MLB Roster Rules: Rule 4 Amateur Draft

SECAUCUS, NJ - JUNE 07: MLB commissioner Bud Selig speaks during the MLB First Year Player Draft on June 7, 2010 held in Studio 42 at the MLB Network in Secaucus, New Jersey. (Photo by Mike Stobe/Getty Images)

Baseball can be the most intricate sport of any, and certainly overwhelming to the casual fan. With player movement never at a stand still, whether it be a player designated for assignment or an arbitration hearing, we thought it would be a good idea to go over some of the key roster rules that teams must adhere to, and help define them. Next up is the First-Year Player Draft, also known as the Amateur Rule 4 Draft.

The First-Year Player Draft/Amateur Rule 4 Draft is arguably the most unique as well as complex draft system of the major sports. Unlike other major sports, the draft is held during the season in early June. The draft is comprised of 50 rounds and two compensatory rounds that span over the course of three days. There used to be more than 50 rounds (talk about excessive), but rarely were there any serviceable players selected. The most notable, future Hall of Famer Mike Piazza (62nd round).

The Basics

As mentioned above, the Rule 4 draft is held in early June for three days and comprised of 52 rounds in total - 50 rounds and 2 compensatory rounds. Teams can acquire draft picks in the compensatory rounds, but there is no trading of draft picks allowed. The 30 teams draft in reverse order from the previous season's winning percentage. If two or more teams finish with an identical record, the lower (closer to 1) draft pick is awarded to the team that finished with the worst winning percentage from two seasons prior. There are several ways for the draft order to change; more on that below.

Trading

Teams can not trade draft picks at any time. No drafted player can be dealt until at least one calendar year after signing.The loop hole is to put a PTBNL (player to be named later) in the draft, and complete it once the date arrives. For example, the Rockies traded Ubaldo Jimenez to the Indians for Alex White, Joe Gardner, Matt McBride, and a PTBNL. Everyone in the industry knew the PTBNL was Cleveland's 2010 first-round selection Drew Pomeranz, but it couldn't be made official until the one calendar year was up.

Eligibility

Straight from MLB's rules:

A player who is a resident of the United States or Canada and who has not previously contracted with a Major League or Minor League Club, so long as the player is eligible to sign under the High School, College or Junior College Rules contained in Major League Rule 3. For purposes of Rule 4, the term "United States" means the 50 states of the United States of America, the District of Columbia, Puerto Rico and any other Commonwealth, Territory or Possession of the United States of America. Players attending high school, college or junior college in the United States or Canada are considered residents of the United States or Canada for purposes of draft eligibility.

  • Players attending a four-year college can't be drafted until their junior or senior year.
  • Students attending Junior/Community College are eligible for the draft in any year.

Signing

A selected player may sign with the team that drafted him from the time of selection until August 15th 11:59 PM EDT. However, the player may decide against signing and return to school before the August 15th deadline. Players and teams can't always come to an agreement, whatever the case may be. A team (usually) receives compensation if they fail to sign any of their draft picks in the first three rounds, and the two compensatory rounds; more on that below.

Failed Signings

As we mentioned above, a player and the team don't always come to an agreement. Some players are set on going back to school, but it usually is an issue with money. Rarely will a college senior fail to sign, but if it does he ___. 

Anyways, if the two parties fail to come to an agreement, the team receives one slot higher for next year's draft. For example, the Blue Jays failed to sign their #22 overall pick Tyler Beede this year. Their compensation will be the #23 overall pick for next year's draft. Remember, this only applies for the first three rounds and two compensatory rounds. 

Protected Picks

The first fifteen picks (not counting compensation picks for unsigned draft picks) in the MLB Draft are protected from free agent compensation. This means even if the Astros sign Jose Reyes, they won't forfeit the #1 overall pick in the 2012 draft to the Mets. Houston would instead give the Mets their next pick, likely a second-round selection.

Free Agent Compensation

Every year, the Elias Sports Bureau ranks free agents based on their most recent year's statistics compared to their peers. The top 20% of players are classified as a Type A, the next 20% as Type B, and the rest are just normal free agents. Teams usually offer "arbitration" to their Type A and Type B free agents, in hopes to collect draft pick(s) from them.

Teams that lose a Type A free agent, receive a first-round draft pick (Top 15 protected) from the team that signs the player and a draft pick for the sandwich round (between round 1 and 2). Contingent on the Type A free agent declining the team's arbitration offer.

Teams that lose a Type B free agent, receive one supplemental pick and the team that signed the player doesn't lose anything. This is also contingent on the Type B free agent declining the team's arbitration offer.

Note: We'll have more on free agent compensation and arbitration, which can get messy, later in the series.

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