals pitcher Kyle Lohse, and Washington Nationals first baseman Adam LaRoche.
The players now have until 5 p.m. EST on Friday, Nov. 9 to accept or reject the offer.
Any team signing one of those nine players will forfeit a first-round pick, unless its 2013 first-round pick is in the top 10 selections in June’s draft. In that case, a second-round pick will be forfeited. That is also a significant change from the old system, under which the top 15 picks in the first round were protected.
Another huge change in free agency compensation is what happens to the draft pick. Before, the pick was, for all intents and purposes, transferred from one organization to the other. Now, the pick simply disappears. For instance, were the New York Mets to sign Hamilton, their pick at the No. 11 spot in the June draft would disappear, with every other team behind them moving up.
The compensatory picks will be awarded after the first round, a sandwich pick between rounds one and two.
True free agency in baseball dates to the 1970s. Former St. Louis outfielder Curt Flood had challenged something called the “reserve clause,” a clause that essentially bound a player to a franchise for life or until that franchise decided to trade or release the player.
Flood sued Major League Baseball over the constitutionality of the reserve clause but lost the case, a decision which was eventually upheld by the U.S. Supreme Court. However, players Andy Messersmith and Dave McNally challenged the reserve clause again, this time in front of an independent arbiter. When Peter Seitz ruled in December 1975 the reserve clause only gained a team one extra year from a player whose contract was expiring, free agency was born.
Players become eligible for free agency by having at least six years of major-league service time (the amount of time spent on a 25-man major-league roster or a major-league disabled list) and not having an existing contract for the following season.
Under MLB’s new system, any player with six years not under contract for 2013 is now eligible to sign with any team as of Saturday, Nov. 3.
During that first free-agency period in the 1976-77 offseason, Baltimore Orioles outfielder Reggie Jackson signed the richest deal when he agreed to a $2.96 million, five-year contract with the New York Yankees.
The bar rose quickly from there.
After the 1978 season, Pete Rose of the Cincinnati Reds became a free agent. After playing 16 seasons in the Queen City, Rose signed with the Philadelphia Phillies for four years and $3.2 million.
The following season, Nolan Ryan left the California Angels to sign a four-year, $4.5 million deal with the Houston Astros to become the highest paid athlete in professional sports.
The next year, Dave Winfield of the San Diego Padres signed a whopping 10-year, $23 million contract with the New York Yankees. This deal brought controversy with it, primarily because Yankees owner George Steinbrenner thought it was a $16 million package but was actually $23 million due to a cost-of-living increase built into the deal by Winfield’s agent.
Cy Young Award closer and future Hall of Famer Bruce Sutter got six years and $9.6 million from the Atlanta Braves after pitching for the St. Louis Cardinals in 1984. Former Chicago Cubs ace Greg Maddux got five years and $28 million from the Braves following the 1993 season.
After the 1996 season, former Boston Red Sox ace Roger Clemens went north of the border for the highest-paid deal a pitcher had ever gotten. His deal with the Toronto Blue Jays broke the $8 million per season barrier at $24.75 million over three seasons.
Kevin Brown became the first player to reach nine figures. After one season with the San Diego Padres, Brown moved up the I-5 to the Los Angeles Dodgers to sign a seven-year, $105 million deal after the 1998 season.
Two years later, Manny Ramirez left the Cleveland Indians to join the Red Sox for eight years at $160 million. But Ramirez was practically destitute compared to the deal Alex Rodriguez signed with the Texas Rangers just days later. The former Seattle Mariners star signed an eye-popping 10-year, $252 million contract.
That was the largest contract in baseball history until December 2007, when Rodriguez–after opting out of his first mega-deal–negotiated a 10-year, $275 million deal with the Yankees.
Phil Watson is a longtime New York Yankee fan who was a writer and editor at several daily newspapers for more than 20 years.