Phillies Offseason Guide: Trades, Options, Opt-Outs, Qualifying Options, Arbitration, Non-Tenders, and the Rule-5 Draft
The Philadelphia Phillies lost Game 6 of the 2022 World Series in Houston on Saturday night, marking the official end of the Major League Baseball season. Unlike other major sports, baseball wastes no time in starting the offseason.
Following the conclusion of the World Series, key dates and decisions are already underway. Here’s a full guide on everything you need to know, as well as notable Phillies players to watch this offseason.
When does MLB Free Agency Begin?
Players become free agents the day after the conclusion of the World Series, however they cannot sign with a new team until five days after the end of the World Series, meaning Thursday November 10th at 5PM would be the official start date of free agency. During the next five days, teams have the liberty to retain free agents that were on their roster.
Trades
The trade market officially opened the day after the conclusion of the World Series.
Contract Options
An option is the potential extension to a player contract which was negotiated at the time the contract was signed. If the option is not exercised, the player becomes a free agent. All options must be exercised within five days of the conclusion of the World Series.
Club Option: The team has the full authority to decide whether or not a players’ option will be exercised.
Example 1: Jean Segura has a club option for the 2023 season.
Jean Segura signed a 5 year / $70,000,000 contract with the Seattle Mariners, including a $3,000,000 signing bonus, $70,000,000 guaranteed, and an annual average salary of $14,000,000. In 2023, Segura will earn a base salary of $17,000,000, while carrying a total salary of $17,000,000.
Jean Segura Contract Notes via Spotrac
- 2023 Club Option includes a $1M buyout
- Full No Trade Protection
- Trade Assignment Bonus: $1M (earned in 2019)
Example 2: Aaron Nola has a club option for the 2023 season.
Aaron Nola signed a 4 year / $45,000,000 contract with the Philadelphia Phillies, including a $2,000,000 signing bonus, $45,000,000 guaranteed, and an annual average salary of $11,250,000. In 2023, Nola will earn a base salary of $16,000,000, while carrying a total salary of $16,000,000.
Aaron Nola Contract Notes via Spotrac
- 2023 Club Option: $4.25 million buyout
Player Option: The player is the one who determines whether or not to exercise the option year.
Mutual Option: Can only be exercised if the team and player both agree to it.
Vesting Option: Negotiated option that only becomes guaranteed if the player reaches certain defined statistical thresholds in the previous season. (Typically, these are based on plate appearances, innings, games played or games finished.)
Example 1: Zach Eflin has a vesting option for the 2023 season.
Zach Eflin signed a 1 year / $5,700,000 contract with the Philadelphia Phillies, including $5,700,000 guaranteed, and an annual average salary of $5,700,000. In 2023, Eflin will earn a base salary of $15,000,000, while carrying a total salary of $15,000,000.
Eflin has a vesting option for the 2023. A vesting option is negotiated option that only becomes guaranteed if the player reaches certain defined statistical thresholds in the previous season. (Typically, these are based on plate appearances, innings, games played or games finished.)
Zach Eflin Contract Notes via Spotrac
- 2023 Mutual Option includes a $150,000 buyout.
Innings Pitched Incentives (not earned)
- $50,000 each for 100, 125
- $75,000 for 150
- $125,000 for 175
Opt-Outs
An opt-out is a negotiated contract provision in which a player can opt out of his remaining contract and become a free agent.
Qualifying Offers (via MLB.com)
A qualifying offer is a means by which teams can receive Draft-pick compensation should a particular departing free agent sign with another club.
Teams can only receive compensation if they have made a qualifying offer to the free agent, and such an offer can only be made to players who have never received a qualifying offer previously in their career and who were on the team’s roster for the entirety of the previous season (i.e., were not acquired via trade midseason).
The qualifying offer is a one-year offer worth the mean salary of MLB’s 125 highest-paid players. This value changes by the year. For the 2022-23 offseason, the value is $19.65 million. The offers must be made to eligible players within five days of the conclusion of the World Series, and players then have 10 days after that to accept or reject.
If the free agent accepts the qualifying offer, he is bound to his team from the previous season for another season. If he rejects the offer, he is free to explore free agency. If he signs elsewhere prior to the next amateur Draft, the team that lost him receives a compensatory Draft pick. The team that signs a player who rejected the qualifying offer is subject to the loss of one or more Draft picks (though a team’s highest first-round pick is exempt from forfeiture).
Teams have until five days after the World Series to extend a qualifying offer to their free agents. The players who receive the offer then have 10 days to decide whether or not to take it. If they reject it, they are immediately eligible to sign with another team.
Arbitration (via MLB.com)
Players with three or more years but less than six years of Major League service time are eligible for salary arbitration if they do not already have a contract in place for the upcoming season.
For the 2022-23 offseason, the arbitration deadline is Jan. 13, 2023.
If arbitration-eligible players and their teams have not agreed to a contract by a certain date in mid-January, they must both put forth a salary figure for the upcoming season and a hearing is scheduled for February. If they still can’t come to an agreement by the time of the hearing, a panel of arbitrators listens to each side’s case and then selects one of the two salary figures (nothing in between) as the player’s salary for the upcoming season.
Rhys Hoskins and Jose Alvarado will enter final year of arbitration
Rhys Hoskins is in his last year of Arbitration with an estimated Luxury Tax Salary of $12.8 million. He will become an unrestricted free agent in 2024.
Jose Alvarado is in his final year of Arbitration with an estimated Luxury Tax Salary of $4 million. He will become an unrestricted free agent in 2024.
Non-Tendered (via MLB.com)
When a club “non-tenders” a player on its 40-man roster (i.e., not yet eligible for free agency), it has declined to give that player a contract for the upcoming season. The player then becomes a free agent.
When this happens, it is typically because the player’s likely raise in the arbitration process exceeds what the club projects his on-field value to be. Or a club can non-tender a player simply to clear a spot on the 40-man roster.
The decisions made at the non-tender deadline can often significantly expand the free-agent player pool.
The 2022-23 offseason’s non-tender deadline is Nov. 18.
Rule-5 Draft (via MLB.com)
A draft that allows clubs that do not have a full 40-man roster to select certain non-40-man players from other organizations. Essentially, it is an avenue for teams to identify and give a Major League opportunity to talent that they feel has been held back elsewhere.
Players signed at age 18 or younger must be added to their club’s 40-man roster within five seasons or else become eligible for the Rule 5 Draft. Players signed at 19 or older must be protected within four seasons.
Like the amateur Draft (officially known as the Rule 4 Draft), the Rule 5 Draft is held in reverse order of standings from the previous season. Unlike the amateur Draft, not every club will make a selection in the Rule 5. Those that do must pay $100,000 to the club from which the player was selected, and the player must remain on the new club’s 26-man roster (or injured list) for the entirety of the following season or else be placed on outright waivers. If the player clears waivers, he must be offered back to his original team for $50,000 and can be outrighted to the Minors only if his original team does not take him back. (This prevents teams from pilfering players from other teams and then stashing them in their Minor League system.)
This winter’s Rule 5 Draft will be held Dec. 7.
More on the Phillies Offseason
Top Free Agent Shortstops >>
Phillies Pitching Free Agents >>
Phillies Guaranteed Contracts 2023 Season >>
