True, but that $3.25m can be in addition to other money that he can bid on an IFA. It can put him over the top for a winning bid.
Here's what I did in a similar situation. Don't make the offer now. Hold onto the money and see if a better prospect comes along in IFA. If by the end of the regular season you haven't seen anybody else worth signing, then offer this guy the money.
I did that with a second round pick who wanted over $5m on a second demand after refusing his first demand. I wasn't really high on him., so I held back, knowing that I had a Type D in my pocket at worst. No decent IFA's came along, so I gave him the $5m after the regular season concluded.