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Draft compensation and the Cardinals' approach in free agency

How might qualifying offers and the potential of losing a first round draft pick affect the Cardinals' approach in free agency?

Jeff Curry-USA TODAY Sports

In recent years, the Cardinals have been one of the best teams at acquiring and developing young talent through the draft. They have done especially well with their first round picks, as recent first-rounders like Shelby Miller, Kolten Wong, Michael Wacha, Stephen Piscotty, and Marco Gonzales have all made an impact at the Major League level. Depending on the Cardinals' approach in free agency, they could have as many as three picks before the second round in next year's draft. Given the Cardinals' success with the draft in recent years, it is quite likely that draft compensation could be a factor in some of the Cardinals' decisions this offseason.

At the beginning of every offseason, teams have the opportunity to extend a qualifying offer to their top players entering free agency. The qualifying offer is a one-year deal for a set amount of money (this year's qualifying offer was $15.8 million), and most players reject the qualifying offer in order to enter free agency. If the player rejects the qualifying offer and signs elsewhere, then his former team receives a compensation pick between the first and second rounds. In addition, the team signing the player has to forfeit their first unprotected draft pick. (The top ten picks in the draft are protected.)

The Cardinals currently own the 30th overall pick as a result of having the best record in baseball in 2015. If they elect not to sign a free agent who has rejected a qualifying offer, they will almost certainly move up a few spots in the draft. There were seventeen free agents who rejected a qualifying offer, and it is likely that teams who pick before the Cardinals (but after the top ten picks) will sign some of these free agents and forfeit their first round picks. The Cardinals also made qualifying offers to John Lackey and Jason Heyward, so they could gain an additional two picks at the end of the first round if both players sign elsewhere.

So how valuable are these picks? There are various estimates on the value of these picks, and different teams probably value them in different ways. According to Fangraphs, the unprotected first round picks (11-30) have an expected value between $5 and $15 million. The Cardinals' first round pick is probably valued at the lower end of that range, since it is currently the 30th overall pick. However, it is possible that the Cardinals value these picks higher than most teams due to their success in turning these picks into Major League contributors. If the Cardinals truly believe that they are skilled at scouting and drafting first-round players, then they should be more cautious about giving up these picks to sign free agent players.

Based on the rumors we have heard so far, it appears that the Cardinals may be taking next year's draft picks into consideration when looking at free agents. So far, they have been connected to David Price and Ben Zobrist, who would not cost them a draft pick due to the fact that they were traded at this year's trade deadline. It is also notable that the Cardinals did not appear to show interest in Jordan Zimmermann, who recently signed a five-year, $110 million dollar contract with the Tigers. Unlike Price and Zobrist, Zimmermann received a qualifying offer and would have cost the Cardinals their first round pick. The same is true for several other starting pitchers, including Wei-Yin Chen, Marco Estrada (who re-signed with the Blue Jays), Yovani Gallardo, Zack Greinke, Hisashi Iwakuma, Ian Kennedy, and Jeff Samardzija. (Johnny Cueto, Mike Leake, and Scott Kazmir were ineligible for qualifying offers because they were traded.)

In fact, the only player the Cardinals have shown interest in (at least publicly) who would cost them a draft pick is Chris Davis. If they were unable to sign Jason Heyward, they could be in the market for another outfielder, and it would be important to keep in mind that Justin Upton, Alex Gordon, and Dexter Fowler received qualifying offers while Yoenis Cespedes and Denard Span did not.

The Cardinals must also consider the value of a draft pick when deciding how much to offer Jason Heyward. (The same would be true for John Lackey, although it does not appear that the Cardinals are very interested in bringing him back.) Like it or not, the opportunity cost of signing Heyward includes a compensation pick, which has value to the Cardinals. It may not be as big of a consideration with a top free agent like Heyward, but it could still have an impact, especially given the Cardinals' history of valuing these picks. If the Cardinals determine that the draft pick they would receive from Heyward's departure is worth $10 million, then it would make sense for them to offer him $10 million less than they otherwise would. (Of course, another team looking to sign Heyward would face a similar situation, assuming they value their draft pick similarly.) This amount would make a much bigger difference with a player like Lackey, but it might be enough to give the Cardinals second thoughts about signing Heyward, at least in comparison to players like Price, Zobrist, or Cespedes.

Ultimately, I still hope the Cardinals sign Heyward, and I believe he should be the team's top priority this offseason. With that being said, I am sure the Cardinals have placed a value on the pick they would gain as a result of losing Heyward, and it will likely be one of the many factors the Cardinals will consider when making him an offer.

Because the Cardinals' farm system looks thinner than it has in past years, these extra picks will be as important as ever, especially if the Cardinals hope to maintain their run of perpetual contention. It is crucial that the Cardinals do their due diligence in properly valuing their top draft picks as they look ahead to the free agent market this offseason.