Free agency in Major League Baseball is one of the simpler issues we’ll deal with in this offseason series. Thankfully, it was also made significantly less complicated by the current collective bargaining agreement, which went into effect two off seasons ago.

The basics of free agency are that players with at least six years of Major League service time and are not otherwise under contract with a team are free agents. These players are free to sign with any team, and become free agents the day after the World Series ends.

The following 2013 Cubs will be free agents at that point: RHP Scott Baker, RHP Kevin Gregg, RHP Matt Guerrier, and C Dioner Navarro. OF Ryan Sweeney would have been a free agent as well, but the Cubs signed him to an extension earlier this month.

The wrinkles in free agency are the tender and free agent draft compensation systems, although these were simplified by the current CBA. Under the old CBA, a team could receive draft compensation for a player if he was rated a Type A or Type B free agent by Elias Sports Bureau. A player was a Type A free agent if he was one of the top 20 percent of players, and a Type B free agent and between 21 and 40 percent. To obtain draft pick compensation for a Type A or Type B free agent, the player’s current team had to offer arbitration to the player, he had to reject arbitration, and another team had to sign the player.

If the free agent was a Type A free agent, the signing team gave up a first round draft pick, unless their pick in the first round was in the first half of the next year’s draft. Then they would give up a second round pick. If the signing team previously signed a Type A free agent, and then signed a second Type A free agent, they would give up their pick in the next eligible round. So, for example, if a team with the fourth worst record in baseball signed two Type A free agents, it would lose its second and third round picks. However, if a team with the fourth best record in baseball did the same, it would lose its first and second round picks. Those draft picks would go to the team who lost the player to free agency, which would also gain a supplemental pick in a sandwich round in the first and second rounds. The Elias rankings determined the order of the picks in this sandwich round. In other words, the player that the Elias rankings thought was the best would garner the first pick in the sandwich round.

For Type B free agents, the signing team would not lose any draft picks. Instead, the team that lost the player to free agency received a supplemental draft pick in the aforementioned sandwich round, but behind the Type A free agents.

This system tied whether players would be tendered arbitration heavily to their value as compared to other players at their position, and to their arbitration award in their final year in arbitration. For example, a decent closer who made $6 million in his final year of arbitration eligibility, but tallied enough saves to be labeled a Type A free agent, could be tendered arbitration. This would either let the pitcher’s team from the prior season keep him on a one year deal through arbitration, or get two high round draft picks as compensation.

Under the new system, the team that had the free agent the prior season must tender him a “qualifying offer”: a one year contract for at least the average annual value of the 125 most expensive contracts in baseball to obtain draft compensation for a departing free agent. For this offseason, a qualifying offer will be a one year, $14 million deal. However, teams can only obtain draft pick compensation for players they controlled for the entire preceding season. For example, the Texas Rangers cannot obtain draft pick compensation for Matt Garza, who they picked up from the Cubs in July. But the Cincinnati Reds can obtain draft pick compensation for Shin-Soo Choo, who they traded for last offseason and was on the Reds for the entirety of 2013.

After being tendered a qualifying offer, the player has 7 days to decide if he wants to accept the qualifying offer. If he accepts the tender, he agrees to the one year, $14 million deal. If he does not, he is a free agent.

The team that signs a free agent who rejected a qualifying offer will give up a draft pick. If the team has one of the first ten picks in the draft, it will lose its second round pick. If the team does not have one of the first ten picks in the draft, it will lose its first round pick. As with the old system, if a team signs a second player who was tendered a qualifying offer, it will give up its pick in the next eligible round.

However, the team losing the free agent won’t get the pick the signing team gave up, instead getting a pick in a sandwich round between the first two rounds. Also, as there is no ranking of the free agents, the draft order is decided by which free agents are signed first. For example, both Robinson Cano and Carlos Beltran are pretty likely (guaranteed in Cano’s case) to be tendered one year, $14 million contracts, which at least Cano is guaranteed to reject, and Beltran is somewhat likely to. No one would argue that Beltran is a better player than Cano at this stage in their careers. But if Beltran signs with a team aside from the Cardinals on November 30 and Cano signs with a team aside from the Yankees on December 1, the Cardinals would get an earlier pick in the sandwich round than the Yankees.

How This Affects the Cubs

The Cubs aren’t losing much in free agency this season, with the biggest loss being backup catcher Dioner Navarro. Navarro was fantastic at the plate last season, and will likely try to turn his strong 2013 into a 2014 starting gig. Considering the defensive and OBP strides that Welington Castillo made last season, combined with his low, controlled cost, the Cubs are unlikely to be able to offer Navarro anything close to a starting job, and I doubt they will be able to bring him back.

Matt Guerrier and Kevin Gregg are both gone. Guerrier was a salary for salary dump in the Carlos Marmol trade, and was never expected to come back, even before suffering a major injury at the end of the season. Regarding Gregg, the Cubs appear to want to give Pedro Strop the opportunity to close in 2014, while Gregg might try to parlay a decent, but likely better in his mind than reality, season, into another shot to close somewhere else. On top of that, Gregg clashed with Cubs management in a pretty public way at the end of this season, making it even less unlikely the Cubs desire his services.

Baker had decent results in his return from Tommy John surgery at the end of the season, but awful peripherals. The Cubs might look to bring him back, but I would be surprised if it would be on anything more than a split contract, which would start as minor league deal but allow Baker to exit the contract by, say, April 30, if he isn’t on the Major League roster.

As far as adding players through free agency, the Cubs’ first round draft pick (fourth overall) is protected. However, I still find it unlikely that the Cubs will sign anyone they would have to give their second round pick up to get, unless they decide to get in on the bidding for a Cano, Ellsbury or Choo. I think it is unlikely the Cubs end up as serious bidders for any of those three, all of whom are likely to sign contracts for at least 5 years and very close to $100 million. I could see them in on a whole host of players who aren’t tendered contracts, though, from Carlos Beltran types (older former stars who might cost more money than the players the Cubs have signed recently, but likely won’t need more than 2 year contract), to the David DeJesus/Scott Feldman/Nate Schierholtz/Paul Maholm signings they’ve made over the past two seasons.

If the Cubs are going to go big after someone, I’d bet on Choo. I know a lot of people like to connect the Epstein/Hoyer front office to Ellsbury because of the Boston ties, but Ellsbury’s best asset (speed) is one that has a tendency to fade quickly as a player proceeds through his 30s. Choo is a .400 OBP hitter with solid power, which the Cubs could desperately use. I have a feeling the bidding is going to get too high for the Cubs on a guy with an injury history who should only play left field and struggles against same handed pitching, but that would be my bet.

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Noah Eisner is a Chicago attorney living in the western suburbs with his wife and son (and impending daughter). When he isn’t practicing law or entertaining a toddler, Noah follows Cubs baseball with a focus on the farm system and sabermetric analysis. His Cubs-related ramblings can be followed on Twitter @Noah_Eisner.