New CBA could impact Royals through qualifying offer

New CBA could impact Royals through qualifying offer

KANSAS CITY -- There is speculation around baseball that the Royals, because of their massive potential free-agent class after the 2017 season, could be one of the teams most affected by the new Collective Bargaining Agreement.

Under the new CBA, teams losing a free agent who has been presented a qualifying offer are no longer guaranteed a compensatory first-round pick.

If a team under the luxury-tax threshold, such as the Royals, loses a player it gave a qualifying offer to, and the player signs a contract for less than $50 million, the team will receive a Draft pick at the end of the second round. If the player signs for $50 million-plus, and the team is one of the 15 in the smallest markets, only then would the team receive a pick at the end of the first round.

This could become significant for the Royals, who could lose players such as first baseman Eric Hosmer, third baseman Mike Moustakas, closer Wade Davis, left-hander Danny Duffy and outfielder Lorenzo Cain, all of whom could sign elsewhere for long-term deals of $50 million or more. Other potential free agents, such as shortstop Alcides Escobar, likely would sign for long-term deals for less than $50 million.

"We really haven't examined all the aspects of the new CBA," Royals general manager Dayton Moore told MLB.com. "We're still in the early stages of examining it and I can't say how it will affect us going forward. First and foremost, we're very pleased that we have a new agreement that will guarantee us labor peace for years to come.

"But beyond that, I can't really comment on how it will affect us because we just haven't examined it closely enough."

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Here's the issue that is most troubling to small-market teams, such as the Royals, that hasn't received much attention: the rising costs of the qualifying offer.

The QO this year topped out at $17.2 million, which is tip money for large-market teams such as the Dodgers, Yankees and Cubs. The small-market Royals have never had a player make that much annually, and won't until 2018 when Alex Gordon's contract escalates to $20 million a year.

The Royals were essentially boxed out of receiving compensatory Draft picks this year for losing free agents Edinson Volquez and Kendrys Morales because they couldn't take the risk of offering each the qualifying offer. A source close to the situation indicated that both Volquez and Morales would have accepted the one-year qualifying offers, which prevented the Royals from offering because of payroll limitations.

Volquez and Morales signed contracts with new teams for far less annually, each earning an average of $11 million per year.

The qualifying offer next year might exceed $18 million, so there is little chance the Royals can take the risk of offering it to any of their potential free agents, none of whom seem likely to be earn that much annually on the open market.

The bottom line? The rising costs of the QO certainly will inhibit a small-market team, such as the Royals, from rebuilding via compensation picks and make it more likely they consider trading impending free agents rather than letting them walk at the end of the season and receiving nothing in return.

Jeffrey Flanagan has covered the Royals since 1991, and for MLB.com since 2015. Follow him on Twitter @FlannyMLB. This story was not subject to the approval of Major League Baseball or its clubs.