Amateur & International Talent Acquisition

The variety of ways that organizations can bring in talent domestically or internationally.

First-Year Player Draft (MLB Rule 4 Draft)

The First-Year Player Draft (or "MLB Rule 4 Draft") is held annually over a three-day period in June.

There are 40 rounds (there were 50 rounds prior to 2012), and draft order is based upon the inverse order of winning percentages from the previous season. If the winning percentages of two or more clubs are the same, the club with the lowest winning percentage from the previous season picks first. If two or more clubs are still tied, league standings from two years back (or three years back, four years back, etc) are used to break the tie.

Article XX-B Free-Agent Compensation draft picks are slotted in the Supplemental 1st Round of the MLB Rule 4 Draft pick (between the 1st and 2nd rounds), and the 12 Competitive Balance Rule 4 Draft picks that are awarded annually are slotted in two groups (six of the Competitive Balance picks are slotted immediately after the Article XX-B Free-Agent Compensation draft picks in the Supplemental 1st Round, and the other six Competitive Balance picks are slotted in the Supplemental 2nd Round between the 2nd and 3rd rounds).  

 

 

First-Year Player Draft (MLB Rule 4 Draft) Eligibility

An individual is eligible for selection in the First-Year Player Draft (Rule 4 Draft) if the person has not previously signed an MLB or minor league contract, and is either a resident of a U. S. state or territory or Canada, or is not a resident but was enrolled in a high school or college in a U. S. state or territory or Canada within the previous year, and...  

1. Has graduated from high school; or

2. High school athletic eligibility has expired; or

3. Dropped out of high school at least 365 days prior to the draft; or

4. Attended a junior college the previous school year; or

5. Is attending a four-year college and has completed at least junior year of athletic eligibility, or

6. Is attending a four-year college and is age 21 or older (or will turn 21 within 45 days of the draft); or

7. Is attending a four-year college and the school has no baseball program, or 

8. Was dismissed from a four-year college for academic reasons; or

9. Withdrew from a four-year college at least 120 days prior to the draft,

 

  

 

First-Year Player Draft (MLB Rule 4 Draft) Negotiation List

Players selected in the MLB First-Year Player Draft (MLB Rule 4 Draft) are placed on a club's Negotiation List.

In most cases, a player selected by a club in the Rule 4 Draft will remain on the club's Negotiation List until either the player signs, or until 5:00 PM (EDT) on the Friday that falls during the week July 12-18 (whichever comes first), and if a club does not sign a Rule 4 Draft pick by the deadline, the player is removed from the club's Negotiation List and becomes eligible for selection again in the next Rule 4 Draft in which the player would be eligible for selection. The exception to this rule is any college senior with no baseball eligibility left. This class of player remains on the club's Negotiation List until the player signs or until one week prior to the next Rule 4 Draft (whichever comes first).

Also, any player eligible for selection in the Rule 4 Draft who is not drafted ("Non-Drafted Free-Agent" or "NDFA") can sign with any club after the conclusion of the draft any time up until one week prior to the next Rule 4 Draft, unless and until the NDFA enrolls in a junior college or four-year college, in which case MLB Rule 4 Draft eligibility rules apply.

A player selected in the MLB Rule 4 Draft or a Rule 4 eligible NDFA cannot be signed to a Major League contract.

A player selected in the MLB Rule 4 Draft or a Rule 4 eligible NDFA can be "Signed for Future Service" (contract is for the following season) if the player signs a contract after July 1st.

A club is not permitted to select a player in the Rule 4 Draft two years in a row, unless the player gives his approval in advance.

CUBS 2014 RULE 4 DRAFT NEGOTIATION LIST (updated 6-29-2014):
6. Dylan Cease, RHP (Milton HS - Milton, GA) - HS (NOTE: Vanderbilt recruit) 
23. Isiah Gilliam, 1B-OF (Parkview HS - Lilburn, GA) - HS (NOTE: DRAFT-ELIGIBLE HS JR)  
24. Daniel Spingola, OF (Georgia Tech) - JR
28. Jacob Niggemeyer, RHP (Olentangy Liberty HS - Powell, OH) - HS (NOTE: Ohio State recruit)
29. Gianni Zayas, RHP (Seminole State College) - JC2 (NOTE: Transferred to Seminole State from NC State)
30. Michael Cantu, C (Foy H. Moody HS - Corpus Christi, TX) - HS (NOTE: U. of Texas recruit) 
31. Brad Deppermann, RHP (East Lake HS - Tarpon Springs, FL) - HS (U. of North Florida recruit) 
33. Brad Bass, RHP (Lincoln-Way Central HS - New Lenox, IL) - HS (NOTE: Notre Dame recruit)
34. Steven Kane, RHP (Cypress CC) - JC3 (NOTE: Will transfer to U. of Tennessee if he does not sign)
35. Jordan Minch, LHP (Purdue)  - SOPH (DRAFT ELIGIBLE)
36. D. J. Peters, OF (Glendora HS - Glendora, CA) - HS (NOTE: Cal State - Fullerton recruit)
37. Riley Adams, C (Canyon Crest Academy - San Diego, CA) - HS (NOTE: U. of San Diego recruit)  
38. Daniel Wasinger, C (Eastlake HS - El Paso, TX) - HS
39. David Petrino, C (Central Arizona JC) - JC2 (NOTE: Will transfer to Oklahoma State if he does not sign)  
40. Diamond Johnson, OF (Hillsborough HS - Tampa, FL) - HS (NOTE: St. Petersburg College recruit)  



 

 

 

First-Year Player Draft (MLB Rule 4 Draft) Signing Bonus Pool

There is a maximum limit on the aggregate amount of money that each club can pay as signing bonuses to players selected in a First-Year Player Draft (MLB Rule 4 Draft) before penalties begin to accrue.

Prior to the Rule 4 Draft, each MLB club is assigned a “Signing Bonus Pool” (SBP) equal to the aggregate pre-assigned bonus value of all of the club’s draft slots in the first ten rounds (including supplemental draft picks); the higher the slot, the higher the bonus value. (The collective MLB SBP is determined in advance by calculating industry revenues). If a club fails to sign a player selected in the first ten rounds (including supplemental draft picks), the value of that slot is deducted from the club’s SBP. There is no bonus value assigned to draft slots after the 10th round, but if a club pays a signing bonus in excess of $100,000 to a player selected in the 11th round or later or to a player eligible for selection who was not drafted, the amount of that bonus in excess of $100,000 is deducted from the club’s SBP.

If a club exceeds its SBP in a given Rule 4 Draft, a tax will be assessed and future Rule 4 Draft picks could be forfeited, depending on how much the club exceeded its SBP. (The club’s 1st Round draft pick in the next Rule 4 Draft is forfeited if the club exceeds its SBP by 5-10%, its 1st & 2nd round draft picks in the next Rule 4 Draft are forfeited if the club exceeds its SBP by 10-15%, and the club’s 1st Round picks in the next two Rule 4 Drafts are forfeited if the club exceeds its SBP by more than 15%).

Money collected from the tax on clubs that exceed their SBP will be distributed to qualifying clubs as Revenue Sharing funds, and forfeited draft picks will be reassigned by lottery. (Any club that exceeds its SBP is excluded from the lottery).

Rule 4 Compensation Draft Picks

If a player selected in the 1st or 2nd round of the Rule 4 Draft does not sign, the club receives an extra compensation selection in the next Rule 4 Draft, one slot lower in the 1st or 2nd round than where the club selected the previous season.

If a player selected in the 3rd round of the draft does not sign, the club receives an extra compensation selection between the 3rd & 4th rounds in the next Rule 4 Draft, with clubs selecting in inverse order of league standings from the previous season. (In the case of two clubs finishing with the same winning percentage the previous season, league standings from two seasons back will be used to break the tie. If the clubs are still tied, league standings from three seasons back, four seasons back, etc, will be used to break the tie).

A club would receive another compensation pick in the next Rule 4 Draft after that (one slot lower than the slot where the unsigned player was selected in the previous draft) if a player selected with an extra compensation pick does not sign, but there is no additional compensation pick awarded the following season (three years removed from the original draft pick) if a club is unable to sign that player.

Compensation draft picks awarded to clubs for losing an Article XX-B MLB Free-Agent (Qualified Player) will be slotted between the 1st and 2nd rounds of the next MLB Rule 4 Draft, with clubs selecting in inverse order of league standings from the previous season. (In the case of two clubs finishing with the same winning percentage the previous season, league standings from two seasons back will be used to break the tie. If the clubs are still tied, league standings from three seasons back, four seasons back, etc, will be used to break the tie).

If a player selected with a draft pick awarded as the result of a club losing a Qualified Player does not sign, the club receives a compensation selection between the 1st & 2nd rounds in the next Rule 4 Draft, one slot lower than where the club selected the previous season. There is no further compensation if a player selected with that compensation draft pick does not sign. 

 

 

Rule 4 Competitive Balance Draft Picks

Six "Competitive Balance" Rule 4 Draft slots between the 1st and 2nd rounds and six more between the 2nd and 3rd rounds are awarded each year by lottery. 

The 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.

Once awarded, a CBL draft slot can be traded, but only during the MLB regular season. 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. Also, 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. There is no further compensation if a player selected with a Competitive Balance compensation draft pick does not sign.

 

 

Rule 4 SBP Forfeited Draft Picks

A club could forfeit its 1st round draft pick or its 1st and 2nd rounds draft picks if the club exceeds its pre-assigned Rule 4 Draft SBP limit in a given year or over multiple years. A Rule 4 Draft pick forfeited because a club exceeded its Rule 4 Draft bonus limit will be reassigned to another club by lottery held on the same day as the Competitive Balance draft pick lottery. All MLB clubs that did not exceed its SBP limit are eligible to participate in this lottery.

As with the Competitive Balance draft pick lottery, Rule 4 forfeited draft picks can be traded, but only during the MLB regular season, and the pick 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. Also, a Rule 4 forfeited draft pick can be traded only once (only by the club that was awarded the pick). Once traded, the pick cannot be "flipped" to a third club.

If a player selected with a Rule 4 forfeited draft pick does not sign, the club receives a compensation selection in the next Rule 4 Draft, one slot lower than the forfeited draft pick slot from the previous season. There is no further compensation if a player selected with a compensation Rule 4 forfeited draft pick does not sign.

 

International First-Year Players - Eligibility & Restrictions

The "International Signing Period" extends from July 2nd through June 15th of the following year.

Any individual who is age 17 or older, has not previously signed an MLB or minor league contract, resides outside the U. S., Canada, and Puerto Rico, and has not been enrolled in a high school or college in the U. S., Canada, or Puerto Rico within the previous year, can be signed during the ""International Signing Period." Also, a 16-year old international player can be signed if the individual will turn 17 prior to September 1st or prior to the conclusion of the minor league season (whichever comes first).

An international player can be "Signed for Future Service" (contract is for the following season) if the player signs a contract July 2nd up through the conclusion of the MLB regular season.  

In addition, a 16-year old international player who otherwise would not be eligible to sign can be "Signed for Future Service" (that is, signed for the next season) if the player signs a contract July 2nd through August 31st.

No international player can be signed during the period of time extending from June 16th through July 1st.

International Signing Bonus Pool

There is a maximum limit on the aggregate amount of money each MLB club can pay as signing bonuses to international first-year players before penalties begin to accrue.

Each MLB club is assigned an International Signing Bonus Pool (ISBP) for each International Signing Period (ISP). A club’s ISBP is based upon the club’s winning percentage from the previous season. (Clubs that finish with lower winning percentages will receive a larger ISBP than clubs with higher winning percentages, with the ISBP increasing inverse to the previous season’s standings). In the case of two clubs finishing with the same winning percentage the previous season, league standings from two seasons back will be used to break the tie. If the clubs are still tied, league standings from three seasons back, four seasons back, etc, will be used to break the tie.

A club's ISBP consists of four separate "Signing Bonus Values" (SBV) plus an additional $700,000. Each SBV corresponds to a particular "slot," and each slot is assigned a specific cash value (TBA prior to the start of the ISP).  

A Signing Bonus Value (SBV) can be traded, but with some restrictions:

1. An SBV can only be traded during the International Signing Period (ISP) to which the SBV was assigned (July 2nd through June 15th of the following year);

2. An SBV cannot be sold for cash. However, cash can be exchanged if it is used to offset the salary or salaries of a player or players acquired in return for the SBV;

3. An SBV cannot be substituted for a "Player to Be Named Later" (PTBNL);

4. The entire SBV must be assigned to the other club when it is traded;

5. A club may not acquire an SBV in a trade if the club has already paid signing bonuses equal to or in excess of its ISBP;

6. Once acquired, an SBV can be traded ("flipped") to a third club, as long as the third club has not already paid signing bonuses equal to or in excess of its ISBP;

7. A club's originally assigned ISBP can be increased by a maximum of 50%. If a club acquires an SBV in a trade that causes the club's ISBP to increase to an amount that is more than 50% above the club's originally-assigned ISBP, the portion of the SBV that caused the club's ISBP to increase to an amount that is more than 50% above the club's originally-assigned ISBP is subtracted from the SBV. 

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).

Also, a club’s six highest signing bonuses of $50,000 or less and ALL signing bonuses of $7,500 or less that are paid to first-year international players do not count against the club’s ISBP. (Beginning in July 2014, only signing bonuses of $10,000 or less that are paid to first-year international players will not count against a club’s ISBP).

The penalty for a club paying signing bonuses in excess of its ISBP is a tax (no draft picks are forfeited) and a restriction on bonuses that can be paid to international players during the next ISP:

1. A club that pays signing bonuses that exceed its 2013-14 ISBP by 5% or less must pay a 75% tax on the ISBP overage, but there are no restrictions on bonuses in the 2014-15 ISP; a club that pays signing bonuses that exceed its 2014-15 ISBP by 5% or less must pay a 100% tax on the ISBP overage, but there are no restrictions on bonuses in the 2015-16 ISP.

2. A club that pays signing bonuses that exceed its 2013-14 ISBP by 5-10% must pay a 75% tax on the ISBP overage, and is permitted to sign only one international first-year player to a bonus of $500K or more in the 2014-15 ISP; a club that pays signing bonuses that exceed its 2014-15 ISBP by 5-10% must pay a 100% tax on the ISBP overage, and no player may be signed to a bonus of $500K or more in the 2015-16 ISP.

3. A club that pays signing bonuses that exceed its 2013-14 ISBP by 10-15% must pay a 100% tax on the overage, and is prohibited from paying a bonus in excess of $500K to any international first-year player in the 2014-15 ISP; a club that pays signing bonuses that exceed its 2014-15 ISBP by 10-15% must pay a 100% tax on the ISBP overage, and no player may be signed to a bonus of $300K or more in the 2015-16 ISP. 

4. A club that pays signing bonuses that exceed its 2013-14 ISBP by 15%+ must pay a 100% tax on the overage, and is prohibited from paying a bonus in excess of $250K to any international first-year player in the next ISP; a club that pays signing bonuses that exceed its 2014-15 ISBP by 10-15% must pay a 100% tax on the ISBP overage, and no player may be signed to a bonus of $300K or more in both the 2015-16 and 2016-17 ISPs. 

Money collected from the tax on clubs that exceed their ISBP will be used to further the development of international baseball.  

A player subject to ISBP restrictions cannot be signed to a Major League contract. 

 

Nippon Professional Baseball (NPB) Posting System

There are two Japanese major leagues, the Pacific League and the Central League. Together they are known as "Nippon Professional Baseball" (or "NPB").

Unless the player is released or signed by an MLB club after being posted, all NPB players remain under club control (the player is "reserved") for nine seasons. After the 9th season, the player becomes an unrestricted free-gent.

1. An NPB player who is not under the control of an NPB club can sign with any MLB club.

2. With the consent of the NPB club, an NPB player who is under club control can be "posted" (made available to be signed by an MLB club) anytime during a three-month period extending from November 1st to February 1st.

3. The NPB club decides in advance on the amount of the release fee it will be paid if the player signs with an MLB club (it can be any amount up to $20M), and all MLB clubs are notified of the posting by the MLB Commissioner.

4. Any MLB club willing to pay the release fee can negotiate with the NPB player during a 30-day period starting on the day after the player is posted.

5. If an MLB club signs a posted NPB player, the NPB club receives the designated release fee from that MLB club. The release fee can be paid in installments over an 18-month period, with the MLB club required to pay 50% of the release fee within 14 days of the submission of the posted player's contract, 17% of the release fee within six months of the submission of the posted player's contract, 17% of the release fee within 12 months of the submission of the posted player's contract, and 16% of the release fee within 18 months of the submission of the posted player's contract. (The release fee is not considered when calculating the MLB club's payroll).

6. If a posted NPB player does not sign with an MLB club within 30 days after being posted, the NPB club does not receive the release fee, and the player cannot be posted again until the next November 1st (unless he becomes an unrestricted free-agent in the meantime).