Rule 5 Draft News & Rumors

The 2021 edition of the Rule 5 Draft has been officially canceled, according to The Athletic’s Zach Buchanan (via Twitter).  Originally set to take place in December at the end of the Winter Meetings, the R5 was one of the many staples of the baseball calendar postponed by the lockout, and reports surfaced last week that just about all front office personnel around baseball were in favor of simply canceling this year’s draft.

A rescheduled Rule 5 draft would’ve added yet another notable event to a four-week stretch that will be busier than any other in baseball history from a transactional standpoint.  Between free agents, trades, arbitration hearings, and the countless other pieces of business that front offices need to address by the new April 7 Opening Day (and likely beyond), the Rule 5 Draft was deemed expendable.

The MLB Players Association would’ve had to agree to the R5’s cancellation, and while the union surely wasn’t pleased about even a one-year break in a mechanism that provides more big league opportunity and big league paychecks to players, it could be that the Rule 5 was seen as a relatively minor point within the many larger items of debate between the union and the owners.  Also, since minor league players aren’t officially part of the MLBPA, it could be that the union was simply more focused on the priorities of its actual members.

As it stands, 2021 will mark the first season since 1891 that the Rule 5 Draft (in one form or another) didn’t take place, interrupting one of baseball’s more quietly longstanding traditions.  It will be good news for teams like the Guardians, Pirates, Rays, and other clubs who had a surplus of eligible minor league talent that couldn’t all be fit onto the 40-man roster, since now those prospect-heavy teams will get to keep those players rather than risk losing any in a Rule 5 Draft.

However, it could lead to a loaded field of eligible prospects for the 2022 R5, which is presumably still set to take place in December on the last day of the Winter Meetings.  A new group of minor leaguers will gain eligibility and join any leftover prospects from this year’s class that still might be left off a 40-man roster, giving teams with more options than usual to choose from come December.

As a refresher, a player selected in a Rule 5 Draft must remain on his new team’s 26-man active roster for an entire season in order for the new team to gain full rights to the player’s services.  If the player doesn’t spend the entire season on the active roster or the new team simply decides to part ways with the player, he must be first offered back to his original team for a $50K price.  (A team selecting a R5 player must pay a $100K fee.)

Front office executives with multiple teams have asked Major League Baseball to explore the possibility of canceling the major league phase of the Rule 5 draft this year, report Kiley McDaniel and Jeff Passan of ESPN. Because the Rule 5 is part of the collective bargaining agreement, MLB would need approval from the Players Association to do so.

Ken Rosenthal and Jayson Stark of the Athletic wrote this afternoon that front office personnel “almost (unanimously)” support the Rule 5’s cancelation as the lockout continues. Both The Athletic and ESPN explore various reasons behind the thinking, but they all revolve around the discrepancy between major league and minor league play. MLB Spring Training games won’t begin until March 18 at the absolute earliest; minor league Spring Training is already underway, as players not on clubs’ 40-man rosters are unaffected by the lockout.

The major league phase of the Rule 5 draft — which typically takes place at the December Winter Meetings — provides an odd middle-ground regarding the 40-man roster. Only players not currently on a team’s 40-man are eligible for selection (assuming they’ve spent enough time in the minor leagues). If selected, however, they immediately jump onto their new club’s roster. With all 40-man transactions frozen by the lockout, the Rule 5 was suspended indefinitely on December 2. However, the players who would be eligible for selection are all able to participate in minor league camp, since they’re not on their current club’s 40-man.

That culmination of factors has led to most teams closing their minor league camp to scouts from rival teams. The fear is that they’d identify Rule 5 eligible prospects who have taken steps forward in their development over the offseason. Rather than allow clubs to spot and potentially poach improving young players for essentially nothing — selecting a player in the Rule 5 costs only $100K — many teams have shut scouts out entirely. McDaniel and Passan report that the Reds, Brewers, A’s, Mariners and Rays are the only teams still allowing other teams’ evaluators into their minor league camps — and those clubs have just formed a reciprocal agreement with one another.

ESPN writes that some evaluators have expressed concerns that teams shutting out scouts to keep their Rule 5 eligible players could have an unintended deleterious effect on the post-lockout trade market. Teams are shutting the doors to minor league camp entirely, as it’s not feasible to prevent opposing scouts from seeing only Rule 5 eligible players. Therefore, pro scouts are mostly prohibited from getting a look at prospects of all ages and levels. Some of those players could be trade targets — the Reds and A’s, in particular, are expected to move multiple established big leaguers for controllable young talent — but scouts are generally unable to get eyes on them right now.

Pulling off the Rule 5 draft would only become more challenging if the lockout lingers into April. The Triple-A regular season is scheduled to open on April 5. (Minor league schedules are unaffected by the lockout). Clubs presumably couldn’t keep scouts from attending those games; they’ll be open to the general public, after all. Selecting players out of regular season minor league play to report to big league Spring Training could prove difficult. If the MLB lockout remains in place when MiLB games start, the Rule 5 would figure to be in particular jeopardy.

That said, MLB’s inability to cancel the draft unilaterally may prove its best hope of happening this year. At its core, the Rule 5 is a player-friendly provision. It’s designed both to incentivize teams to add prospects to their 40-man roster within a few years — which teams still had to do last November — and to give players who aren’t getting an MLB opportunity in their current organizations broad exposure around the league.

Rule 5 draftees have to stick on their new team’s active roster or be waived and offered back to their original franchise if they clear. Those who break camp with their new team receive major league pay and service time, in addition to the opportunity to prove themselves against big league competition. Red Sox reliever Garrett Whitlock and Tigers outfielder Akil Baddoo, for example, both look to have broken through as long-term big leaguers after impressing as Rule 5 draftees last year. As JJ Cooper of Baseball America points out (on Twitter), even those who don’t stick with their new team receive higher minor league salaries upon being returned to their original organization because they’d previously been on a 40-man roster.

Because of those benefits, it stands to reason the MLBPA won’t be enamored with the idea of approving the Rule 5’s cancelation. Minor leaguers aren’t members of the MLBPA, but the union does have some amount of influence on provisions that would affect non-union players (i.e. its opposition to the league’s efforts to implement a draft for international amateurs). McDaniel and Passan report that the league and union haven’t discussed the Rule 5 draft’s fate to this point in CBA negotiations. At some point, there figures to be more clarity on the draft’s future, but its delay is yet another of the ways in which typical offseason business has been thrown off-track by the lockout. The Rule 5 draft, rather remarkably, has been conducted in some form every offseason since 1920.