The Houston Astros made the first big splash leading up to the July 31 trade deadline by trading for Oakland A’s starting pitcher Scott Kazmir, according to Ken Rosenthal.
The move is huge for the Astros, who lead the American League Wild Card race and just bolstered their rotation with a starting pitcher who has a 2.38 ERA. But the move could be even bigger for Kazmir, who now stands to make millions more as a free agent this off-season.
By being traded, Kazmir will no longer be subjected to MLB’s free agency compensation system, which has been dubbed, “the worst rule in baseball.“
Scott Kazmir’s trade could be worth millions to him. If he had been given a qualifying offer by OAK, draft comp might’ve chased away teams.
— Buster Olney (@Buster_ESPN) July 23, 2015
Here’s how it works…
Teams can be compensated for losing for losing key players to free agency. The compensation is paid by the team who signs the free agent, and typically takes the form of their highest unprotected pick in the next draft (the top 10 picks are protected).
However, in order to be compensated, the player’s current team must first send him a qualifying offer, a one-year contract worth somewhere in the neighbourhood of $US16 million. Players typically reject the qualifying offer — last year, all 12 players rejected the offer from their former team — and become free agents.
But here is where it gets tricky for the players. While they reject the deal hoping/knowing they can get more in free agency, doing so creates a tax for whatever team signs them. That is, in addition to paying the player, the new team also must forfeit a valuable draft pick.
Why the rule is terrible…
The rule is terrible because it is not applied equally to all players.
The compensation system is not a big deal for the top free agents because one draft pick is not going be a deciding factor when a team is going after a $US150+ million player. It is also not a big deal to lower-level free agents, as teams won’t offer them a qualifying offer out of fear the player will accept and be grossly overpaid.
It only affects a small group of second-level free agents who now have a tax added to their free agency price tag, a tax that, at best, will reduce the amount teams are willing to offer, and at worst, will scare teams away and lower demand.
Here is where Kazmir comes in…
Kazmir would have almost certainly have been one of those second-level free agents. However, the compensation system only applies to players who were with the same team all season. By being traded, Kazmir cannot receive a qualifying offer and the Astros cannot be compensated.
Kazmir just got his get-out-of-jail-free card.
Even if Kazmir decides to re-sign with the Astros this winter, this could still have a big impact. Instead of just bidding against themselves, Kazmir can still bring other teams into the mix to up the price now that there can’t be a draft pick attached to his price tag.
For a 31-year old left-hander having the best year of his career, that extra freedom could mean millions.
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