December 7, 2005
Winter Meetings Prospectus
The Rule 5 Draft
Though not many people attend, the draft is open to the public. Before you enter you can grab a Selection Meeting sheet, which details the draft order and a handy scorecard with which to keep track of the action. Held in a large auditorium, the setup will look familiar to those who have watched their share of NFL and NBA drafts. Thirty tables are lined up, one for each team. Executives not sitting at the team tables watch from the audience along with the media and other interested parties, creating an interesting dynamic of interested observer and very interested observer. This is very different from the Rule 4 draft, which is conducted via a conference call that everyone within earshot can hear and can contribute to.
Another thing to keep in mind is that the Rule 5 is not limited to the few players who get selected to appear on Major League clubs. There is also a Triple-A and Double-A phase to the draft as well. This is not to say, however, that everything is different. While the Rule 4 draft does take two days simply because of the quantity of players selected, the draft moves very swiftly, one pick fired right after the other. The pace of the Rule 5 draft is similar, if not faster. In fact, 2004's draft didn't take much more than an hour to finish.
Though the flurry of activity just before the Draft may lead some to believe that this is all a very last minute thing, teams actually start planning for the Rule 5 Draft months in advance. Much like they do with potential free agents, Major League Baseball distributes a list of players that will qualify to be selected in the Rule 5 draft early in each season. By doing so early, scouts and executives will have the opportunity to spend a little extra time observing the Rule 5 eligible players, regardless of their eventual status on a 40-man roster. When MLB freezes rosters and distributes the Reserve List, a front office will come together with all of its information--scouting reports, recommendations, statistics, etcetera--and decide what the best course of action will be. There are generally three courses of action a club can take with respect to its Rule 5 pick during the Major League phase, but all of them stem from how a team defines its 40-man roster. A 40-man roster consists of your 25 Major League players, and the remaining 15 will be a mixture of replacement level players who can contribute as injuries and other situations arise, and a number of projectable, future Major Leaguers. How clubs define that secondary mix will ultimately determine how a club looks at the Rule 5 draft.
One way to go is to do nothing. Some teams do this frequently. For instance, under Brian Cashman, who has been at his current post since 1998, the Yankees have made six Rule 5 selections, but have never made one during the Major League phase. Some teams simply do not work under a model that allows them to carry a player who may not contribute for an entire season.
Another strategy a team can take is to select a player for another club. In order for this to happen, a Club has to have first decided that they will not be selecting anyone with their pick. "Teams generally try to network with one another and feel each other out," explains Tripp Norton, the Orioles Assistant Director of Minor League Operations. The Orioles made such a transaction in 2004 when they selected Luke Hagerty from the Cubs on behalf of the Florida Marlins. The receiving club agrees to compensate the selecting club for the $50,000 cost of the selection, in addition to a future consideration. Norton further explained that this player will not be a real prospect, and is generally selected from a list provided by the receiving club.
The third strategy, of course, is to actually make a selection. In speaking with industry insiders, there are two distinct ways that clubs strategize for their selections. One is to select a guy in the hopes of stashing him on the roster for the season and returning him to the minors the next year in order to build depth any way possible. This is generally employed by teams that don't expect to compete in the coming season, as they want to get better any way possible and can afford to gamble with the roster spot.
The other main strategy is to see who will be a good fit for the upcoming roster. This type of player is generally one with a more limited skill set, but who could be a contributor for that season. The Red Sox employed this strategy in the '02 draft, trying to fill left-handed reliever and backup outfielder/pinch runner roles, by selecting Javier Lopez, Matthew White, and Adrian Brown in the Major League phase. While Lopez and White did not ultimately stay with the Sox, Brown did remain, filling what is today known better in Boston as "the Dave Roberts role." Brown appeared in 4 ALDS games vs. Oakland in a pinch-hitting and pinch-running capacity. Such players are desirable choices as they will almost always be earning the Major League minimum and allow teams to avoid overpaying for an infrequently used player.
Overall, the Rule 5 draft has increased in prominence the past few years. From 1995-2001, an average of 60 players were chosen, but in the three most recent drafts, that average has increased 25%, to just over 79 players. While those inside the game do not attribute this increase to any single reason, it is apparent that teams are at the very least considering it as a legitimate way to build depth in their organization in an efficient and inexpensive fashion. Another interesting byproduct of the Rule 5 draft are the trades that are made in the days leading up to the draft--a recent example would be the Jon Leicester trade--where a player can be traded from one 40-man roster to another for a Player To Be Named Later, simply because rosters are frozen. In essence, a team executing this type of trade is conducting a Rule 5 type transaction, but with more certainty for both clubs--one does not have to worry about other teams picking their player before they get the opportunity, and the other club is not faced with a situation where they will lose a player of value for nothing more than a $50,000 transaction fee.
Nevertheless, at least one industry insider believes that the 2005 Draft will be a bit uneventful. One thing that lends credence to that theory is that with the Meetings earlier this year there are other issues on which to focus, such as who was offered salary arbitration. The second reason for this is because, as David Regan points out, there really aren't many attractive choices, as this year's Andy Sisco seems nowhere to be found.
Paul Swydan is a contributor to Baseball Prospectus. He can be reached here.