The writing had been on the wall ever since the Jays traded for Michael Saunders, but now Melky Cabrera is officially gone, having signed with the White Sox for 3 years, $42MM.
You can go back and forth over whether Saunders is a downgrade from Cabrera. It comes down to this: Saunders is a better defender and baserunner, and Melky is a better hitter. In the end, I'd say Cabrera is more valuable - even if they have produced (and project to) comparable WAR totals, Saunders gets a lot of his value from defense, and defense seems (to me, anyway) to be a bit over-valued by WAR. It's not a landslide for Melky - but it's a tangible downgrade.
On top of the head-to-head comparison between the two left fielders, you have to consider Saunders' health, his cheaper salary, the fact that Melky is on the wrong side of 30, having to give up the not-totally-useless Jah Happ to get Saunders, and whether the Jays will spend the $10MM difference between the two salaries on much-needed pitching help. What Melky's signing does do is provide an excuse to go over how compensatory draft picks work. So, in case you're interested, here goes:
1. A prospective free agent player who is given a qualifying offer (1 year, at the average dollar value of the 125 richest contracts, about 1 yr/$15MM) by his former team has the option to take the qualifying offer (QO) or decline it. If he takes it, he returns to his former team at that salary. If he declines, he becomes a free agent, and his former team gets a compensatory draft pick if the player signs with a new team before the next season's draft day (the following June).
2. When the free agent that turned down the QO signs with another team, that team forfeits its highest unprotected draft pick in the following year's draft. The top 10 picks in the draft are "protected" and can't be lost in this way. Compensatory picks from free agents who signed elsewhere are not protected.
3. The compensatory pick that a team that loses a free agent receives falls in a round between the first and second round of the draft. The pick that was forfeited by the team that signed the free agent has no bearing on the positioning of the compensatory pick. If multiple teams hold compensatory picks, they pick in the same order they would pick in the draft (i.e. in reverse order of finish). Compensatory picks cannot be traded.
4. The order in which free agent signings happen is, as far as I can tell, irrelevant. If a team forfeits a first-round pick and a second-round pick due to signing QO'd free agents and then one of its own QO'd players signs elsewhere, the team gets its second round pick back, but forfeits the compensatory pick, instead.
So: The Jays lost the 18th pick in the draft by signing Russell Martin. This pick doesn't go to the Pirates, or anywhere else - it 'disappears', and everyone below the Jays in the draft order moves up 1 spot. The Pirates get a pick in the compensatory round. The White Sox then signed Melky Cabrera. The White Sox hold the 8th pick in the first round, which is protected, so instead, Chicago loses its highest un-protected pick (their second-round pick). As when the Jays lost their #18 pick, this pick vanishes. The Jays get a pick in the compensatory round for 'losing' Cabrera. As it turns out, the Jays compensatory pick is currently the #31 pick in the draft, while the Pirates compensatory pick is #33. This difference is due to the Jays having a worse record than the Pirates in 2014 - the worse record picks higher.
If more teams lose picks in the first round due to signing free agents, the Jays' compensatory pick would move up one spot for every pick forfeited ahead of them.
If the Jays sign another free agent that received a QO (say, James Shields), they forfeit the compensatory pick they received for losing Cabrera.
Now that I have all that figured out, I hope MLB doesn't go changing the system again for a few years...