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What is the MLB Rule 5 draft?

On Thursday, November 20, major league baseball clubs will be adding players to their 40 man roster to protect them from the Rule 5 draft. Here is how it works.

Duane Burleson

On the last day of Major League Baseball’s annual winter meetings, the Rule 5 draft is conducted amongst all 30 teams. The players eligible to be selected will be minor leaguers who have been with their organizations for four or five years, but are not on the team’s 40 man roster. The player’s former club will receive a $50,000 fee.

Those chosen will have an opportunity to stick with a major league club for the season. The players selected must be kept in on that team's 25 man roster for the entire season by the club that has selected them, or be offered back to their original teams. They cannot be sent to the minors. In selecting a player in the Rule 5 draft, a club is willing to give that player a chance that his former club would not give him. Not many clubs have a roster spot to spare for a player who isn't ready to play in the major leagues, so they are generally looking for immediate help.

In order to make a selection, a club has to have an open space on their 40 man roster as of the start of the draft. A player could be non-tendered or put on waivers to create the roster space so that the club can roll the dice in the Rule 5 draft.

Rule 4 of the major league rules provides for a draft of amateur players. It is more often referred to as "the amateur player draft" or, simply, "the draft."  Players chosen in the Rule 4 draft are coming out of high school or college without any professional experience. Those chosen in the early rounds often receive six or seven figure signing bonuses. Not so with the Rule 5 draft. These are players already within MLB organizations. There is a major league phase, a Triple-A phase, and a Double-A phase of the draft.

The Rule 5 draft will be held on December 11 this year. Most teams will not even make a selection, and their general managers could be on the first flight out in the morning. In 2013, nine players were chosen, seven of them pitchers. A team might make multiple acquisition, like the Tigers did in 2012 when they worked deals for Jeff Kobernus and Kyle Lobstein.

Players eligible for the Rule 5 draft this year will be those who signed their first pro contract in 2011, or those who first signed in 2010, but were under the age of 19 at the time. The organization has an extra year before they have to put these younger players on the 40 man roster.

There are often trades made in connection with the Rule 5 draft as teams try to move up the board to select a player that they feel may not be left when their selection comes up. In spring training, if a player selected doesn’t make the major league club but the team that selected him would like to keep the player in the minor leagues, they may work out a deal with the player’s former club to obtain his Rule 5 rights.

In 2012, Detroit had the Boston Red Sox select Kobernus from the Washington Nationals. The Tigers then sent minor leaguer Justin Henry to Boston in exchange for Kobernus after the selection was made. The Tigers still needed to make an exchange with the Nationals for Kobernus to obtain his rights, but the Nationals would not agree on a trade. Therefore, he was sent back to Washington the next spring before the season began.

The Tigers worked out another deal with the New York Mets to draft Lobstein, a former second round draft pick, from the Tampa Bay Rays. Detroit sent cash to the Mets for the rights to Lobstein. When he didn’t make the team, he cleared waivers and was sent outright to the minor leagues. He’ll be in Lakeland next spring, trying to grab the fifth spot in the Tigers starting rotation for the 2015 season.

If a trade can be worked out for a Rule 5 player, the player usually has his full set of three option years remaining, as most of them have never made it to the 40 man roster. However, this is not always the case. Dixon Machado was signed by the Tigers as a 16 year old shortstop from Venezuela. He was added to the roster in 2012, optioned in 2013, but had not developed quickly enough, so he was put through waivers and sent outright back to the minors after the 2013 season. The Tigers will probably add Machado back to the roster this season, as his defensive skill set in particular could be enough to earn him a major league job.

Some notable players who have been Rule 5 selections in the past include Roberto Clemente, Jose Bautista, Josh Hamilton, Darrell Evans, Jason Grilli, Joakim Soria, and Willie Hernandez.