MLB completely overhauls both June Draft & Rule V Draft in new CBA

[jmcclain19]

Pretty substantial changes to how the baseball draft works have been implemented in the new bargaining agreement.

No more draft and follows are allowed - a total change in compensation for not signing a 1st round pick, and a uniform Aug 15th deadline for picks to be signed. Also added years to when players are to be made available for the Rule V Draft - which take effect immediately.

http://www.baseballamerica.com/today...ws/262720.html

New Agreement Includes Draft, Rule 5 Changes

By Alan Schwarz
October 25, 2006

ST. LOUIS -- Overshadowed by more wide-ranging issues and the sheer euphoria of an agreement between Major League Baseball and the Players Association being reached with no rancor or threats of a work stoppage, the structure of the new five-year Collective Bargaining Agreement announced yesterday between labor and management did carry some significant changes to baseball’s amateur draft and player-development pipeline.

Several draft alterations, ranging from a uniform Aug. 15 signing deadline to compensation for unsigned picks, will change how both teams and players experience the process, as well as how much and when money changes hands.

The most notable changes are those that deal with draft-pick compensation--both for teams that fail to sign a high pick as well as those who lose major league free agents in the offseason.

Teams that fail to sign a first-round pick no longer receive an extra pick after the first round as compensation, but instead a virtually identical pick the following year; for example, a team that fails to sign the No. 5 pick one year will receive the No. 6 pick the next, rather than one in the 30s or 40s. The same compensation also now exists for unsigned second-round picks, while a team that fails to sign a third-round pick will receive a sandwich pick between the third and fourth rounds.

The new system should decrease the growth of bonus payments to amateurs, as teams can walk away from negotiations with the reassurance of having a similar pick the next year. (Although that compensation pick, if unsigned, is not subject to compensation, which keeps clubs from using it over and over.) Clubs have for years wanted a system of prescribed, slotted bonuses for every high pick but learned early in the negotiations that the union would not accept it, so instead focused on stronger compensation rules.

"The concern with clubs was to get that club that was drafting as much leverage that they can have, so they can select the best player they possibly can," said former Cubs president Andy MacPhail, a member of ownership’s negotiation team. To the extent that bonus offers will probably either decrease or not grow as quickly because teams can walk away more comfortably, union executive director Donald Fehr said, "It will clearly have an effect. It will clearly not put (players) in the position that they would have been in had slotting been accepted. You have to find compromises."

One other change to the amateur draft is a uniform signing date of Aug. 15 for all players (other than college seniors), replacing the longtime and clumsy deadline of the moment a player literally attends his first four-year college class. In addition to creating some order for all involved--from teams to players to college coaches wanting an earlier idea of their incoming class--this also eliminates the junior-college, draft-and-follow rule in which players who attended two-year schools could sign with their drafting club until one week before the following draft.

Several ideas that have been discussed over the years, such as the trading of draft picks and an either supplemental or combined draft of all players worldwide, were not adopted. Also, the draft will continue to be held in June rather than be moved to July.

"The changes in the draft will help the teams in the bottom of the industry," MLB CEO Bob DuPuy said, "because they’re getting better draft picks."

Some changes have been made to the draft-pick compensation afforded teams which lose major league free agents. Type C free agents have been eliminated, while teams that lose Type B free agents, which had previously received a pick from the signing club, will now get a sandwich pick between the first and second rounds. (This was pursued by the union to remove the disincentive for teams to sign those players.) Those changes go into effect immediately.

The number of players deemed Type A and B has been tweaked as well. Type A free agents, whose former team continues to receive a first- or second-round pick from the signing club as well as an extra pick between the first and second rounds, will be reduced from the 30 percent of players (as determined by a statistical formula) to 20; the Type B band is reduced from 31-50 percent to 21-40.

These changes will take effect next offseason, allowing clubs which lose free agents this winter the same compensation they had always expected. Teams must still offer players salary arbitration to receive draft-pick compensation, though the deadline for that offer was moved up from Dec. 7 to Dec. 1.

The first-year player draft, also known as the Rule 4 draft, was not the only draft process altered by the new CBA. The major league portion of the Rule 5 draft will be affected by giving teams one extra year to protect players from it.

Rather than teams being allowed three years (for players signed at age 19 or older) or four years (for players 18 and younger) before leaving them off the 40-man roster subjects them to the Rule 5 draft, those periods have been lengthened to four and five. Ownership considered this a significant boost in their efforts to operate their minor league systems more effectively.

"It gives the clubs more flexibility with their roster," said MacPhail, who added that the cost to select a player ($50,000) or get him back from the selecting club ($25,000) remain the same.

"Anytime you can give them more tools to operate as efficiently as they possibly can is something we strive to do," he continued. "There are a lot of kids at that stage where you’re just not quite sure whether you want to get that clock ticking--the last thing you want to do is take a talented 22-year-old kid who’s not ready and you develop him for somebody else. Or often you’ll see guys taken out of A-ball who aren’t close but they get plucked out of the Midwest League. You try to let the developing clubs get as much time as they possibly can to make the best decisions they can."

This rule applies to this current offseason, meaning that many minor league players who had expected to either be placed on the 40-man roster or be subject to the Rule 5 draft will have to wait another year. The union did negotiate a higher minimum salary for 40-man roster players optioned to the minor leagues ($60,000 next year), but acknowledged that this was a significant concession to ownership.

"That was one of the major things we had to give up, no question about it--to me it was the worst thing we had to give up," said Diamondbacks infielder Craig Counsell, a player representative to the union negotiating team. "Some players, especially immediately, are going to be hurt by that--this year. But in the end, you have to give up something to get something."

[Team Clark]

Alot of hard work went into this process. There were far more people involved in the "backroom negoatiations" than that of any other time I haver ever heard. This was truly a "collective" process.

[Red Leader]

So, if I'm understanding correctly, if in an amateur draft there are only 19 "stud" prospects and then a pretty big drop off, and you draft 20th, you can pick whoever you want, not sign them and get a #21 pick the following year? Same situation in the 2nd round. You draft 20th in the second round. You only like 19 players in the 2nd round, so you draft someone, don't sign them and get the 21st pick the next year.

Now, what if you are the Royals. You have the #2 pick. You draft a Boras client, don't sign him and finish with the worst record in baseball in 2007. You now have the #1 and #3 picks in the draft for 2008.

Hmmmmm.

[KronoRed]

Punting your first round pick is no longer terrible, someone tell Bowden

[Johnny Footstool]

Originally Posted by Red Leader

So, if I'm understanding correctly, if in an amateur draft there are only 19 "stud" prospects and then a pretty big drop off, and you draft 20th, you can pick whoever you want, not sign them and get a #21 pick the following year? Same situation in the 2nd round. You draft 20th in the second round. You only like 19 players in the 2nd round, so you draft someone, don't sign them and get the 21st pick the next year.

Now, what if you are the Royals. You have the #2 pick. You draft a Boras client, don't sign him and finish with the worst record in baseball in 2007. You now have the #1 and #3 picks in the draft for 2008.

Hmmmmm.

I like it. It allows cheap clubs like the Royals to gain more through the draft without shelling out crazy signing bonuses to unproven kids.

It also allows cheap clubs to re-draft prospects who refused to sign with them the previous year. For instance, some stud HS outfielder gets drafted by a team with the #7 pick, but refuses to sign. The next year, the team gets its regular pick (#10 for the sake of argument) plus the #8 pick as compensation. So they draft the same HS outfielder again (with the #10 pick this time, not with their compensation pick) and tell him he can either sign or go earn $15K playing in the Independent League for a second straight year. No skin off their backs, because they still have a first-round pick and they'll get the #11 pick as compensation next year. Nice.

[TOBTTReds]

Originally Posted by Red Leader

So, if I'm understanding correctly, if in an amateur draft there are only 19 "stud" prospects and then a pretty big drop off, and you draft 20th, you can pick whoever you want, not sign them and get a #21 pick the following year? Same situation in the 2nd round. You draft 20th in the second round. You only like 19 players in the 2nd round, so you draft someone, don't sign them and get the 21st pick the next year.

Now, what if you are the Royals. You have the #2 pick. You draft a Boras client, don't sign him and finish with the worst record in baseball in 2007. You now have the #1 and #3 picks in the draft for 2008.

Hmmmmm.

That's what I thought of too, but can a team like that afford a #1 and #3 pick? That could be $8 mil in bonuses just on your first two picks.

[15fan]

Originally Posted by jmcclain19

Teams that fail to sign a first-round pick no longer receive an extra pick after the first round as compensation, but instead a virtually identical pick the following year; for example, a team that fails to sign the No. 5 pick one year will receive the No. 6 pick the next, rather than one in the 30s or 40s. The same compensation also now exists for unsigned second-round picks, while a team that fails to sign a third-round pick will receive a sandwich pick between the third and fourth rounds.

The new system should decrease the growth of bonus payments to amateurs, as teams can walk away from negotiations with the reassurance of having a similar pick the next year. (Although that compensation pick, if unsigned, is not subject to compensation, which keeps clubs from using it over and over.)

Seems to me that the guys who get selected with comp picks are going to end up with a heck of a lot of leverage. I think that a couple years into this, the owners are going to regret this.

I wish they would have modified the rules so that either draft picks could be traded, or that draftees could be traded much earlier than the current 1 year obligation with the drafting/signing team.

[Red Leader]

Originally Posted by Johnny Footstool

I like it. It allows cheap clubs like the Royals to gain more through the draft without shelling out crazy signing bonuses to unproven kids.

It also allows cheap clubs to re-draft prospects who refused to sign with them the previous year. For instance, some stud HS outfielder gets drafted by a team with the #7 pick, but refuses to sign. The next year, the team gets its regular pick (#10 for the sake of argument) plus the #8 pick as compensation. So they draft the same HS outfielder again (with the #10 pick this time, not with their compensation pick) and tell him he can either sign or go earn $15K playing in the Independent League for a second straight year. No skin off their backs, because they still have a first-round pick and they'll get the #11 pick as compensation next year. Nice.

Good find, Johnny. I was just about to type...no they wouldn't get a compensation pick the 2nd year, but I see what you're saying...don't use the comp pick to draft him again, use your regular 1st round pick and then you will get compensation for that the next year.

Why wouldn't all teams do this? Why wouldn't you punt your 1st round pick this year and get 2 next year. Even if you do it in the 2nd round this year. Draft one solid player and one total reach pick with the other first rounder. Worst case, you've got two picks every year. Best case you've got two studs to add to your farm system and only 1 pick the next year...

[Mario-Rijo]

Originally posted by AvesIce51
That's what I thought of too, but can a team like that afford a #1 and #3 pick? That could be $8 mil in bonuses just on your first two picks.

I wonder how soon it will be before some f.o. (Bowden?) guy decides that he can do that to skirt a year, sign the comparable pick next year and not sign the other 1st rounder until some dollars come flowing in from some expected TV deal or some big salary comes off the books etc. They can't do it to the same guy/pick more than once but they can do it with there other pick year after year.

[Johnny Footstool]

Originally Posted by Red Leader

Why wouldn't all teams do this? Why wouldn't you punt your 1st round pick this year and get 2 next year. Even if you do it in the 2nd round this year. Draft one solid player and one total reach pick with the other first rounder. Worst case, you've got two picks every year. Best case you've got two studs to add to your farm system and only 1 pick the next year...

It might be difficult to punt a 1st rounder if you found a good one. However, it would certainly make sense if you drafted in the lower half of the first round. You could simply make an extremely lowball offer and pocket the draft pick if he turned it down.

[Gallen5862]

I like the fact that the first 3 rounds in the draft are allowed comp picks for not signing the previous years picks. I also like the fact that players get 1 more year before having to be protected in the Rule V draft. What happens to this years draft and follows? Will they still be allowed to sign before the 2007 draft?

[KronoRed]

/\
The new agreement doesn't go into effect until next year, so yes they will.

[Gallen5862]

Thanks Kronored. I was thinking it would still be allowed. It was confusing that somethings start now with new arbitration offer deadline of Dec 1.

[IslandRed]

Originally Posted by Red Leader

Why wouldn't all teams do this? Why wouldn't you punt your 1st round pick this year and get 2 next year. Even if you do it in the 2nd round this year. Draft one solid player and one total reach pick with the other first rounder. Worst case, you've got two picks every year. Best case you've got two studs to add to your farm system and only 1 pick the next year...

Well, for one thing, if all teams didn't sign their first rounder this year, next year's first round would have 60 picks in it. There would be a dilution issue.

One of the things the article doesn't make clear is how the comp picks dovetail with the regular picks. The example is that if #5 doesn't sign its pick, next year it gets #6. I think that probably means the comp pick comes after the #5 regular pick but before the #6 regular pick, not that the team is guaranteed the sixth overall pick for its comp.

[Slider]

Originally Posted by Red Leader

Why wouldn't all teams do this? Why wouldn't you punt your 1st round pick this year and get 2 next year. Even if you do it in the 2nd round this year. Draft one solid player and one total reach pick with the other first rounder. Worst case, you've got two picks every year. Best case you've got two studs to add to your farm system and only 1 pick the next year...

Remember that these negotiations are not in a vacuum. If MLB teams find a way to abuse the rules and punish draftees in an effort to force down signing bonuses...you can bet that will be the focal point for the next CBA.

It gives the teams more leverage...but given all things equal...we really want the best players we can get each year working their way through our system so they can help the Reds on the field or be available to trade for MLB players at positions of need.

It is not in our best long term interest to punt draft choices...but it does protect us better if we make a good faith offer and the kid won't sign...we at least salvage the draft pick.