*Free Agency Bidding Procedures*

[Ben (Rays GM)]

Free Agency will begin Sunday, January 20 at 12:00 pm (noon) 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 and discounts will be applied after (but don't forget that they're there of course). 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).
• Penalties: Like discounts, but they raise the cost of the contract. Penalties are applied to one-year contracts that exceed $10 million and two-year contracts that exceed $20 million.

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 $500,000, or $0.5 million. Discounts cannot reduce a salary below this amount.
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. For example:

A one year, $11 million offer becomes $11.5 million (It's $1 million over the limit so it receives a $0.5 million penalty, becausr 50% of $1 million = $0.5 million).
A one year, $15 million offer becomes $17.5 million (It's $5 million over the limit so it receives a $2.5 million penalty, which is 50% of $5 million)
A one year, $20 million offer becomes $25 million (It's $10 million over the limit so it receives a $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 - $2.5 million penalty because it exceeded the limit by $5 million).

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.

Note that you are allowed to outbid yourself on a player, but it does not reset the 24 hour clock.

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.

Discounts can no longer reduce a contract to the league minimum! So if you bid 0.6 million on a player on whom you would typically receive a discount, the salary will NOT be reduced to the 0.5 million league minimum. This is to prevent playoff teams from having too significant an advantage in their ability to sign players to minor league deals (see below)

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, but we ask that you please limit yourself from doing so excessively - if you've already opened multiple free agents in a given day, please consider giving somebody else a chance. 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.

You may not open the bidding on a player whom you non-tendered anytime during the same offseason. If you non-tender a player you may still bid on that player, but you'll need to wait for somebody else to open him (or ask a friend to do it), or else wait until secondary free agency.

Compensation:

You receive compensation if a player who belonged to your team for ]the entirety of last season signs with another team for a raw annual value of $15 million or more. There will be a compensation round (Comp Round B) in between the second and third rounds of the Amateur Draft. However, if the player's total salary exceeds $50 million over the course of the contract, your pick will instead take place in Comp Round A, which is between the first and second rounds of the draft (even if the raw annual value is below $15 million). The order of the comp rounds 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 must 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, probation, or other consequences.

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. In other words, players in your minor leagues can count as "available money..." as long as you're willing to cut them. 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.
Another way to think about this is you can bid more than the amount you have available, as long as you have a straightforward, error-proof plan to get back under. This plan cannot involve trades or any other unknown variables, since there's no guarantee that you'll be able to make them work. That leaves minor league cuts and non-tenders as your options. If you're going to be bidding over your cap, you must be prepared to execute on this plan should it come to that.

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.

New for 2019: minor league contract rule change
Last year there were some complaints that playoff teams had too strong an advantage when it came to their ability to sign players to minor league contracts (all contracts of 0.5 million are considered minor league deals). Minor league contracts are an extremely powerful tool because you can cut or demote any and all players earning 0.5 million at any point, with no penalty. The problem is, if a non-playoff team opens the bidding on a player at 0.5 million in the hopes of signing them to a minor league contract, a playoff team who might then become interested in signing the player to a minor league contract could come in and bid 0.6 million. With the playoff discount, the 0.6 million bid would become 0.5 million. This meant playoff teams could swoop in and steal potential minor league contract candidates from non-playoff teams every single time. These complaints have been heard, and I agree this advantage is unfair. If Team A does their research and finds an intriguing player worthy of a minor league contract, Team B shouldn't be able to get them for the same minor league contract just because Team B made the playoffs. Team A found the player and thus Team A should be the one to potentially benefit from the minor league deal. If Team B wants the player, a major league offer should have to be tendered. Moving forward, this is how it will work.

• Discounts cannot reduce a player's contract below 0.6 million. If I offer 0.6 million and have a 5% playoff discount, the contract will still end up as 0.6 million. If I offer 0.7 million and have multiple discounts, the contract will be reduced to 0.6 million but no less. The absolute only way to sign a player to a minor league 0.5 million contract is to be the opening bidder and offer 0.5 million.
• In order to prevent one team from spamming and signing huge numbers of minor league contracts at once, the maximum number of minor league offers per team per day is two. You can only open two players at 0.5 million in a single day. If you're offering more than 0.5 million then you may open more than two players. But only two may be opened at 0.5 million.

[Ben (Rays GM)]

Sample Bidding:

Subject: Babe Ruth

Babe Ruth, OF
2017 team: Yankees

Red Sox bid one year, $0.5 million

The Red Sox did this exactly right. They included the player's full name, position, and 2017 team, and they remembered to post their own bid as well (0.5 million, the minimum bid). 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, $0.6 million

Because of the 2019 rule change on minor league contracts, even though the Yankees would receive a playoff discount on Ruth, the discount would not reduce the salary to 0.5 million. Discounts can't reduce a salary any lower past 0.6 million

We're still in one year deal range, since the minimum for a two year deal is $2 million per year. The next bidder can keep raising the bid by small increments, but if they want to go to a two year deal it must be 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 can't beat the Red Sox on length alone. They 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 four years, $4.5 million ($18 million total)

This is fine. The annual amount hasn't been increased, but because of the additional year this is still a better offer.

Yankees bid two years, $5 million per year ($10 million total).

More money per year means this is now the offer to beat, even though it's for fewer years.

Red Sox bid one year, $8.0 million

Oh look, the Red Sox must be getting impatient, they've jumped all the way up to $8 million.

Yankees bid two years, $9 million per year ($18 million total)

Now things are really moving. The Yankees could have offered just $8 million per year 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 $90 million per year, or one or two years for at least $9.5 million per year.

Red Sox bid four years, $9 million per year ($36 million total)

More years, same annual value = better offer.

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, 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 the Dodgers' 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. Also, the Yankees have now earned a comp pick on Ruth if they fail to sign him, since the annual value has reached $15 million. It would be in comp round B, however, since the total value of the contract is still far less than $50 million.

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. One year offers would still incur penalties.


...
...
...


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 the second year and a 5% discount for each additional year offered beyond that, so 20% total for four years (two year = 10%, three year = 15%, four year = 20%). That means they're only paying $12 million per year (20% of 15 million is 3 million, 15 minus 3 is 12). 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)]

Starting free agents have been posted! These were selected semi-randomly by the commissioners (random numbers from a pre-chosen set of top options). Bidding may begin tomorrow (Sunday) at noon. Threads will be unlocked prior to that time.

Playoff discounts for 2019:

Toronto Blue Jays (10%)
Arizona Diamondbacks (5%)
Seattle Mariners (5%)
Baltimore Orioles (5%)
Los Angeles Angels (5%)
Tampa Bay Rays (5%)
Cleveland Indians (5%)
Colorado Rockies (5%)
Washington Nationals (5%)
Chicago Cubs (5%)
Philadelphia Phillies (5%)
Los Angeles Dodgers (5%)

[Ben (Rays GM)]

As a reminder, ANYONE can open the bidding on a free agent, as soon as there are less than 10 on the board (as soon as one reaches 24 hours since the last bid).

If you have already opened one free agent in a given day, or if you've opened a disproportionate number overall, it is good form to wait a few minutes to give other people a chance to open one who may not have done so, or to post in the chatango reminding/offering other GMs the opportunity. That said, there is no official rule or limit to the number of FAs a GM can open.

(There is a maximum of two players opened at the minimum $0.5 million per GM per day, however. This is unlikely to matter with these early FAs who will all go for significantly more money, but as we reach the end of FA this rule will ensure all GMs have an equal opportunity to sign players to minor league deals).

[Ben (Rays GM)]

For the remainder of the offseason (from today until Tuesday), the maximum of ten open free agents no longer applies.

INSTEAD there is a maximum of two free agents opened per team, per day.