Draft compensation each team receives for losing qualifying offer-rejected free agents
Qualifying offers are one of the key mechanics of the free agent season, as teams must decide within five days after the World Series whether to extend one-year contracts (worth $22.025MM this winter) to eligible free agents. If a player has been with his team through the entire 2025 season and has not received a QO in the past, he is eligible for a qualifying offer, so the player has the option of accepting a one-year contract and forgoing free agency entirely to stay with his club.
If a player rejects the QO, his former team can now get the pick if the free agent signs elsewhere. If one of the eligible free agents does head to another club, each team will receive the following (mostly confirmed) rundown… .
income share recipient: Diamondbacks, Rockies, Reds, Brewers, Pirates, Marlins, Athletics, Mariners, Tigers, Royals, Twins, Guardians, Orioles, Rays
If any of these teams have a QO-rejecting free agent and he signs elsewhere for over $50MM in guaranteed money, the compensatory picks will drop after the first round of next year’s draft. (For example, the Orioles have both the 30th and 31st picks in the 2025 draft since eligible free agency corbin burns and Anthony Santander Each team signs with a new team for over $50. ) If a team has a QO-denying free agent who signs elsewhere for less than $50 million in guaranteed money, the compensatory pick in the 2026 draft will be between the competitive balance Round B and the beginning of the third round, typically in the 70th to 75th pick range.
Take a look at the members of these teams’ 2025-26 free agency class, the Diamondbacks’ Zach Gallen and wineries Brandon Woodruff are the only reasonably qualified candidates for admission who may reasonably be considered. You can also make a case for the release of Tigers Jack Flaherty If he declines his $20MM player option for 2026, he will receive a QO. Notable upcoming free agents, like Seattle’s Josh Naylor and Eugenio Suarez These players are not eligible for QO because they joined the Mariners midway through the season.
Teams that did not receive revenue sharing funds and did not pay the competitive balance tax: Giants, Cardinals, Cubs, Braves, Nationals, Rangers, Angels, White Sox
For these teams, the 2026 compensatory picks they receive for losing eligible free agents will also fall between CBR-B and the start of the third round (regardless of whether the player signed for at least $50MM). The Red Sox become part of that group in 2024, and since they’re not taxpayers, Boston receives the 75th overall pick in the 2025 draft as compensation Nick Pivetta Rejected a qualifying offer and subsequently signed with the Padres.
The biggest name to watch here is Cubs outfielder Kyle Tuckerwho could command the biggest deal in the 2025-26 free agent class. Chicago can also issue QO Shota Imaga If he becomes a free agent, that would first require the Cubs to decide on a slew of club options and add-on options for Imonaga, so there will be plenty of hurdles for Imonaga to overcome before he can actually hit the open market.
Team in trouble:Astros
It’s usually pretty obvious which teams are well above or well below the luxury tax threshold ($241MM in 2025), and sites like RosterResource and Cot’s Baseball Contracts can do a good job of estimating the ups and downs of each team’s tax position over the course of a season or multiple seasons. The league’s accounting department naturally has the full set of salary data for each team, so we won’t know the official status of each team until MLB releases the information in December.
For now, we’re keeping Houston in its own small category because its tax status isn’t entirely clear. RosterResource’s tax code for the Astros is about $238.2MM, putting them below the threshold, while Cot’s tax code for Houston is over $244MM. If the Astros do go over the tax line for the second year in a row, they’ll face a 30% “second payment” surcharge on every dollar spent over $241MM, which would be $900,000 if Cot’s $244MM forecast is accurate.
While the actual tax bill of $900,000 is negligible, the bigger impact for the Astros will be the upcoming free agents Framber Valdez. The veteran left-hander is certain to receive a qualifying offer, so if he signs elsewhere, the Astros’ draft pick will be available before the start of the third round if it turns out they stay under the tax threshold. If their tax ID number does exceed 244MM, Houston will join the next group…
Competitive Balanced Taxpayer: Blue Jays, Dodgers, Mets, Phillies, Padres, Red Sox, Yankees
If a team exceeds the luxury tax line, their compensatory picks will drop after the fourth round of the 2026 draft. For example, the Warriors are taxpayers in 2024, so they receive the 136th overall pick in the 2025 draft, when Max Fried Rejected a qualifying offer from Atlanta and signed with the Yankees.
It turns out that many of the most obvious qualifying offer candidates in this winter’s free agent class happen to be from tax-paying teams. The Phillies have Kyle Schwarber and rangers suarezThe Padres have Dylan Seth and Michael KingThe blue jays have Beau Bichettethe Mets have Edwin Diaz (He may choose to exit the trade to re-enter the market), and Trent GrishamHis career with the Yankees makes him a possible QO candidate. Boston’s Lucas Giolito is a borderline QO case, plus his late-season elbow issues could impact any decisions the Red Sox make regarding eligibility.
