My Attempt at a Guide to the Rule 5 Draft

The Rule 5 draft is complicated and confusing. Last year, I looked up a bunch of articles about it, spent a lot of time trying to learn about it, and eventually felt pretty good about what I knew and understood about it. Then another baseball season came and passed…and as conversation about this year’s Rule 5 draft came up, I found myself lost again. So, I went back to Google and searched for those articles again. The problem is, this time I already had the basic idea of how it works, and I was just looking for specifics. Well, most of the articles I found only gave a basic overview of the Rule 5 draft that I didn’t need. And the slightly more specific articles (listed below) still didn’t combine all the info that I wanted. So, I decided to compile my own guide to the Rule 5 draft that has the info laid out just the way I like it so that I can reference it in years to come instead of wasting my time looking for and reading a bunch of different articles. And then I figured, if I’m going to spend all this time and energy on it for myself, I might as well share it with everyone. So here you go!
PLEASE, PLEASE, PLEASE let me know if you find any errors.

Compiled from:
http://www.milb.com/milb/events/rule5draft.jsp
http://bizofbaseball.com/index.php?option=com_content&view=article&id=661
http://assets.espn.go.com/mlb/s/transanctionsprimer.html
http://www.baseballamerica.com/today/columnists/askbarule5.html

MAJOR LEAGUE PHASE

Any player meeting the following criteria may be drafted:

  • He is not on a 40-man Major League roster

AND

    • this is the fourth (or later) Rule 5 draft since he has signed[1]

OR

    • if he was 19 or older on June 5 preceding the signing of his first contract, this is the fifth (or later) Rule 5 draft since he has signed[1]

What happens during the draft:

  • Clubs draft in reverse order of their won-loss records in the regular standings of the previous season
  • Clubs may choose one player each round as long as they have vacancies on their 40-man Major League roster
  • The Major League phase ends when all clubs:
    • have passed

OR

    • have no vacancies on their 40-man Major League roster

When a player gets selected:

  • He is automatically assigned to his new organization’s 40-man Major League roster
  • His new organization pays his old organization $50,000
  • His new organization must keep him on their 25-man Major League roster for the entirety of the next season[4]
    • If the new organization no longer wants to keep the player on the 25-man Major League roster, he must be placed on waivers.[2]
      • If a third organization claims the player, this organization now must keep him on their 25-man Major League roster for the rest of the season

OR

      • If he clears waivers:
        • The player must be offered back to his old organization for $25,000

OR

        • The two organizations may work out a trade so that the new organization may keep the player and send him to the minor leagues.
  • He must remain active (not on the DL) for a minimum of 90 days
    • If, because of injury, he spends less than 90 days on the active Major League roster:
      • He must continue to remain on the new organization’s 25-man Major League roster for the next season until he earns 90 days of (active) service.

OR

      • He must be placed on waivers.
        • If a third organization claims the player, this organization now must keep him on their 25-man Major League roster for the rest of the season

OR

        • If he clears waivers:
          • The player must be offered back to his old organization for $25,000

OR

          • The two organizations may work out a trade so that the new organization may keep the player and send him to the minor leagues.

MINOR LEAGUE PHASE 1: TRIPLE-A PHASE
Any player meeting the following criteria may be drafted:

  • He is eligible for the Major League phase of the Rule 5 draft[3]

AND

  • He is not on a 38-man Triple-A reserve list

What happens during the draft:

  • Clubs draft in reverse order of their won-loss records in the regular standings of the previous season
  • Clubs may choose one player each round as long as they have vacancies on their:
    • 38-man Triple-A reserve list

OR

    • 40-man Major League roster
  • The Triple-A phase ends when all clubs have:
    • passed

OR

      • have no vacancies on their 38-man Triple-A reserve list

AND

      • have no vacancies on their 40-man Major League roster

When a player gets selected:

  • He is automatically assigned to his new organization’s 38-man Triple-A reserve list
  • His new organization pays his old organization $12,000

MINOR LEAGUE PHASE 2: DOUBLE-A PHASE
Any player meeting the following criteria may be drafted:

  • He is eligible for the Triple-A phase of the Rule 5 draft[3]

What happens during the draft:

  • Clubs draft in reverse order of their won-loss records in the regular standings of the previous season
  • Clubs may choose one player each round as long as they have vacancies on their:
    • 37-man Double-A reserve list

OR

    • 38-man Triple-A reserve list

OR

    • 40-man Major League roster
  • The Double-A phase ends when all clubs have:
    • passed

OR

      • have no vacancies on their 37-man Double-A reserve list

AND

      • have no vacancies on their 38-man Triple-A reserve list

AND

      • have no vacancies on their 40-man Major League roster

When a player gets selected:

  • He is automatically assigned to his new organization’s 37-man Double-A reserve list
  • His new organization pays his old organization $4,000

Notes:
40-man rosters and minor league reserve lists may not be changed after November 20 (with the exception of free agent additions to the 40-man roster)
[1]I combined info I found from Alan Schwartz of Baseball America and Rob Neyer of ESPN, but there was a little inconsistency – Schwartz says the age is counted from June 5th preceding the signing of the contract, whereas Neyer says the age is counted from the day he signs his contract. I just put what I think makes sense.
[2]MiLB.com says that the player must be offered back to his old team before being waived, and bizofbaseball.com says that the player clear waivers before being offered back to his old team. I am not sure which one is correct, but being waived first seems to make more sense to me.
[3]I couldn’t find this explicitly stated, but I can’t figure out how it makes sense if this is not the case.
[4] Teams may trade a player selected in the Rule 5 draft, but the same rules regarding roster placement apply to the player’s new team.

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