Dan Szymborski, the creator of ZiPS, took a look at the cost of the qualifying offer to free agents like Kendrys Morales and Stephen Drew. Szymborski looked at the values of draft picks based on his studies on the topic in the past, and came up with the numbers that losing a first round pick to sign a player would be the equivalent of losing about $23 M in future value.
What this means for guys like Morales and Drew is that declining the qualifying offers has basically killed their markets. Szymborski uses ZiPS projections to say what players would be worth on the open market, without compensation. He comes up with a two year, $20 M deal for Stephen Drew, and a two year, $24 M deal for Kendrys Morales. However, when you add in compensation, Drew would only be worth a two year, $3 M deal, and Morales would only be worth a two year, $1 M deal.
It’s unlikely that any player would take this kind of drastic pay cut, especially when these guys turned down a one year, $14.1 M offer. The only player who projects to be worth anything close to the original qualifying offer is Ubaldo Jimenez. Szymborski says that Jimenez would have been worth four years and $75 M without compensation, and is worth four years and $52 M with compensation. Each player is worth a bigger contract for teams who give up a second round pick, since a second round pick comes with lower compensation value. However, the Pirates would be giving up a first round pick, which puts them at a disadvantage over other teams.
The problem with the team is that they are being penalized for signing the player, and the penalty comes with a real loss in value. Because they’re losing value, they won’t want to pay as much to the player. So you’ve got the team wanting a discount from the player, due to a cost that they’re having to pay for signing the player. Meanwhile, the player doesn’t want to give a discount, since the loss of a draft pick doesn’t compensate him in any way.
This all made a little more sense when the former team used to get the draft pick that was forfeited, along with a compensation pick between rounds. Now the first round pick is just forfeited, which makes no sense. The only benefit here is that it drives down the price of players who might be worth signing if they didn’t have any draft pick compensation attached.