MLB's New Free Agent Compensation Rules Are Incredibly Complicated, So Let's Break Them Down

Teams are divided into 3 groups to formulate a draft order in case of a tiebreaker where two teams submit the equivalent round bids. If your team signs a qualified free agent, it still has to surrender a draft pick. Have never signed major or minor league contract High school players: During the early years of Major League Baseball, amateur players were essentially free agents straight out of high school. The Basics

NFL Salary Cap, Contracts, Salaries, Bonuses and Analysis

Navigation menu

Louis Cardinals , Los Angeles Dodgers , and New York Mets —attempted to defeat the proposal, but they failed to convince a majority of teams, and in the end only the Cardinals voted against it. Originally, three separate drafts were held each year.

The June draft, which was by far the largest, involved new high school graduates, as well as college seniors who had just finished their seasons. Junior college players were required to wait until their current season was completed before they could sign. Early on, the majority of players drafted came directly from high school. Between and , only seven college players were chosen in the first round of the June draft.

In a study of drafts from to , Baseball Prospectus writer Rany Jazayerli concluded that, by the s, the gap in production between the two groups had nearly disappeared. Jazayerli presented another research study [21] which included an analysis of those players drafted since , but instead of breaking them into college or high school draftees, he segregated them by their age on draft day. In the study published in Baseball Prospectus, which included a follow up article of the financial benefits, [22] Jazayerli concluded that the very young players return more value than expected by their draft slots.

Since the inception of the draft, the youngest player ever drafted in an early round is Alfredo Escalera. Initially, the draft succeeded in reducing the value of signing bonuses. It would take until for a drafted player to receive a bonus higher than Reichardt's. Player salaries continued to escalate through the s. High school players possessed additional leverage, as they had the option of attending college and re-entering the draft the next year.

Agent Scott Boras routinely exploited this advantage to increase the contracts of his clients. Increasingly, teams drafted based on whether or not a player was likely to sign for a particular amount of money, rather than on his talent.

This became known as a "signability pick. In effect, the rule prohibited a high school draftee from attending college and re-entering the draft after his junior or senior seasons.

The Major League Baseball Players Association filed a legal challenge, but Major League Baseball argued that, since the Players Association did not represent amateur players, it was not necessary for the union to agree to the change. The first-year player draft has historically had far less media exposure than its counterparts in the other leagues for three primary reasons:.

The draft was the first to be televised live, on June 7, Since the draft , the first round of the draft has been broadcast annually on MLB Network live and in prime time from its studios in Secaucus, New Jersey. The general draft order is the reverse order of the previous year's standings. If two teams finish with identical records, the previous year's standings of the two teams is the tiebreaker, with the team having a worse record receiving the higher pick.

Prior to , a team retained the rights to sign a selected player until one week prior to the next draft, or until the player enters, or returns to, a four-year college on a full-time basis. This was known as the "draft-and-follow" procedure. Starting in , the deadline for signing a drafted player is July A selected player who enters a junior college cannot be signed until the conclusion of the school's baseball season.

A player who is drafted and does not sign with the club that selected him may be drafted again at a future year's draft, so long as the player is eligible for that year's draft. A club may not select a player again in a subsequent year, unless the player has consented to the re-selection. A player who is eligible to be selected and is passed over by every club becomes a free agent and may sign with any club, up until one week before the next draft, or until the player enters, or returns to, a four-year college full-time or enters, or returns to, a junior college.

In the one-week period before any draft, which is called the "closed period", the general rule is that no club may sign a new player. Currently, teams can earn compensatory picks in the draft based on departing free agents who reject a Qualifying Offer from their respective team.

The draft saw major changes to the compensation rules. This was implemented as part of the most recent collective bargaining agreement CBA between MLB and its players' union, which took effect with the season.

Before the draft, free agents were ranked by the Elias Sports Bureau based on their previous two years of playing, and against players of similar positions. Players were categorized as either Type A or Type B, or fell into the category of all other players. Below is a description of each free agent class and the compensation the free agent's former team received when the player signed with a different team.

A team that signed a Type A player gave its top draft pick to the club that the player left; that club also received a supplemental pick in the "sandwich" round between the first and second rounds. A team that lost a Type B player received a supplemental pick, but the signing team did not lose a pick.

There had previously been a third class of "Type C" players, but that was eliminated in the CBA. To earn a compensatory pick, a free agent must have been either signed before the arbitration deadline in early December, or offered arbitration by their former team but still signed with another team. Compensatory picks that one team gave another via this method were the highest available pick that team had, with the exception of picks in the top half of the first round.

If a team that picked in the top half of the first draft signed a Type A free agent, they would give up their second-round pick. If a team owed two other teams draft picks via Type A free agents, the team whose departing player had a higher score got the higher-ranked pick. A team could not lose picks it earned via compensation.

The post rules for this aspect of the draft are similar, except that the "Type A" and "Type B" designations no longer exist see below. The order of the supplemental round between the first and second rounds, a feature that will remain in place in and beyond, is determined by inverse order of the previous year's standings. Under pre rules, Type A picks were made first, and then the order reset for all the Type B compensation picks.

In a feature that did not change with the most recent CBA in , teams can also earn compensation for unsigned picks from the previous year's draft. If a team doesn't sign a first or second round pick, they will get to pick at the same slot plus one the following year. For example, if the team with the 5 pick does not sign that player, they would have the 6 pick the following year. The regular draft order would continue around those picks.

For compensation for not signing a third round pick, teams would get a pick in a supplemental round between the third and fourth rounds. If a team fails to sign a player with one of these compensated picks, there is no compensation the following year. Six of these were "Modified Type A"—meaning that the signing team did not forfeit a draft pick, but the player's former team received a compensatory pick in the same position it would have earned under regular Type A rules.

The remaining five were "Modified Type B", with compensation identical to that for other Type B free agents. Starting with the draft, free agents are no longer classified by "type". Instead, a team is only able to receive compensation if it makes its former player an offer at least equal to the average of the richest contracts. I think it needs to be status quo until there is a formidable amateur system in place. Most of this outcry comes from Cuban born players.

Mostly because it was untapped and they have a national league. As a 16 year old from DR, there is no negotiating leverage in place to prevent owners from colluding to depress salaries. Players and coaches are the only ones that matter, which should be obvious to everyone. By an international draft do they mean separate drafts or combining college , high school, and foreign all into one draft or two separate drafts per year? MLB is proposing a 10 round draft with a bonus pool with sliding amounts based on where a team finishes the prior year.

Similar to the way the amateur draft is held in the US, but with much smaller total bonus pools and slot amounts. It is not equitable as they proposed it.

If an international draft is instituted as the owners have proposed, those independent coaches have no monetary incentive to continue to do what they have been doing for generations.

Without them, far fewer kids will even start learning the game in those countries. I take more issue with the semantics, not the claim itself. Do MLB and the Players Association really have enough time to work out the details of an international draft between now and the end of the current CBA, even if they could agree on one in concept?

Aim for or 19 or something. There should be some penalty for signing the top free agents on the market, and forfeiting a top draft choice should be that penalty. However, the qualifying offer system should be changed.

An international draft will never work in baseball. At that point, they either get drafted or they are undrafted free agents, but no one can sign as a free agent until after they have submitted to one MLB draft.

These comments make me realize you have no clue about Latin American international amateurs. Btw such a system would never work nor should it. Posting systems are there to assist teams stay afloat. And the hypocrisy would be hilarious if there was a surprise overseas league who took your teams favorite and best players and there was no compensation to boot.

Since laws differ in other countries, will those registering for the MLB draft have to be 18 to sign a contract or will we allow juniors in high school in the US to be eligible for the draft? How many rounds will the MLB draft be increased to? Who can register the kid for the draft? What will the bonus pool and slot money be increased to in order to accommodate those extra rounds and the influx of talent in the draft?

In the US an amateur player cannot have an agent, but most of the independent coaches also operate as the international players agents. There are dozens more major issues with an international draft that I have read about and I am certain that the union and the owners have others they are concerned about.

Its not a simple matter at all. We have seen teams but draft picks already. A few teams could essentially buy out drafts. Creating a talent discrepancy equal to the NBA. This just allows players to move more freely. A team should be compensated. In every other job you can quit if someone offers you more money.

Well I mean loyalty. They usually spend 4 years in the minors making not much more than 8, until they are put on the 40 man. Then they have years of team control. So they are usually under team control for years. What determines who gets a QO or what? The international draft should be its own animal players should have to apply and if they are not drafted they are free agents but to become a free agent they that to apply at least once and the minimum age should be the same as the US.

Leave the Asia system as it is for free agents but allow high school students and those without service time in the pro leagues to apply for the international draft so they always have the pro leagues to fall back on. MLB should also try to help expand the professional leagues in Latin America to give them fall back options. Also they need to set up locked bonuses like the NFL for both the US and international draft to keep it fair for the small market teams.

To fall back on? The age limit is 16 so that they have an actual chance to try and catch up to American and Asian players. They are literally signed on how strong an arm they have, speed, power, etc. The amateur system is not close to what people are accustomed to. Rookie ball is high school for these kids from the DR. If we lived in a world full of completely honest and ethical people you could really just have a two round draft for the top talent and then let teams do whatever with the rest of them.

It would be too easy of a system to exploit, though. These players have already had to decline the QO so they essentially could have to sign 1yr deals lower than the Freest free agency in sports?

Whoever that source is, has a very small bubble. Likely stopping at the US border. Most slanted financial system in sports maybe, if the top slice of players get paid and the top slice of teams get paid, well to heck with everyone else.

Freest for the players, with no strings attached. The owners would vote for it, to keep the 17 year old from the Dominican Republic out of pro baseball. The system is now heads I win, tails you lose favoring richest owners with largest population ………..

In lieu of a compensation round pick, the team that loses a free agent who rejects a qualifying offer should get the cash equivalent amount of the qualifying offer from the signing team as compensation. The concept is good, the money is ridiculous. This would take a less valuable resource than draft picks, i. In fact demanding cash FA compensation would be an easy way to force a lockout. Keep the no-declaration system in place.

Less high schoolers and JC players would be snagged in the 35th round and more would go undrafted and be able to negotiate with multiple teams, cleverly bypassing the draft entirely.

NCAA players, however, will not see much if any change no matter what happens. Why does it make sense to you? Why would it be in the best interests of baseball in your opinion? Make the awarded picks comp picks, and the signing team does not lose picks.

Also, for the love of god, just make all draft picks tradeable, including international draft picks if there is one. I think a hard pre arb pay scale with limited FA at 4 years where a team has to offer them a certain amount or else other teams can go after them. Plus the system has shown that it has no impact on the top tier free agents, ala Greinke. I think they should keep the QO but amend it in a way that makes it similar to the old system. I think draft compensation is imperative although if they continue the 1st round picks, I think attaching an average in years and the current system in salary is necessary.

That draft similar to the Rule 5 opt out rules. I also do not believe that big market teams should be fully subsidizing small market teams. Boom there it is. The biggest issue financially is that a significant portion of the league just does not get the solid reliable cash flow it takes to sign mega contracts without directly affecting their ability to fill a roster out on the other end.

But does the team losing that player still get a compensation round pick? That would at least give the smaller market teams something in return, assuming they offer them the one year arbitration deal and the player declines.

An international draft the way that MLB has it laid out hurts far more people than it helps. Baseball America posted an article that makes more sense than an international draft. Without them, baseball dries up there. Give ALL teams the same amount of money to spend. Today, every year the highest paid bonuses for individual players in international free agency are well over the largest bonus pool totals for a team and the penalty for going over the bonus pool too small.

There is no way to explain in a few words what Badler did in a few hundred, so go to Baseball America and read the article. It makes much more sense than what MLB is proposing now. I hope they keep the QO system with the first round loss and compensation. At worst they should make it a second round loss. They should have a floor to benefit the players, this would make the games more interesting anyway. Please login to leave a reply. Username or Email Address.

Go To Pro Hockey Rumors. Go To Hoops Rumors. Comments Makes all the sense in the world. I second that… 0. I third that 0. Compensation was all they could hope for when their players got too expensive… 0. This forces them to actually spend those tv contract dollars 0. Yeah but if you offer them 17 maybe 18 mil next year some may actually accept it you run that risk as well 0.

So why would a team not give the QO then. That makes no sense 0. So…Go back to the old system that everyone was complaining about? Spend your revenue-sharing hand out on players instead of the owners pocket 0.

I say the team who loses the FA gets a sandwich pick between the 1st and 2nd round. Class A FA resulted in the loss of a 1st round pick or 2nd rounder if it was a protected pick. How dare they express themselves 0. It just means that we will see more trades when players have years left until FA.