Will Cubs Target Rule 4 Draft Lottery Slots?
Up until last year, MLB First-Year Player Draft (Rule 4 Draft) slots could not be traded.
A club could lose a draft slot for signing a Type "A" Article XX-B free-agent (and it still can, although now they are called "Qualified Players"), or could gain a pick or picks if the club offered salary arbitration to one of its own Type "A" or Type "B" Article XX-B MLB free-agents and then the player signed with another club (and it still can receive one "compensation pick" between the 1st and 2nd rounds for losing a player to free-agency, as long as the player spent the entire previous season with that club AND the club offers the Article XX-B free-agent a one-year contract with a salary at least as much as the average salary of the top 125 salaries in MLB the previous season AND then the player subsequently signs with another club prior to the Rule 4 Draft).
But Rule 4 Draft slots could not be traded under any circumstances.
However, the MLB Rule 4 Draft Competitive Balance Lottery (CBL) was established per the 2012-16 CBA, and these draft slots CAN BE TRADED.
The Rule 4 Draft Competitive Balance Lottery (CBL) is held on the Monday following the Rule 4 Draft signing deadline in July. Only MLB clubs that receive revenue sharing and clubs from the ten smallest markets are eligible to participate in the lottery for the CBL draft slots.
Six Competitive Balance Rule 4 Draft slots between the 1st and 2nd rounds and six more between the 2nd and 3rd rounds are awarded to eligible clubs by the lottery. An eligible club can receive no more than one CBL draft slot per draft. Once awarded, a CBL draft slot can be traded, but only during the MLB regular season. Also, the slot cannot be traded for cash unless it is a financial adjustment made to offset the salary of one or more of the players involved in the trade. And a CBL draft slot can be traded only once (only by the club that was awarded the pick). Once traded, the slot cannot be "flipped" to a third club.
If a player selected with a CBL draft pick does not sign, the club receives a compensation selection in the next Rule 4 Draft, one slot lower than where the club selected the previous season. (The Miami Marlins received a CBL compensation pick in this year's draft after failing to sign their CBL pick last year). There is no further compensation if a player selected with a Competitive Balance compensation draft pick does not sign.
So far, three of the twelve 2014 Rule 4 Draft CBL slots have been traded, and because they cannot be flipped to a third team, the three traded CBL slots cannot be traded again. But the other nine CBL slots are available and can be traded up until the start of the draft.
Cubs GM Jed Hoyer stated in an interview this past week that he believes MLB clubs should be allowed to trade draft slots (like in the NFL and NBA), so don't be surprised if the Cubs offer some of their players (both players on their MLB 25-man roster as well as minor leaguers) to the clubs holding the nine tradeable CBL draft slots, not just to try and get more 1st & 2nd round draft picks (which would be nice), but also to increase the Cubs 2014 Rule 4 Draft spending limit (which is based upon the aggregate assigned value of a club's draft slots in the first ten rounds of the draft).
To get an idea of how club's value the CBL slots, here are the three trades made so far involving 2014 CBL draft slots:
7-31-2013: BAL acquired RHP Bud Norris from HOU for OF L. J. Hoes, LHP Josh Hader, and CBL slot #37.
7-31-2013: SD acquired RHP Ian Kenndy from AZ for LHP Joe Thatcher, RHP Matt Stites, and CBL slot #70.
5-31-2014: MIA acquired RHP Bryan Morris from PIT for CBL slot #39.
The 2015 Rule 4 Draft Competitive Balance Lottery will be held on July 21st, and once those slots are awarded they can be traded, but again, CBL draft slots cannot be traded during the off-season and cannot be used to replace a PTBNL, so the July 31st non-waiver trade deadline, the August 31st post-season roster eligibility deadline, and the days leading up to the Rule 4 Draft (June Draft) are when the CBL slots are most-likely to be traded.
In addition, the Cubs will probably trade one or more of their four 2014-15 International Signing Bonus Pool (ISBP) Signing Bonus Values (SBV) in July. Such a move could be part of a larger trade (the Cubs SBV being a "sweetener"), or the SBV could be used just to acquire a player from another club (like when the Cubs traded 2B Ronald Torreyes to Houston last year for one of the Astros SBV).
Cubs 2014-15 ISBP SBV #1: $2,288,700
Cubs 2014-15 ISBP SBV #2: $458,000
Cubs 2014-15 ISBP SBV #3: $309,300
Cubs 2014-15 ISBP SBV #4: $206,700
NOTE: Cubs 2014-15 ISBP SBV #1 (the one worth $2,288,700) can ONLY be traded to HOU or MIA if the entire SBV is to be used, because for all other clubs a $2,288,700 SBV would exceed their pre-assigned 2014-15 ISBP by more than 50%, and a club cannot acquire an SBV that is more than 50% of the club's orginally-assigned ISBP for that International Signing Period. However, a club other than HOU or MIA could acquire Cubs SBV #1 and then subtract as much of it as is necessary so that the final total of Cubs SBV #1 is no more than 50% of the new club's originally-assigned 2014-15 ISBP (and then the balance of Cubs SBV #1 would just be forfeited).
All clubs receive an additional $700,000 in their ISBP that cannot be traded, so the Cubs 2014-15 ISBP is just under $4M.
Because they went WAY over their assigned International Signing Bonus Pool (ISBP) in 2013-14, the Cubs will not be able to sign any first-year international player for more than a $250,000 bonus during the 2014-15 International Signing Period (7-2-2014 through 6-15-2015), so having a $3.9M+ 2014-15 ISBP won't do them much good. They will almost certainly try and trade one or two of their higher SBV (probably as soon as they can, like on July 2nd) to one of the major players in signing international players (like maybe Toronto or Texas). So the Cubs would have to wait until at least July 2nd to make a deal where a Cub 2014-15 ISBP SBV is an integral part of the trade.
NOTE: A signing bonus paid to a first-year international player age 23 or older who has spent all or part of at least five seasons playing in an MLB-recognized foreign professional or "major" league does not count against the club’s ISBP. (A signing bonus paid to a first-year Cuban international player age 23 or older who has spent all or part of at least three seasons playing in Serie Nacional does not count against the club’s 2013-14 ISBP, then beginning with the 2014-15 ISP, a signing bonus paid to a first-year Cuban international player age 23 or older who has spent all or part of at least five seasons playing in Serie Nacional does not count against the club’s ISBP).
2014 MLB RULE 4 DRAFT (AKA "FIRST-YEAR PLAYER DRAFT")