Basic 2012 MLB Draft Mechanics
Published: Monday, April 16, 2012
New CBA Leads to Shakeup in 2012 Draft Rules
With the first-year player draft a rare front-burner issue in the recent renewal of the Collective Bargaining Agreement between Major League Baseball and the Players Association, there are several significant changes to the draft that go into effect this year.
The most prominent is a quasi cap on signing bonuses, which punishes a big-league club through the form of a tax, and potentially the loss of premium draft picks, if it exceeds a specified bonus threshold.
Every slot through the first 10 rounds has now been assigned a specific and mandated bonus amount, in descending order from $7.2 million for the first overall pick to $125,000 for the last selection, and teams are penalized if they spend more than the allowable amount in their so-called Signing Bonus Pool—effectively, the cumulative total available to a club to sign all its drafts picks in the top 10 rounds.
Depending on various forms of compensation that are awarded by way of draft picks—mainly compensation for clubs losing Type A and B major-league free agents last off-season, but also for failure to sign premium draft picks in 2011—several teams will have additional selections in the early rounds, and proportionately more money to spend.
In all, there will be 35 such extra selections, including 29 between the end of the first round and start of the second. Effectively, 60 picks will be made this year by the time the second round begins as there will be 31 first-round selections. The Toronto Blue Jays gain an extra first-round pick, the 22nd pick overall, for their failure to sign righthander Tyler Beede (now at Vanderbilt), their first-round pick in 2011.
The Jays, St. Louis Cardinals and San Diego Padres will each make 14 selections through 10 rounds, and the Signing Bonus Pools for those clubs have been revised upwards accordingly.
The Minnesota Twins, though, will have the most bonus money to sign their picks in the first 10 rounds this year, a total of $12,368,200 for 13 selections. That includes $6.2 million for the No. 2 pick overall--$1 million less than has been earmarked for the Houston Astros for the top pick.
By contrast, the Los Angeles Angels will make only eight selections in the first 10 rounds, the price for signing two premium free agents. The Angels forfeit their pick in the first round for inking first baseman Albert Pujols and in the second round for lefthander C.J. Wilson, and their Signing Bonus Pool has been reduced to a mere $1,645,700 as a result. They won’t make their initial selection until pick No. 114, deep in the third round, and have been allocated a bonus of just $416,300 to sign that pick.
Numerous other changes to the draft have been implemented, as they apply to capping bonuses, and some of the highlights include:
• If a team pays out a bonus in the first 10 rounds that is less than the designated slot amount (most likely to a college senior, who typically has less bargaining leverage), it can apply the differential to another pick in the first 10 rounds. For instance, if the Astros elect to spend only $6 million on the No. 1 overall pick, it can then apply the $1.2 million shortfall to the bonuses of other picks in the first 10 rounds. However, the new CBA specifies that if a team does not sign one of its picks in the first 10 rounds, that money vanishes from its Signing Bonus Pool and the club is prohibited from applying it to other draft selections.
• A Signing Bonus Value of $100,000 has been attributed to any draft pick after the 10th round and any non-drafted free agent signed. The SBV, however, will not be included in a club’s Signing Bonus Pool and clubs may exceed the value for any selections after the 10th round if they have money left over in their Signing Bonus Pool. They can apply any difference without being subject to penalty.
As for the penalties for exceeding the Signing Bonus Pool, teams that overspend:
• by up to five percent, will be subject to a tax of 75 percent of the pool overage;
• by 5 to 10 percent, will be subject to a tax of 75 percent of the pool overage and the loss of a first-round pick in the next succeeding draft;
• by 10 to 15 percent, will be subject to a tax of 100 percent of the pool overage and the loss of first-round and second-round picks in the next succeeding draft;
• by 15 percent or more, will be subject to a tax of 100 percent of the pool overage and the loss of first-round picks in the next two succeeding drafts.
The new, more-restrictive bonus measures were enacted ostensibly to curb continuing runaway inflation on signing bonuses in recent years, and better assure that the best prospects end up with the weakest teams, restoring the original premise of the draft.
Numerous other changes to the draft will go into effect this year, as well, including a reduction in the number of rounds from 50 to 40, and a new, mid-July signing deadline. For this year, that deadline will be 5 p.m. ET on July 13. In the past, the deadline was 12 midnight on Aug. 15.
With those changes in effect, here are some of the basic tenets of the draft that are still applicable:
This year’s draft is set for June 4-5-6. Round One (31 picks) and the supplemental first-round (29 picks) are scheduled for June 4, beginning at 7 p.m. ET. Rounds 2-15 will be conducted on June 5, Rounds 16-40 on June 6.
Major League Baseball adopted the Rule IV draft in 1965, effectively making baseball the last of the four major professional team sports in North America to adopt a draft as the primary means of equitably distributing the bulk of amateur talent entering the game.
The draft has always been held in June—the same month as the NHL and NBA drafts. Historically, it was conducted on the first Tuesday of the month, but it has been held on a more-random basis in recent years. Like the last two years, it begins on a Monday.
It will be conducted by conference call among the 30 major-league clubs. The clubs take turns selecting players in reverse order of their 2011 won-loss records, regardless of league, with adjustments in the first three rounds stemming from various forms of compensation. The Houston Astros own the No. 1 selection this year.
The draft consists of 40 rounds—as opposed to 50 rounds from 1998-2011, two rounds in the NBA draft, and seven in both the NFL and NHL drafts. Each club is entitled to select for 40 rounds, but is not required to do so.
For years, the draft originated from the commissioner’s office in New York, but for the sixth year in a row the early portion of the draft will be held at a remote location.
In 2007 and 2008, the first five rounds originated from Disney’s Wide World of Sports complex in Orlando, Fla., with the first round televised by ESPN and its family of networks. Since then, the draft has originated from MLB’s in-house network studios in Secaucus, N.J.
The first round and supplemental first round (60 picks in all, same as last year) are scheduled for June 4 in prime time, and will be televised by the MLB Network. Though clubs will coordinate the draft process from their home offices, numerous team representatives and projected first-round picks are scheduled to be in attendance in Secaucus.
Day Two and Three of the proceedings will be conducted in traditional fashion, originating from the commissioner’s office. The draft will resume with Round 2 on June 5 and Round 16 on June 6.
Each team will be allowed up to five minutes to select a player in Round 1, with one minute permitted in the compensation round and through Round 10. Teams will continue to draft players until they pass or reach the 40th round, whichever comes first.
No team may draft a player unless it has registered the player’s name with the commissioner’s office, or his name has been submitted by the Major League Scouting Bureau.
The club that drafted a player in the past was required to physically tender him a contract within 15 days of his selection, but that provision has been eliminated with the new Collective Bargaining Agreement.
All selections will now be deemed to have been tendered a uniform minor-league player contract with no signing bonus. By defaulting to a standard minor-league contract, that now eliminates the provision that a draft pick could be signed to a major-league contract (with the resulting ability for a club to spread the player’s bonus over several years), such as occurred on occasion with exceptional talents through the years. A minor-league UPC generally requires a team to pay a player half his signing bonus upon approval of his contract, and the other half early in the next calendar year.
A player who is drafted and does not sign with the club that selects him may be drafted again in a future draft—as soon as he meets the eligibility requirements.
Correspondingly, any player who is eligible to be selected but is passed over altogether automatically becomes a free agent, free to sign with any club. Under terms of the new CBA, however, he may not receive a bonus in excess of $100,000 without being subject to penalties that apply to drafted players selected after the 10th round.
Major league Rule IV rules govern which players are eligible for selection in the draft. The basic eligibility criteria can be described as follows:
Generally, a player is eligible for selection if he is a resident of the United States or Canada, and the player has never before signed a major-league or minor-league contract. Players who have played professionally in an independent league are subject to selection. Residents of Puerto Rico and other territories of the United States are also eligible for the draft, as are players who enroll in a high school or college in the United States, regardless of where they are from originally.
Certain groups of players are ineligible for selection, generally because they are still in school. The basic categories of players eligible to be drafted are:
• High School players, if they have graduated from high school and have not yet attended college or junior college;
• College players, from four-year colleges who have either completed their junior or senior years, or are at least 21 years old. A player must have attained his 21st birthday within 45 days of the draft, and this year the qualifying date for a college sophomore is July 21. Players who have dropped out of college also may be eligible, providing they petitioned in writing to the commissioner’s office no later than March 22—75 days before the draft;
• Junior College players, regardless of how many years of school they have completed.
A player who is drafted and does not sign with the club that selected him may be drafted again in a future 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.
Specific provisions are in the works, stemming from the revamped CBA, for Major League Baseball to adopt a fully-integrated world-wide draft in the future, possibly by 2013 or 2014.
How to Follow the Draft
a. MLB Network
b. Major League Baseball
c. Perfect Game