Explaining the Qualifying Offer for the Orioles

This short post will do its best to explain the new qualifying offer rules that came out with the new CBA.  Previous rules were deemed as restrictive for players to find new clubs, a situation that Dan Duquette tried to take advantage of in years past to mixed results.  So here we go.

Who can be designated as a Qualifying Offer player?
The player must have (1) spent the entire year in the organization and (2) has never before been designated as a Qualifying Offer player.

What is the value of the Qualifying Offer?
The offer is the average salary of the 125 highest paid players in baseball.  For the 2017/18 offseason, the value is 17.4 MM, an increase of 200k over last year's average.

When are Qualifying Offer designations made?
Teams have five days (5 pm deadline) after the conclusion of the World Series.

How long does a player have to consider the offer?
The player has ten days after the Qualifying Offer deadline to make his decision to accept or not.

What is the compensation earned by the former club?
If the qualifying offer player is signed before the 2018 draft, then a couple things could happen.
(1) If the club receives revenue sharing (the Orioles do) and the player signs a contract paying over 50 MM, then the former club gets a compensatory draft pick after the first round and before the Round A Competitive Balance picks.
(2) If the club receives revenue sharing and the player signs a contract for less than 50 MM, then the former club receives a pick between the Round B Competitive Balance picks and the beginning of the third round.
(3) If a club pays into revenue sharing and the player signs a any deal, then the former club receives a pick between the Round B Competitive Balance picks and the beginning of the third round.
(4) If the club's previous (e.g., 2017) payroll exceeds the Luxury Tax threshold, then the former club gets a pick between the 4th and 5th rounds.
***note - thresholds are 2017 (195 MM), 2018 (199 MM), 2019 (206 MM), 2020 (209 MM), 2021 (210 MM)***

What is the compensation lost by the new club?
(1) Clubs, like the Orioles, who receive revenue sharing lose their third highest selection.
(2) Clubs who pay into revenue sharing lose their second highest selection and 500k of their international signing bonus pool.
(3) Clubs who have crossed the payroll tax in the previous year (e.g., 2017) lose their second and fifth highest draft selections along with 1 MM in their international signing bonus pool.

What if a club signs two Qualifying Offer Players?
(1) Clubs, like the Orioles, who receive revenue sharing lose their fourth highest draft selection.  I think. It may be their 4th and 5th selection. So, it either goes third, fourth, fifth, sixth, etc. or it goes fourth and fifth, sixth and seventh, eighth and ninth, etc.
(2) Clubs that pay in to revenue sharing lose their third and sixth, then fourth and seventh, then fifth and eighth, then ninth and tenth, etc. They also lose an additional 500k in international bonus pool money for each signing.
(3) Clubs that have crossed the Luxury Tax threshold lose their third and sixth, then fourth and seventh, then eighth and ninth, etc. along with 1 MM in international bonus pool money for each signing.

Hope that helps.