Roster Rules - The Rule 5 Draft

Yesterday, I talked about the Rule 4 Amateur Draft. Today I move on to the Rule 5 Draft.

The Rule 5 draft is done every year in December. Only certain players are eligible for this draft:

• Players must not be on any team's 40 man roster. There is a deadline for this roster to lock.
• Players who signed at age 19 or older are eligible if they have been in the organization for 4+ years.
• Players who signed before age 19 are eligible if they have been in the organization for 5+ years.

The draft order is set in the same way that the Rule 4 draft is set, by won-loss record for the previous season. The difference with this draft is that each team can only draft if they have a spot available on their 40 man roster for this player.  If they do draft someone, they are required to keep that player on their 25 man roster for the entire next season. They are not able to send them back to the minor leagues without at least offering the player back to their original team first. As a result of this, the draft has been used mostly of late to find high potential pitchers who can be hidden down in the major league bullpen.

There is also a minor league portion, where players in A or AA can be drafted, and must be kept in AAA for the whole season.

Notable examples of players found via this draft: Johan Santana, Josh Hamilton, Shane Victorino, Joakim Soria


Sources:

Wikipedia

Roster Rules - The Rule 4 Amateur Draft

The Rule 4 amateur draft is held each year in June. It is 50 rounds long, and also includes the compensatory picks related to free agency. The draft order is set based on the previous season's win-loss record, with ties being broken by the team's win-loss record for the season prior to that.

Eligible Players:

Any players who have not signed a contract who fit the following criteria:

• Resident of the U.S., Canada, or any U.S. territory
• They must have graduated from high school, but not attended college
• They must have attended a 4 year college and be either 21, or in their junior or senior year.
• They must have attended a community or junior college.
  

Once a player is drafted, they have a certain window to sign a contract with a team. For most players, that window ends on August 15th. College seniors who have graduated (or run out of eligibility), have a longer window, due to their not being able to return to school any longer. If a team fails to sign their pick, they may potentially receive a compensation pick in the following year's draft, depending on what round the player was drafted in.

If a player does not sign by the end of their window, their age will determine when they will be eligible to be drafted again. For players drafted out of high school, they will not be eligible until they meet the requirements for college players. For college players, they will be eligible in the following year's draft. Notable examples in previous years include Aaron Crow, and Tanner Scheppers.

Each year, the office of the Commissioner gives out guidelines for what the signing bonus of each pick in the draft should be. The logic is that the best player available should be the top selection, and receive the highest signing bonus. This is also known as the slotting system. However, many teams do not adhere to it, as it is not a requirement to do so.

Analysis:

Since players drafted generally take between 2 to 4 years to make an impact at the major league level, organizations try to minimize their risk at the draft. This can include drafting players based on signability rather than talent, drafting lower ceiling players with a higher potential to reach their ceiling, and avoiding talented players with makeup concerns. This can lead to some unusual choices from time to time.

The slotting system does not help teams to land the top players available all the time, since it is only a suggestion and not a requirement. A great example was Rick Porcello. When Porcello was eligible to be drafted, he was widely viewed as a top-5 draft pick. However, knowledge of his contract demands became public, and many teams shied away from him due to concerns about signability. Since he was a high school student, if he didn't sign, he could simply go to college, and wait 2 years to be drafted again. As a result, he fell to the end of the first round, when he was drafted by the Detroit Tigers, and received a contract well over the slot suggested by the commissioner's office. The Tigers were willing to pay him what it took to get him signed. The reason that this has become a bigger problem is that it works, as evidenced by the season that Porcello had in 2009. If he had not signed with the Tigers, he would have been eligible to be drafted this coming season in 2010. The Tigers' willingness to pay Porcello what he believed he was worth impacted this season, as well as future ones as well.

Also, the fact that international players are not subject to the draft has become a point of contention. All international players who have not signed contracts are considered to be free agents, and a player can be signed after June 2nd of the year that they turned 16. As a result, teams that can offer better development opportunities and better money will generally get these players, leaving the other teams out of the process.

The Rule 4 draft is going to be a hot topic of discussion when the next collective bargaining agreement negotiations begin, and could very well see some large-scale changes with wide-ranging impacts on the market for players.

Sources:
Wikipedia
Sons of Sam Horn

Links for 11/10/09

• The San Jose Giants were named Minor League Baseball's franchise of the year. I've been to a couple of their games, and they do a very good job trying to get people to the games, and they were always fun in my opinion.
• Khoi Vinh has an interesting read about the correlation between revenue, payroll, and success in the Majors. 
• R.J. Anderson over at FanGraphs has a new article about the discrepancies involved with the Elias Free Agent Rankings. It's a valid point.
• Johanna Wagner over at Love My Team has an article about the case against collusion since 2002. 
• An older article, David Sabino of SI.com ranked each team's performance in the draft over the last 10 years (prior to the most recent draft).