Transaction Analysis 11/4: Cards QO Ozuna, Lose 4 players to Minor League Free Agency

The following transactions took place for the Cardinals on Monday, November 4th:

Extended a 1-year $17.8 million Qualifying Offer to LF Marcell Ozuna

C Joe Hudson filed for minor-league free agency in lieu of an outright assignment to AAA Memphis

RHP Merandy Gonzalez, RHP Williams Perez and OF Johan Mieses declared minor league free agents

The Qualifying Offer Procedure and its Consequences

All MLB players whose contracts were expired and who had 6 years or more of MLB service time were automatically declared free agents on October 31st at 9:00 A.M. EST. Clubs have the option to extend what is known as a Qualifying Offer (QO) to their free agents that had been with the club the entire season and had never been extended a QO previously in their careers. The QO for the 2020 season represented the average of the salaries of the highest 125 paid players in 2019. The QO for $17.8 million actually went down a bit from the QO for 2019, and that was the first time that happened since the QO procedure came into being.

Matt Wieters had already been extended a QO earlier in his career and was ineligible to receive a QO this year. Tony Cingrani was not eligible for a QO because he was traded to the Cards during the regular season. The Cards would not have offered either player a 1-year deal at that price anyhow. The Cards almost certainly did not extend Michael Wacha a QO because they were afraid he would take it. And while the Cards expected to negotiate a deal with Adam Wainwright, there was no cause to offer Wainwright a $7.8 million raise from last season. With those players not receiving QOs because it was either not allowed or not advisable, the Cards will receive no compensation if those free agents sign with other clubs.

This leaves Ozuna, whom the Cards would actually be fine with bringing back on a 1-year $17.8 million deal. Ozuna has until November 14th (10 days from the date of the offer) to decide whether to take the offer. If he takes the offer, then he is considered a signed player to a 1-year deal at that price and will be added back to the Cards’ 40-man roster immediately. If he declines the offer and signs with another club, then the Cards will receive an additional draft choice after Competitive Balance Round B in the upcoming June 2020 draft. The draft pick compensation teams receive depends on a variety of factors, and the Cardinals would receive this particular type of pick because they do not receive revenue sharing and did not exceed the luxury tax in 2019. This pick is not one forfeited from another team, just essentially a pick created out of thin air.

In addition to the Cards receiving draft pick compensation, however, any team signing Ozuna if he rejects the QO would have to forfeit 1 or more draft choices. The draft pick is not forfeited to the Cards, it just disappears. What type of draft choice is forfeited, like with compensation, depends on whether the club forfeiting the pick exceeded the luxury tax or receives revenue sharing:

• Teams that neither exceeded the luxury tax nor received revenue sharing lose their second-highest available draft choice plus $500,000 from their International Signing Bonus Pool. If such a team were to sign a second player that rejected a QO, it would forfeit its third-highest draft choice and another $500,000 from the ISBP;
• Teams that received revenue sharing in 2019 forfeit their third-highest draft choice for one signing and their fourth-highest choice for two signings. They don’t lose any ISBP money in either case;
• Teams that exceeded the luxury tax in 2019 forfeit both their second-highest and fifth-highest choice plus $1 million in ISBP money. If such a team makes a second signing, they would lose their third-highest and sixth-highest choices.

It is not as dire a situation as it used to be to sign a player that rejected a QO. Nobody forfeits their highest draft choice anymore. In addition, the compensation pick teams receive is not as good as it used to be.

Only 6 players have ever accepted a QO in the history of the procedure since it was instituted in 2012. There are some who have speculated that Ozuna either will or should accept it because he has had down seasons since his breakout 2017 campaign and he could increase his value in free agency after 1 season by betting on himself. I would not care to speculate on what is in Ozuna’s best interests. Ozuna wants to come back to the Cards, and it appears there is interest from the club in bringing him back. As much as Ozuna enjoys playing in St. Louis, I don’t personally believe that he will settle for a 1-year deal, but I’m just guessing. It remains to be seen whether the Cards and Ozuna will be able to come to terms on a longer term deal.

For what it is worth, the following additional 9 MLB free agents from around baseball also received QOs:

RHP Gerrit Cole, 3B Josh Donaldson, LHP Madison Bumgarner, LHP Will Smith, RHP Zack Wheeler, 3B Anthony Rendon, RHP Stephen Strasburg, RHP Jake Odorizzi, 1B Jose Abreu.

The Cards neither received revenue sharing nor exceeded the luxury tax in 2019. Thus, if they are interested in signing any of the above nine players, be aware that they will forfeit their second-highest available draft choice and $500,000 in ISBP money if they sign one of them.

Minor League Free Agency

All players who have spent parts of 7 seasons in the minor leagues, whose contracts have expired and who are neither on a club’s 40-man roster nor are signed to a successor minor league contract for 2020 were automatically declared minor league free agents on November 4th at 5:00 EST. In addition, a player who has been released by another minor league organization in his career is eligible for minor league free agency after his current minor league contract expires. Minor league free agency is sometimes called Rule 55 six- year free agency, but the common misconception is that players become minor league free agents after 6 years of service. In actuality, the 6-years refers to the renewal of a player’s minor league deal on 6 occasions. Thus it takes partial service in the minor leagues for at least 7 seasons.

The reason I waited to publish this article until now, is that, for some reason, this list of minor league free agents is not made public in a timely manner. The Rules require that the Commissioner’s Office compile a list on August 1st of players who are set to become minor league free agents at the appropriate time. Once that list is published, players who feel they were wrongly left off the list can petition to be added to it. That list is not made public. In addition, between the time that the minor league season is over and the date that players are set to be declared minor league free agents, the club can negotiate and try to sign these players to what is known as a successor minor league deal for 2020. Teams can also add players to its 40-man roster after the World Series is over. Either transaction would stop the players from becoming minor league free agents.

The trouble is that these successor minor league deals, if entered into, are typically not disclosed to the public in a timely manner like other transactions. The deadline set for players to be automatically declared minor-league free agents was November 4th at 5:00 EST. That list of players was not publicly disclosed either. Before that deadline, I scoured all of the Cardinal players on minor-league reserve lists to determine who I believed would be eligible for minor league free agency. My research discovered that the following players should have been eligible:

RHP Derian Gonzalez, RHP Kevin Herget, RHP Roel Ramirez, C Jose Godoy, IF Jose Alexander Martinez, RHP Merandy Gonzalez, RHP Mitchell Osnowitz, SS Rayder Ascanio, OF Johan Mieses, RHP Williams Perez and RHP Ramon Santos.

Catcher Joe Hudson is a special case. Hudson was added to the Cards’ 40-man roster on September 1st, but was outrighted to AAA Memphis on November 1st. He had the right, as someone who had been outrighted earlier in his career, to declare free agency in lieu of accepting the outright assignment, and he had 3 days to make the election. That is the only type of free agency left in the game for which players are still required to file. Coincidentally, the 3-day deadline he had to decide whether to make such a filing coincided with the date that all Rule 55 minor league free agents would be declared free agents automatically. So Hudson had the right to minor league free agency on either of two different grounds. It appeared he actually filed for free agency on November 4th in lieu of the outright assignment, because that transaction was reported by the Cardinals on Twitter and other transaction pages. What happened to the 11 other players I identified as eligible for automatic minor league free agency under Rule 55 was not reported.

Official List of Minor League Free Agents

Today, however, Baseball America published a league-wide list of minor league free agents that it says was furnished by Major League Baseball. BA has published such a list for several years. You can find the article setting forth this year’s list here. BA’s list did not state who was eligible, just the players who were officially declared minor league free agents on November 4th. According to the list, of the players I identified above, only RHP Merandy Gonzalez, RHP Williams Perez, and OF Johan Mieses were declared minor league free agents. These transactions still are not reflected in on the Pacific Coast League transaction pages. The Cardinals could have either released all the rest of the players or signed the rest of them to successor minor league contracts for 2020. The latter is more likely, because releases are usually disclosed in a timely manner. Still the re-signings, if any, have not been publicly disclosed either.

The loss of both Gonzalez and Perez is not surprising. After being initially signed as an undrafted free agent out of the Dominican Republic by the Mets organization in 2013 as a 17-year old, Gonzalez ended up finding himself traded to the Marlins. Spending practically all of his time as a starter, the Marlins rushed him to the major leagues in 2018 for basically no reason to pitch out of the bullpen when the Marlins had an injury. He wasn’t awful, but it slowed his development as a starter, and he may have come down with some type of injury. The Marlins tried to outright him in the 2018 offseason, but he was claimed by the Giants. After spending the 2019 spring training with the Giants, that club tried to outright him as well, but the Cards claimed him on outright assignment waivers in a sneaky transaction on the first day of the 2019 regular season when they put Brett Cecil on the 60-day IL.

Despite having what was supposed to be electric stuff, Gonzalez’s time with the Cards organization didn’t work out to well. After stints for both Class A-Advanced Palm Beach and AA Springfield, the Cards designated Gonzalez for assignment on June 8th to make room for Tommy Edman on the 40-man roster and outrighted him to AA Springfield after he cleared waivers. At the time, Gonzalez’s WHIP was over 2.00, and he had allowed 20 BB against only 23 Ks. In 34 total games for Springfield, Gonzalez walked 6.86 men per 9 innings. Perez had prior major league experience with the Atlanta Braves and spent between 2009 and 2016 in their organization before being released. After that, he spent 2017 and 2018 on minor league deals with the Cubs and Mariners, respectively. He was invited to spring training, initially assigned to Springfield, got hurt, and finished the year with Palm Beach. As a starter, Perez was a groundball machine at a 54.6% clip in 13 starts, but his HR/FB ration spiked to over 20% and he allowed 10 HR in 67.1 IP. Perez was also 28 years old.

The more interesting case is Johan Mieses, still just 24 years old. Initially signed by the Dodgers organization as an undrafted free agent from the Dominican Republic as a 17-year old in 2013, he was traded to the Cardinals on April 1st, 2018 for organizational soldier Brevic Valera. The Cards had decided to give Yairo Munoz a bench job on the strength of his 2018 spring training and found Valera expendable. Mieses split time almost equally at Palm Beach and Springfield in 2018. After a strong showing at Palm Beach, he struggled mightily in Springfield, slashing .205/.250/.374 for a 66 wRC+ in 233 PA. This was the 2nd straight year that Mieses had a poor showing at the AA level, having posted a 62 wRC+ for the Dodgers’ AA affiliate in 2017. Given a 3rd spin at the level to start 2019, Mieses improved with a 96 wrC+, but still had a pedestrian .301 OBP, despite improving his walk rate by almost 4%. Mieses actually saw some time for AAA Memphis due to a bunch of outfield injuries, and in a small sample size of 70 PA, actually performed well, with career bests in BB% (11.4%) and K% (15.7%). He also slashed .339/.414/.677 with a 158 wRC+. Mieses was not rated even as a 35 FV prospect by Fangraphs as of November 2018 and did not make the Cards’ top 40 prospect list. He was thought to have above average speed and power with raw tools, but they never manifested themselves after he hit 28 HR for the Dodgers’ Class A-Advanced affiliate in 2016.

That these 3 players were declared minor league free agents could mean a couple of different things. It could mean that the Cards did not even offer them a minor league successor contract for 2020. This would reflect an opinion that the Cards had no interest in them sticking around in the organization. It could also mean that the Cards offered the players a minor league successor contract, but the players refused to agree by the deadline. Perhaps the players and their agents believed they would get a better shake either financially or in terms of playing time and potential promotion with another organization.

That, however, leads to the question of why a player would agree to a minor league successor contract in the first place. It looks like the 8 other players on my list did just that. Why would they do that? By definition, they’ve already spent parts of 7 seasons in the minor leagues, and they have an automatic right to test the waters and see if any other club in the game wants to sign them. For some players, it’s possible that they and their agents have determined that there is no real interest. These players believe the Cardinal organization represents their best shot to get ahead. For the better performing players, the club has to entice the player by paying more money than the player and his agent would expect to get on the open market. The dollar figures on most minor league deals are not reported to the public, and it’s unknown what it would take these players to give an extra year to the Cardinal organization. Players in this situation who have never been on a 40-man roster don’t have a ton of leverage, and it might take only a marginal increase in their pay from the previous season to get them to sign.

The most interesting name on my researched list is RHP Roel Ramirez. The other piece of the Tommy Pham trade from the Rays, Ramirez spent most of the year in AA Springfield, where he had a 25.2% K rate, a 9.2% BB rate and a 3.85 FIP. For someone who pitched as much as he did, he was one of Springfield’s better relievers that never got promoted. His numbers weren’t eye-popping, but he showed some promise and he made a decent showing in the Arizona Fall League. It was only 9 games and 13.1 IP for the Glendale Desert Dogs, but it was purported to be against the best minor league competition and he had 16 Ks to only 3 BBs. The Cards could have added him to the 40-man roster to stop him from becoming a minor league free agent, but they apparently decided not to go that route. Instead, it looks like they signed him to a 2020 successor minor league deal, perhaps convincing him that although he is not being added to the 40-man at this time, that he has a chance to make the major leagues soon with this club.

Keep in mind that the Cards’ apparent signing of these 8 players to a successor minor league deal does not protect those players from the Rule 5 draft. Thus, if they are not added to the 40-man roster by November 20th, each one of these players is eligible to be taken in the major league portion of the Rule 5 draft if they are not added to the Cards’ 40-man roster by then or in the minor league portion of the Rule 5 draft if they are not added to the 38-man AAA Memphis reserve list by that date. With Ramirez, there is an outside chance that the Cards could still add him to the 40-man roster by that date to make sure he is not selected. As for the other Cardinal players, I’m surprised that they were interested in most of them for next season to begin with.

Conclusion

The Cards’ 40-man roster is still at 37, as they have not chosen to add a player from the 40-man roster to protect them from minor-league free agency at this time. It appears that the Cards have signed Roel Ramirez, the most interesting of the minor-league free agents, to a successor minor-league contract for the 2020 season, and he will be in the organization if he is not taken in the Rule 5 draft. John Mieses, on the other hand, a promising young outfielder that hasn’t been able to put it all together, will be moving on to another organization, most likely. It’s possible he could still sign another minor league deal with the Cards, but the Cards would almost certainly offer him less money that they did before the deadline.

Stay tuned for more transaction news in the offseason. The Cards still have some players to add to the 40-man roster to protect them from the Rule 5 draft. November 20th is the date to file reserve lists and is thus the deadline to protect those players.