Changes in the new CBA affect the MLB draft

The MLB and MLBPA agreed on a new CBA on November 22nd, 2011, and it has some major implications on the MLB draft beginning in 2012. Source (MLB.com) for the summaries below can be found here.

Draft Pick Compensation:

1. The Elias Ranking system for ‘Type A’ and ‘Type B’ free agents has been eliminated.

2. A new draft pick compensation system will be put in place.

a. A player has to be with the team for the entire season for them to get compensation.

b. The former club has to offer him a guaranteed 1-year deal worth the average salary of the 125 highest paid players from the prior season. The offer must be made by the end of the 5 day ‘quiet period’ and the player will have 7 days whether to accept the offer or not.

c. A team signing a player that would require compensation will give up their 1st round pick, unless they are picking in the top 10. If they pick in the top 10, they would give up their 2nd highest pick.

d. The players former team will receive a pick at the end of the 1st round. Reverse order of winning percentage will be used in determining the order.

Rule 4 Draft
1. The draft is still held in June, but the signing deadline has been moved to between July 12 and July 18th, depending on All-Star Game date.

2. Only Minor League contract are allowed to be signed.

3. Signing bonus pools

a. “Each Club will be assigned an aggregate Signing Bonus Pool prior to each draft. For the purpose of calculating the Signing Bonus Pools, each pick in the first 10 rounds of the draft has been assigned a value. (These values will grow each year with the rate of growth of industry revenue.) A Club’s Signing Bonus Pool equals the sum of the values of that Club’s selections in the first 10 rounds of the draft. Players selected after the 10th round do not count against a Club’s Signing Bonus Pool if they receive bonuses up to $100,000. Any amounts paid in excess of $100,000 will count against the Pool.”

b. Penalties for exceeding the Signing Bonus Pool are:
Excess of Pool Penalty - (Tax on Overage/Draft Picks)
* 0-5% - 75% tax on overage
* 5-10% - 75% tax on overage and loss of 1st round pick
* 10-15% - 100% tax on overage and loss of 1st and 2nd round picks
* 15%+ - 100% tax on overage and loss of 1st round picks in next two drafts

4. Draft picks that are forfeited will be given to other teams through a lottery. Odds are based on prior season’s winning percentage and prior season’s revenue. Only teams that don’t exceed the Signing Bonus Pools are eligible for the lottery.

5. Competitive Balance Lottery

a. For the first time, Clubs with the lowest revenues and in the smallest markets will have an opportunity to obtain additional draft picks through a lottery.

b. The ten Clubs with the lowest revenues, and the ten Clubs in the smallest markets, will be entered into a lottery for the six draft selections immediately following the completion of the first round of the draft. A Club’s odds of winning the lottery will be based on its prior season’s winning percentage.

c. The eligible Clubs that did not receive one of the six selections after the first round, and all other payee Clubs under the Revenue Sharing Plan, will be entered into a second lottery for the six picks immediately following the completion of the second round of the draft. A Club’s odds of winning the lottery will be based on its prior season’s winning percentage.

d. Picks awarded in the Competitive Balance Lottery may be assigned by a Club, subject to certain restrictions.

e. Top 200 prospects will be subject to a pre-draft drug test and will participate in a pre-draft medical program.

Jeff Passan (twitter) - Slots for pick #1-4 are going to be $7.2 million, $6.2 million, $5.2 million, and $4.2 million. Teams do nkow have to spend that amount though.

Some other readings on affects of CBA on the Draft:
Baseball America - New Labor Deal Features Major Draft Changes
Jeff Passan Yahoo! Sports - Landmark CBA’s draft dollars cause consternation