Qualifying Offers (QO) – this is a rule that was negotiated into the collective bargaining agreement between the owners and players union before the 2013 season. Since then, any time a player that is entering into free agency declines an offer of sufficient level of salary, a “tag” of sorts is placed on that player. This salary line-in-the-sand is calculated as the average of the top 125 salaries from the previous season. From there on, any team that signs a player with the QO tag must forfeit their first round draft pick in return for the privilege of signing that player to a deal. This forfeited draft pick is awarded to the team that made the QO to the player as compensation for losing him. There is a wrinkle to this: if you finished with one of the 10 worst records in the previous year, and therefor have one of the top 10 picks in the following, your 1st round pick is protected; these teams surrender their second best pick instead. The whole purpose behind this rule is to increase parity in the league. The QO setup takes from the rich and gives to the poor in a sense. It’s effectiveness has come into question recently, as it often drags down the value of players saddled with the QO tag on the open market. Here’s more, from MLB Trade Rumors.