MLB has raised the price on the qualifying offer that must be made to impending free agents to $14.1 million for this offseason, this per the New York Post's Joel Sherman. The price was $13.3 million last winter.
The qualifying offer was brought in as part of the most recent collective bargaining agreement and has had a significant impact on free agency. Teams can extend a qualifying offer to any free agent-to-be on their team (so long as there is no language in his contract forbidding it), the QO is always a one-year deal, and the player may either accept it, or turn it down and become a free agent. In the event that the offer is declined, and the player then signs with a different team, the original team receives a draft pick between the first and second rounds as compensation. The cost of the qualifying offer is connected to the 125 highest salaries in baseball, which is why it can change each year.
There is an added cost to the price of signing a player who has received and declined a qualifying offer: Your 1st round pick in the draft. The top ten draft choices are protected in this scenario, and the signing team would instead forfeit its second pick pick. This has altered the way teams view such players. Last year for example, the Mets were said to be interested in Michael Bourn, but ultimately decided giving up the #11 pick in the draft (in addition to the millions of dollars Bourn would receive) was too steep a price. The Indians first pick was protected, and they'd already lost their second pick when they signed Nick Swisher, so for them, the cost was only their third pick, not nearly as valuable as what the Mets would lose.
Teams have five days after the end of the World Series to decide whether or not to extend a qualifying offer to each of their eligible players. Players then have seven days to decide whether or not to accept the qualifying offer.
The Indians most notable expiring contracts are Ubaldo Jimenez*, Scott Kazmir, and Joe Smith.
*Jimenez is technically under a team option, but he has the right to void that option, which he will at some point between now and the end of the month.
Jimenez should absolutely be extended a qualifying offer. As the best pitcher in the American League after the All-Star break this year, he's worth $14.1M next year. It cuts both ways though, because as the best pitcher in the American League after the All-Star break this year, he'll receive plenty of multi-year deals as a free agent this offseason, which means he'll decline the qualifying offer. The Indians might still work out a deal with him at that point, but at least they'll receive a draft pick if he chooses another team.
Joe Smith is an easy 'no.' Don't get me wrong, he's done a fine job and I'd like to have him back with the team next year, but the list of relief pitchers who are worth $14.1M is very short, and Smith isn't Craig Kimbrel or Koji Uehara.
Scott Kazmir is only player on the Indians about whom there's any debate about whether or not to extend him a qualifying offer. We'll look at his case in greater detail soon. The short of it is, if you think he's the pitcher he was over the whole of the season, you don't make the offer. If you believe he's the pitcher he was after the All-Star break, you do make the offer.