SF Giants: Qualifying Offer Decision Looming

The SF Giants gained clarity on Thursday as the qualifying offer amount has been set to $18.9 million in 2021 according to Evan Drellich of The Athletic. 

Kevin Gausman is the only legitimate free agent candidate on the SF Giants who would be worthy of a qualifying offer.

After posting a 3.62 ERA (3.09 FIP) with 79 strikeouts in 59.2 innings, Gausman is expected to be in demand this offseason. However, issuing a qualifying offer could be one tactical way for the Giants to control his market.

As a reminder, the qualifying offer system acts as a one-year, guaranteed contract with the amount set well in advance to the start of free agency. Teams have an opportunity to use this offer as a way to keep their key free agents. With that being said, players who receive a qualifying offer normally reject them.

The appeal of a multi-year deal in free agency is greater than the one-year pact with a higher annual value.

Furthermore, the qualifying offer enables the team to gain compensation if the player walks in free agency. If a team makes a qualifying offer to a player and said player rejects it, then that team will receive an additional draft pick.

For example, the SF Giants made a qualifying offer to both Madison Bumgarner and Will Smith last offseason. Both players rejected the offer and signed elsewhere.

As a result, the Giants receive two additional draft picks at the end of the second round that they used to select pitching prospect Nick Swiney and infield prospect Jimmy Glowenke.

On top of this, a team that signs a player who had previously rejected a qualifying offer will forfeit a draft pick just as the Atlanta Braves and Arizona Diamondbacks did when they signed Smith and Bumgarner, respectively.

There is more nuance to the qualifying offer if a team has exceeded the Collective Bargaining Tax (CBT), but that is beyond the scope of this article.

Gausman seems like the only candidate the Giants would make a qualifying offer to, which would help them control his market. Teams, especially rebuilding teams, are not keen on signing players with draft pick compensation tied to their name.

There is little risk to the Giants making a qualifying offer to Gausman other than the fact that he would be under contract for $18.9 million next season if he accepts. If he rejects it, and signs elsewhere, then they would gain a draft pick.

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Despite this, I would not expect the Giants to follow through with this. They have the money to make it work, but projection models likely do not see Gausman as being worth $18.9 million next season, and that is typically how front offices come to a final decision.