What Constitutes an Offer?

An inside look at how the free agency process works.

Via our fine message board, I was asked to comment about others asserting that the Cardinals did not make an offer to free agent outfielder Brian Giles. Following is what I replied.

I decided to share it here and expand on the whole offer process based on some additional email questions received since.

Message Board post – November 26

"By nature, these are all rumors (as opposed to proven fact). In these kinds of situations, everyone has motivations that are not entirely in sync.

Team management might want one spin to protect their interests in negotiations with this player or another or to try to influence public perception.

The agent's motivations are always clear - to get the best deal possible for his client. The agent might be concerned he won't get that if other teams assume his player has locked in on one team and is simply waiting for them to decide.

There are others who may not have any motive other than to share information as they think they heard it. Those could be friends, relatives, other players, etc...

It could be very likely that Bernie and I are talking to different people with different views of the same situation. I am certainly not accusing anyone of lying. However, the use of "wiggle" words can enable one to say one thing in public and another in private.

For example, there is the gray area as to what actually constitutes an "offer". Does it have to be written? Does it have any contingencies? Is there an expiration date, etc.?

Obviously, I cannot disclose my ongoing source for this information, but I am confident what I have been reporting is accurate, both about the Cardinals as well as other teams who have made bids to Giles.

Did the Cardinals discuss years and money? Yes. Are those terms still on the table? I don't know.

As an aside, a Toronto writer said this yesterday. "InsideTheDome has confirmed from multiple sources that the first offer Giles received was about ten days ago from the St. Louis Cardinals. That offer was a three-year contract, worth $27-28 million."


Of course, none of this really matters if Giles doesn't sign with the Cardinals, anyway. Making an offer that isn't accepted isn't news that is particularly enduring.

I'd love to report the news of an agreement or signing. But, that doesn't seem imminent."

More detail about the process

In reading about the NBA and NHL, you've probably seen the term "offer sheet" mentioned more than once. In those systems, there is a formal process for certain free agents that enables former teams to basically match the contract terms offered by a new prospective team. The offer sheet lays out those details in a consistent manner.

While Major League Baseball is different, with the arbitration process and compensation picks as the primary levers to pull, there is still an instrument that is a lot like an offer sheet that plays a role here. According to an insider who has had ongoing personal involvement with the process, here is a summary of how it works.

In the earlier stages of the free agent dating process, after enough discussion to know there is real interest, the team's general managers office sketches out an outline of the basics of the proposed deal. This is provided to the player's agent.

The items included in this outline are generally the total amount of money, the payout schedule of the money, the years involved and a date that states how long the outline is valid. It is typically very concise - no more than one or two pages in length.

If the player accepts the outline, then the agent and the team exchange proposals for a contract. At this point, the final terms have not yet been agreed to. Areas of further negotiation could include items like signing bonuses, no-trade clauses and incentives for innings pitched or awards, for example.

I am told that the common word used around baseball for all of this is "an offer" because the term is simple and can be understood by most people. As illustrated here, the term could be loosely applied to multiple steps in the process, however. As a result, establishing a clear understanding of where a particular player currently stands in the journey can be very difficult.

The actual contract is much longer than the one or two page outline, including line after line and section after section of legalese that probably no one reads, including the player. The good news is that most of that document is boilerplate – standard details that make up what is called the "Major League Uniform Player's Contract".

The Uniform Player's Contract governs such standard areas as how the player and the club should behave. Its details are negotiated as part of the Basic Agreement between the players and owners, for which the current agreement expires after the 2006 season.

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