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 7-19-2014):
NONE 


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

A Rule 4 Draft compensation pick is available only if a club is unable to sign a player selected in one of the first three rounds (including supplemental compensation draft picks between rounds 1-2, 2-3, and 3-4).

A club must offer a drafted player at least 40% of the slot value in order to be eligible to receive a compensation draft pick if the player does not sign.

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 during the week 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 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.