*Free Agency Bidding Procedures*

[Ben (Rays GM)]

Free Agency will begin Sunday, January 15 at 12:00 pm ET. The starting ten free agents will be announced prior to this time by the commissioners.

New information for this year is in red.

Terms you should know:

Raw annual value: The per-year value of a contract offer before discounts are taken.

Discounts: Discounts are applied after the bidding for a free agent has ended. You do not need to worry about applying discounts when making your bid - just bid using Raw Annual Value, keeping the discounts in mind, and discounts will be applied after. Discounts are given for signing a hometown player, offering more years, and making the playoffs or winning the World Series the previous season. In certain cases, contracts also receive penalties, which is the opposite of a discount - basically, you're paying a luxury tax (this happens when signing one or two year contracts above a certain threshold).

Bidding:

Free agency will be an auction where you make bids by offering contracts to players. You win a player if nobody beats your offer for 24 hours.

The best offer will always be the one with the higher raw annual value unless two GMs offer the same raw annual value but for a different number of years - if raw annual value is equal the player will choose the offer with more years.

Each player will have a thread in the free agency section. There will be ten free agents being bid on at a time. Bidding will be done by replying to the thread with your offer. Your offer should include the number of years you are offering and the raw annual value of the offer.

Each offer must be better than the previous offer - you must either offer the same raw annual value but for more years, or you must offer a higher raw annual value - see sample bidding (below). Once the bidding on a player reaches $2 million per year, subsequent bids either must be at least $0.5 million per year higher or must increase the length of the contract. Once the bidding on a player reaches $10 million, subsequent bids must be at least $1 million higher unless they increase the length of the contract.

Minimum offers for the primary round:

The minimum salary for a one-year contract is $400,000, or $0.4 million.
The minimum salary for a two-year contract is $2 million per year.
The minimum salary for a three-year contract is $3 million per year, and the minimum salary for a four-year contract is $4 million per year.
Four years is the maximum contract length.

In real life, premium free agents typically sign multi-year deals. It's difficult to sign a premium free agent to a one or two year deal. In our league, we simulate this difficulty by applying penalties on expensive short contracts. Basically, in order to sign a premium free agent to a short contract, it's going to cost you extra. On one-year contracts that exceed $10 million, 50% of the amount by which the offer exceeds $10 million will be added to the offer after the completion of the bidding.

A one year, $11 million offer becomes $11.5 million ($11 million exceeds $10 million by $1 million, 50% of $1 million = $0.5 million).
A one year, $15 million offer becomes $17.5 million ($2.5 million penalty, which is 50% of $5 million)
A one year, $20 million offer becomes $25 million ($5 million penalty, which is 50% of $10 million)

Likewise, two year offers exceeding $20 million per year receive a penalty of 50% of the amount by which the offer exceeds $20 million.
(Two years, $25 million per year becomes $27.5 million per year).

This penalty is added after the bidding is complete but before other discounts are calculated and applied - to beat this bid, another GM need only beat the offered raw annual value, not the amount after the penalty is added.

Discounts:

Free agents favor longer contracts, so you'll receive a discount by offering more years. For a two year contract offer, you take 10% of the raw annual value of the contract as a discount after the bidding. Each additional year offered you will get to take off a 5% discount from the annual value of the salary after the bidding. Two year contracts will get a 10% discount on the annual value. Three year contracts get a 15% discount. Four year contracts get a 20% discount, and four years is the maximum length. So, if you win the bidding on a player by offering 4 years/40 million, or an annual value of $10 million, the player's contract becomes $8 million per year (20% off of $10 million). If it's an offer of 3 years/30 million, also an annual value of $10 million per year, then his contract becomes $8.5 million per year, (15% off of $10 million).

So even though the winner is always the contract with the highest annual value (or equal annual value but more years), longer contracts do end up being cheaper per year because of the discounts.

In addition to discounts based on contract length, there are also hometown discounts (10%) given when you sign a player who finished the previous season with your team, and also discounts for offering players a chance to sign with a winning team - you will get a 5% discount the following offseason after making the playoffs and an additional 5% discount if you were the World Series champion or lost the World Series on a tiebreaker.

Opening New Free Agents:

Once a free agent is won, a new one may be opened so that there are ten free agents being bid on at a time. Anyone can open the bidding on the new free agent. If you notice that a free agent has been won (24 hours have passed since the last bid) but no one has opened a new free agent yet, you can be the one to do it. Create a new thread with the player's name, and post the player's name, position, and his most recent team before free agency (see the way Ruth is listed in the sample bidding below). Assuming your thread is posted first, your player will be the new free agent. If someone else posted before you did though, you should delete your post so as to avoid confusion (the commissioners will delete any bidding threads that they notice were opened prematurely. There should never be more than ten free agents being bid on, so if at any point you notice that there are more than ten, please reply to the free agent that was opened last saying that the player was opened in error and should not be bid on). To open a player, you must also bid on him, so please post your bid as well.

Compensation:

You receive compensation if a player who finished the last season with your team (any player on whom you could have received a hometown discount) signs with another team for a raw annual value of $15 million or more. There will be a compensation round in between the first and second rounds of the Amateur Draft, and the order of that round will be determined by the annual value of the contracts, from highest to lowest.

Eligible Players:

Players who are eligible for free agency include all of (and are limited to) the following:

1. Any players who have achieved one year of service time (over 130 ABs for hitters, over 50 IPs or over 25 games for pitchers) who are not on a roster. This includes players who have achieved six-years of service time and thus are no longer cost-controlled, players formerly signed as free agents whose contracts have expired, and cost-controlled players who have been non-tendered.

2. Any players who have not achieved a year of service who are or will be 24 or older on January 1 of this offseason. These "24+ year old rookies" may be bid on despite not having completed a year of service. These are the same group of players as those non-rostered 24 year olds that were eligible to be taken in the Rule V Draft, with one important difference: they also include players who have not yet spent a year in the minors, including international free agents. However, if the player has not played professionally in the USA (majors or minors), then the player must have a professional contract with a US team in order to be bid on. You may not bid on an international free agent who has never played in the US until after he signs a contract officially. The commissioners reserve final judgment on whether the contract can be considered official. Commissioners also reserve the right to veto any player opened in this manner if it seems this rule is being used in an unforeseen way that could have an unintended impact on the game. These players may not be bid on in secondary free agency. Penalties on one and two year contracts above $10 million and $20 million respectively still apply.

Miscellaneous:

1) If you sign a free agent who has fewer than six years of service time to a deal that expires before the player accumulates six years of service time, that player may be kept until the completion of his sixth year of service at 50% of the annual salary of his original contract, unless the original contract was for $5 million or less annually, in which case you can put him on a regular cost-control schedule instead.

2) If a player officially retires during the offseason while you have him signed to a long-term veteran contract, you are obligated to pay him for the following year, and nothing more. If the player officially retires during the regular season, you will be obligated to pay him for the remainder of the season and nothing more. You must inform the commissioners if you would like to apply to drop a contract for this reason, and we will use our discretion as to whether the retirement can be deemed official.

3) You may not withdraw bids once they have been made. Please do not delete your bids. Being caught doing this may result in a fine or probation.

4) You may not bid more money than you have available. If you have 50 million available and you have two bids for 20 million each that are still leading, and another player comes up who you want, the most you can bid is 10 million unless one of your other bids gets beaten. However, you can always cut minor leaguers for a little extra wiggle room, so if that same GM who had 50 million available also had 10 million in minor leaguers, they can bid up to an extra 10 million if they're willing to take that risk. The risk with that is that if they were to win all three free agents at 20 million, now they'd have to cut all of their minor leaguers in order to get back under cap. Teams can have 48 hours to try to make a trade before they cut minor leaguers, but at the end of 48 hours they will have to cut prospects immediately or face severe penalties to be determined by the commissioners. Since non-tendering can now be done at any time during the offseason, you may also count money tied up in non-tenderable players in your flexible cash.

Starting free agents will be randomly selected from a list of the most desirable free agents to be subjectively determined by the commissioners. If there are specific free agents that you want us to add to the pool before the random drawing that you think might not otherwise be on our radars, please message us their names and we will add them to the drawing so that there's a chance they get opened up. Starting free agents will be announced ~24 hours prior to the start of free agency.

[Ben (Rays GM)]

Sample Bidding:

Subject: Babe Ruth

Babe Ruth, OF
2015 team: Yankees

Red Sox bid one year, $0.4 million

The Red Sox did this exactly right. They included the player's full name, position, and 2015 team, and they remembered to post their own bid as well. The subject line is simply the player's full name.

The next bid must be for higher raw annual value. Two year contracts have a minimum raw annual value of $2 million so unless the next team wants to pay at least $2 million per year, he must make a one year offer


Yankees bid one year, $1.0 million

Same as before. You cannot offer two years at $1 million per year, so either offer more money on a one year deal, or a two year deal worth at least $2 million per year (or a three year deal worth $3 million per year, or a four year deal worth $4 million per year)


Red Sox bid one year, $2.0 million

Now that the player has reached $2 million, all future offers must either be for $0.5 million more per year, or must be for more years. So another team could offer one year at $2.5 million, or they could offer two years at $2 million each (or a three year deal worth $3 million per year, or a four year deal worth $4 million per year)


Yankees bid two years, $2.0 million per year ($4 million total)

Even though the Yankees offered the same amount per year, they offered more years so they currently have the winning offer. And remember that because of the discounts, the Yankees will end up paying a bit less than $2 million per year (it's a two year contract so they'll get to take 10% off per year, making it $1.8 million per year, plus they also get a hometown discount). Three year contracts must be for at least $3 million per year, so the Red Sox have the following options here: either they must offer a one or two year deal worth at least $2.5 million, or they can offer a three year deal worth at least $3 million (or a four year deal worth $4 million per year).


Red Sox bid one year, $2.5 million

The Red Sox made this a one year offer again. The Yankees can offer either one year at $3 million, two years at $2.5 million per year, three years at $3 million per year or four years at $4 million per year (of course, they can also offer more).


Yankees bid three years, $3.0 million per year ($9 million total).

Even though the Yankees could have bid two years at $2.5 million per year, they decided to skip right to three years at $3 million per year. The Red Sox can bid one year at $3.5 million, two years at $3.5 million per year, three years at $3.5 million per year, or four years at $4 million per year.


Red Sox bid four years, $4.0 million per year ($16 million total).

There are no five year contracts allowed, so the Yankees must bid at least $4.5 million, regardless of how many years they offer.


Yankees bid three years, $4.5 million per year ($13.5 million total).

The Red Sox must offer at least $5 million per year for one, two, or three years, or match the $4.5 million per year for four years.


Red Sox bid one year, $8.0 million

Oh look, the Red Sox must be getting impatient. The Yankees can outbid by offering $8.0 million per year for two, three, or four years, or $8.5 million per year for one year.


Yankees bid two years, $9.5 million per year ($19 million total)

Now things are really moving. The Yankees could have offered significantly less on a two year deal, but I guess they figured the Red Sox would have just outbid them, so why not cut to the chase. The Red Sox can offer three or four years for at least $9.5 million per year, or one or two years for at least $10 million per year.


Red Sox bid four years, $9.5 million per year ($38 million total)

Hmm, maybe the Red Sox are afraid to go to $10 million because they don't want to give the Yankees a compensation pick, so they went for 9.5 million over four years... The Yankees cannot offer five years, so they must offer at least $10 million now, regardless of the number of years.


Yankees bid four years, $10 million per year ($40 million total)

The Yankees stuck with the four year offer, but upped the annual value. The Red Sox must offer $11 million per year, regardless of the number of years, because once the bidding reaches $10 million increases must be by $1 million or more. Also, since the bidding reached $10 million annual value, the Yankees will now receive a compensation pick if they fail to sign Ruth, and any future one-year offers will receive a penalty.


Dodgers bid one year, $15 million

Hey, a new team has joined the bidding! The Dodgers seem eager to sign Ruth on a one year contract, and have jumped in with an aggressive bid. They are allowed to bid as much as they want on a one-year deal, but they should realize that they will be paying a penalty of $2.5 million on this offer should they win the bidding, because it is a one-year deal exceeding $10 million. The $2.5 million figure is half of $5 million, the amount by which Brooklyn's one year offer exceeded the $10 million cutoff. That penalty is added after the bidding ends, however, so the Yankees need only beat a one-year, $15 million offer.


Yankees bid four years, $15 million ($60 million total)

That'll do it! The Dodgers or Red Sox could beat this offer by bidding at least $16 million per year for any number of years. If it's a one year offer, however, it would end up costing $19 million, since it would receive a $3 million (50% of $6 million) penalty.



...
...
...

24 hours have passed. The Red Sox and Dodgers didn't top that offer. The Yankees win Ruth with an offer of four years, $15 million per year. But, since they offered four years, they get discounts. They get a 10% discount for offering more the second year and a 5% discount for each additional year offered beyond that, so 20% total for four years. That means they're only paying $12 million per year. They also get a 10% hometown discount, making it $10.5 million per year. And, if they had made the playoffs last year or won the league, they'd get even more discounts.

Yankees sign Babe Ruth to a four year, $42 million contract ($10.5 million per year).

[Ben (Rays GM)]

Discounts 2017:

Rays 10% (Playoffs and World Series)
Blue Jays 5% (Playoffs)
White Sox 5% (Playoffs)
Angels 5% (Playoffs)
Tigers 5% (Playoffs)
Yankees 5% (Playoffs)
Diamondbacks 5% (Playoffs)
Astros 5% (Playoffs)
Rockies 5% (Playoffs)
Marlins 5% (Playoffs)
Padres 5% (Playoffs)
Mets 5% (Playoffs)

[Ben (Rays GM)]

A couple little things:

1) to check the exact time of a post on a computer, hover your cursor over the timestamp. If you put the cursor over where it says "23 hours ago" for example the exact time of the post should pop up.

2) you don't need to worry about seconds when watching the clock trying to post a free agent at exactly the right minute. If the free agent went up at 10:53:20 am, yours can go up as soon as it hits 10:53:00. Excessively early threads will be deleted. Unintentionally early threads (by a few seconds, for example) will be allowed to stand if no new threads are opened at the correct minute, but if another thread is opened immediately upon space opening up the early thread will be deleted.

[Ben (Rays GM)]

Outbidding yourself (in order to change the number of years offered) is permitted as long as it takes place before the 24 hours expire. Doing so will not extend the 24 hour clock as it would still be a case of a single team leading the bidding for 24 hours.

The only potential exception would be if you outbid yourself at the same second that another team beats your first offer but not your second offer. Example

8:00 Rays bid two years, $8 million

9:15 Rays bid one year, 9 million

9:16 Blue Jays bid three years, $8 million

In the above example it can be presumed that the Blue Jays intended to beat the original 2 year 8 million offer but didn't see the one year 9 million offer when they posted since they were nearly simultaneous. Since their offer doesn't beat the Rays' offer, the Rays would still have the leading bid, but the 24 hour clock would be reset to 9:15.

Other instances of bids being invalid due to a higher (or equal) bid being posted sooner but nearly simultaneous will be handled at the commissioners' discretion, with the understanding that our priority is to give everyone ample opportunity to bid as long as they still wish to do so.

[Ben (Rays GM)]

Not an official rule, but as a general guideline, if you've already opened a free agent, please give other people a chance to open one before opening another that same day. For the folks accessing the mobile version of the site there are no time stamps, so it's much more difficult to determine the time that a free agent was won and make a to-the-second post. This friendly rule should give everybody a fairer chance to open their targets.

Once a few minutes have passed, if nobody else has opened somebody up, then it's fair game.

[Ben (Rays GM)]

There have been a number of free agents opened without listing the 2016 team. This makes it difficult to know who should get the comp pick and hometown discount.

When it comes to comp picks I've gone ahead and looked it up myself, but when it comes to hometown discounts I haven't done that. So if you've won players who you think you should have a hometown discount for, I highly suggest you go look to make sure I applied it, and if not, please let me know either by PM or commenting directly in the bidding thread.

Please remember to post 2016 teams in the future when opening free agents. You can use the 2016 Final Rosters: pro-gm.proboards.com/thread/5068/2016-final-rosters (they're not 100% accurate if a guy was traded at the deadline, but they're better than nothing).

[Ben (Rays GM)]

With the start of the regular season, primary free agency is now closed. Players currently being bid on are still open, but no new threads may be opened. Instead, please open new threads in secondary free agency. There are a few key differences between primary and secondary free agency:

1) Discounts no longer apply. What you bid is what you pay.

2) Only one-year contracts may be offered.

3) Only players who have completed a year of service prior to 2017 can be bid on.