Business of Sports · MLB
MLB Qualifying Offers Explained: Why a Free Agent Can Cost Draft Picks
A qualifying offer is worth $23.15 million for 2027. Here is who can receive one, what happens after rejection and which draft picks teams can lose.
An MLB free agent can come with a cost beyond his salary. If he rejects a qualifying offer and signs elsewhere, his new club can lose draft picks and international signing money, while his former club receives a separate compensation pick.
For the 2026–27 offseason, the qualifying offer is a one-year, $23.15 million contract for 2027. It gives an eligible player a guaranteed alternative to the open market and gives his former team a route to compensation if he leaves. The player does not have to accept it.
Who can receive a qualifying offer?
A player must have remained in the same organization, in the majors or minors, continuously from Opening Day through the end of the regular season. He also must never have received a qualifying offer before. A previous offer counts even if he rejected it.
That makes an in-season trade important. Tarik Skubal’s move from Detroit to the Dodgers means he cannot receive a qualifying offer this winter. Los Angeles cannot attach that particular draft-pick cost to his free agency. MLB’s trade-deadline eligibility review identifies him among the affected players.
What happens if a player accepts or rejects it?
Acceptance puts the player under contract with his existing club for 2027 at $23.15 million. Rejection keeps him on the free-agent market. He can negotiate with other clubs while considering the offer; rejecting it does not require him to leave his former team.
Teams have until 5 p.m. ET on the fifth day after the World Series to tender offers. Players must decide by November 17 at 4 p.m. ET, according to MLB’s 2026–27 offseason calendar. The dollar figure is the average salary of MLB’s 125 highest-paid players, recalculated for each offseason.
Which draft picks does the signing team lose?
The penalty depends on the signing club’s financial category. Its highest first-round selection is protected. Under MLB’s qualifying-offer rules, the first such signing carries these costs:
- Competitive Balance Tax payer
- Second- and fifth-highest picks, plus $1 million in international bonus-pool money.
- Revenue-sharing recipient
- Third-highest pick.
- Other club
- Second-highest pick, plus $500,000 in international bonus-pool money.
Those are selections in the club’s own draft order, not automatically second-, third- or fifth-round picks. Additional qualified signings can cost additional selections. Forfeited picks also remove their associated domestic draft bonus allocations.
What does the former team receive?
The former club does not simply take the new club’s forfeited pick. MLB awards a compensation selection:
- A tax-paying club receives a pick after the fourth round.
- A revenue-sharing recipient gets a pick after the first round, before Competitive Balance Round A, if the departing player signs for at least $50 million. A smaller contract yields a pick after Competitive Balance Round B.
- Other clubs receive a pick after Competitive Balance Round B.
A $50 million contract therefore changes the compensation tier for a revenue-sharing recipient. It is not a universal trigger granting every former team a first-round compensation pick.
Why does it matter to the free-agent market?
A club evaluating two similarly priced players can face different acquisition costs if only one has rejected a qualifying offer. Salary is one part of that decision; the lost selections and signing money are another. That does not establish how much any particular player’s contract will rise or fall.
The attachment also expires. A player still unsigned when the following year’s MLB draft begins can sign without the new club forfeiting a pick under this system. MLB’s 2026–27 qualifying-offer overview distinguishes eligible candidates from players already excluded by prior offers or in-season moves.
