The Rule 5 Draft
How we can improve the opportunity for promising minor leaguers
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After writing about final offer arbitration and proposing a salary cap the previous two weeks, I wanted to dive deeper into the MLB rulebook.
Today, we will talk about the Amateur Draft’s less sexy sibling- the Rule 5 Draft.
Unlike Arbitration, the Rule 5 Draft is a win for players, as those who get selected are likely put on quicker path to playing in a major league game.
The problem? It’s impact is small….and could be way bigger. 2019 saw 11 players selected and 2018 saw 14. Baseball can do better.
Background
The Rule 5 Draft is marketed as a “second chance” for minor leaguers who have been with their clubs for multiple years. If another team views the player as talented enough to make their 40 man roster- and potentially the active 26 man roster- they are free to select him.
Like most things in baseball, there are some complicated rules:
Like the Amateur Draft, teams select in reverse order from last year’s standings. Any team can select an eligible player (more on that below) or pass on their pick.
If selected, the player must remain on the new team’s active roster for the entire year. He cannot be optioned or designated to the minors, but he can be waived.
Players are ineligible for their first 4 years after being drafted (5 if they were 18 or younger when drafted).
Teams can protect any player by putting them on their 40 man roster.
Given the rules above, the best minor leaguers are always shielded from the draft in one of two ways:
Top prospects are likely already be protected, as they are within their first 4 years of playing minor league baseball.
Additional prospects can be placed on the 40 man roster to remove their eligibility from the draft.
And teams aren’t stupid. Since these rosters are finalized in November- when games are not being played- teams can strategically put their otherwise unprotected players on the 40 man roster specifically to protect them.
Execs are right to do this- their job is to win and the rules are what they are. The questions is: Are these rules good for baseball?
The Good
There are arguments to be made for why teams should be able to protect some, if not all, of their top prospects.
Some teams invest heavily in the minor leagues. They have more affiliates and spend more on scouting, analysis, and player development. It is unfair to allow the teams that do not invest similarly to poach talent from those who do.
The Bad
Baseball is far from the only sport where top teams have backups who would be valued starters for less competitive teams…Aaron Rodgers sat behind Brett Favre for three years before getting his shot!
However, what is fundamentally different about baseball is the embedded financial structure where players are rewarded for being on the active MLB roster. Not only are major leaguers paid better, but they accrue service time, getting closer to arbitration and eventually free agency.
Contrast this to the Aaron Rodgers example: While he was backing up Brett Favre, he was still being paid like a first round NFL quarterback, and he was getting closer to a large pay day via free agency with every day that passed.
The Fix
Before we get to the solution, we should lay out the goals:
Any change should have the big picture goal of putting the best product on the field. Baseball should have a long term view. Growing the game will always start with delivering the best product.
Teams should be able to keep top prospects in their organization. If a club invests in the minor leagues and player development, they should reap the benefits.
However, players should not be overly harmed due to the quality of their organization. We should be OK with some negative effects (hard to prevent an equal platform for all), but this has to be limited.
With that in mind, I would propose a few changes:
Lower the time between drafting a player and having them eligible for the Rule 5 draft to two years- at least for post college players who may be ready sooner.
Limit roster shuffling after the season, or limit shuffling at the beginning of the next season. In some fashion, we need a better way of figuring out who the 40 most big league ready players really are.
In exchange for the two rules above, teams can block any player from entering the Rule 5 Draft by starting their service time- and must commit to keep the clock going for the entirety of the following season. While the player may spend the season (and maybe multiple seasons) in the minors, they will still get closer to arbitration and free agency…and these are the milestones that make a major difference in their livelihood.
Will People Say Yes
Maybe, maybe not. This should be a win for players. The bigger questions is if owners will be OK with any change that limits their cost control.
Owners should say yes. These changes are a step to a better on the field product. By committing service time to any player an organization wants to protect, we will limit top prospects from being held in the minors to solely to slow the clock towards free agency- a practice that harms the on-field product.
Future stars in the league earlier is better for fans. And what is better for fans is better for everyone.