Free Agents are costly, do you sign them or let them go?
Minor league FA's are players that have 6 or more years of experience and not on the 40-man roster. What to do with these players are usually pretty simple when they are asking for the minimum salary, you keep them even if you know they are going to be Rule 5 eligible. When they are asking for a ML salary though, chances are they are not worth keeping and are expendable.
Major League FA's though depends on you and whether you decide if he is worth keeping. There is a myriad or reasons on whether to keep him or not. Do you need him to play a position? Do you have a rookie to take his place? etc etc etc There are three types of ML FA's and their cost depends on their abilities not what they have done on the field.
Most Free Agents are restricted, meaning the previous club has first crack at signing them. That does not mean he will sign even if you meet his demands, the ones that have a message that says I am filing for Free Agency no matter what or I am going to test the FA market first may or may not sign.
All Free Agents fall into one of the following categories:
Type A: Is in the top 20% at his position and costs the most. If you do not sign him during the restricted period he will be open to all clubs at the end of the period. This type of FA will garner compensation picks during the draft. If the signing team has a 1st round pick greater than #16, you will get his pick and a sandwich pick (somewhere from pick #33 and before the first 2nd round pick). Otherwise you will get the sandwich pick and his next available pick.
Type B: Is the top 21% thru 40% at that position. If you do not sign him during the restricted period he will be open to all clubs at the end of the period. This type of FA will garner a sandwich compensation pick only.
None: Just a regular FA and will sign with the highest bidder.
Once the Free Agent market opens, all unsigned FA's will be available to bid on. They will sign with the team that makes the highest offer in most cases. In other words, even if you offer the most, they could sign with another team, though rare. The instructions say there is a $20M cap on salary. As far as it is known at the moment, there is no cap on bonus money even though it says it is $10M. Remember that bonus money comes out of Player Payroll.
You also need to check the note box of the FA you are bidding on to determine his status. You may not want to give up your 1st or 2nd round pick as Type A compensation.
You will also need to pay attention to your in box as agents send messages to you telling you that you need to up your offer or he has signed etc. It is also wise to check the status of the players, sometimes you are no longer his #1 choice and no message is received telling you that.
Minor League FA's work the same way as Major League FA's. You may need to sign a few to fill out your minor league rosters especially pitchers. It is a dog-eat-dog world so be prepared. You can offer them a 1 year contract meeting their demands. You can also be out bid and may need to up your offer. I wouldn't offer no more than a 327K ML contract and a ST invite unless you really want the player. Sometimes they will take another offer because they feel they will get more playing time with another club, position players especially. If they sign with you, you do not need to put them on the roster that equates to their salary as you can put them anywhere in the minors you choose. One big thing to note about minor league FA's is their options, if you offer a ML salary to one out of options, you will need to put him on the ML roster.
If a Free Agent does not sign during the signing period doesn't mean he will walk away in shame and retire or get a job flipping burgers. During Spring Training their demands will ease a bit so keep checking. You have the ability to put them on a target list and check their availability so you don't have to go searching all the time. The cycle after Spring Training is the time to really check on FA's as their Types will disappear and compensation is no longer awarded and their price is usually at rock bottom. Though be wary as these FA's are usually not wanted for a reason other than price. I have found some that are highly useful though, most generally it is because everyone else forgets.