2015 MLB Draft Preview: Rule 4 amateur draft primer

Today is baseball’s Rule 4 draft, and although the Mets don’t have a first-round draft pick, they still do have a chance to augment their farm system, which will need some help after its recent graduations. It’s unlikely that the team will find a star—future stars are not commonly found in the second round of the draft. However, truth be told, there isn’t a whole lot of star power at the top of this draft, so you might be as likely to find a star in the second round as the first if you aim high enough. Or you might be as likely to find one in the third or fourth rounds, or even later if you save the pennies from your draft pool allotment in the second and use them later. Going cheap early in the MLB draft does not spell doom anymore.

First some background for the uninitiated: the Rule 4 draft governs the allocation of amateur talent to teams, from worst to best by last year’s records. The Mets finished with the 14th-worst record in 2014, so they will be picking 14th in every round except the first couple, which we’ll further explain below.

Unlike in the other sports, teams can draft players from a variety of sources. The following players residing in the United States and its territories are eligible to be drafted:

• All college juniors and seniors
• College freshmen and sophomores at four-year programs who are at least 21 years of age at the time of the draft
• All junior college players, regardless of age
• High school seniors

All draftees except college seniors need to sign by a league-mandated deadline of July 17th, designed to give teams some semblance of control over the players they draft, and to prevent rich teams from taking advantage of the old draft-and-follow system by which teams used to draft kids they had no intentions of signing now, but if they showed more promise the following spring they’d offer a lot more money and snatch them up before they could re-enter the draft. If they fail to sign by the deadline, they automatically re-enter the draft for next season or whenever they might next be eligible according to the guidelines listed above.

Any team that fails to sign its first- or second-round pick will be provided a compensation pick one slot later in the following year’s draft. So if you fail to sign the number one overall pick this year, you get the second pick next year. This happened to the Astros last year, who now possess two of the top five picks in this year’s draft. The one caveat is that any if any pick awarded as compensation for the failure to sign a previous year’s pick doesn’t sign, the team is not awarded a compensation pick in the future. In other words, you have to play it safe with your compensation picks. Failing to sign a third-round pick will result in a compensation pick after round three but before round four the following season. From the fourth round onward, no compensation is awarded, so buyer beware.

Then there’s the matter of free agent compensation. When one team signs a free agent of substantial value—how that value is defined is not exactly known—whose prior team would like to retain his services enough to commit to a qualifying offer, the signing team will forfeit a draft pick, and the losing team will gain a compensation pick, although not the same pick. A qualifying offer is defined as a one-year contract for the average of the top 125 salaries in the game. In 2014, that number was a little over $15 million. The compensation picks awarded are chosen after teams make their first-round selections. The pick lost by the signing team will be the highest pick that team owns (save compensation picks for failure to sign a prior year’s pick), unless that pick falls in the top ten picks. If that is the case, the team will lose its next highest pick. The picks forfeited are not awarded to another team as they used to be; they are just eliminated from the draft. The Mets lost their first-round pick this year after signing Michael Cuddyer during the offseason.

There are also two "competitive balance" rounds, after the compensation pick round and after round two selections. These are determined by market size and team revenues and are the only picks in the draft that can be traded. The Mets do not own one of these.

As if all this wasn’t confusing enough, teams are all limited in how much they can spend on their draft classes. Each team is allotted a recommended spending pool based upon where they’re picking and how many picks they have. Any team that exceeds its spending pool by less than five percent will face a tax. However, overspending by more than five percent results in the forfeiture of a future first-round pick. Overspending by more than ten percent results in the forfeiture of first- and second-round picks, and overspending by more than 15 percent results in the forfeiture of two first-rounders. In other words, no one will overspend by more than the five percent. Based on the number of picks they have, the Mets have been allotted $3,587,800, the lowest total in the draft.

The draft begins at 7:00 PM EDT tonight. The first two rounds will be aired, including all compensation and competitive balance rounds. Rounds 3 through 10 will follow on Tuesday with the remaining 30 rounds on Wednesday (they move pretty fast).

Finally, as a reminder, here is a list of the draft preview content we’ve organized for your perusal:

• A recent history of players the Mets have taken in the second round: Part One and Part Two.
• A recent history of players the Mets have taken in the third round: Part One and Part Two.
• A look at how often players "fall" to the 53rd pick.
• And which players might "fall" to the Mets this year.
• A list of guys the Mets would be looking to draft if not for their signing of Michael Cuddyer.
• Four guys to keep an eye on when the Mets make their selection.