The uncertainty over the Rule 5 draft could have a far-reaching impact on the trade and free agent markets because teams have stopped scouting minor leaguers.
Multiple teams have inquired with the league about the possibility of canceling the Rule 5 draft. In the draft, teams can select non-40-man-roster players and pay $100,000 for their rights, but must keep them on their 26 man major league roster for the entire season. With minor league spring training underway and games set to begin as early as March 12, executives are wondering how the league plans to handle the complicated case, even though no decision has been made on the major league portion of the Rule 5 draft.
MLB and the MLB Players Association have not discussed the Rule 5 draft during their talks, according to sources. The union and league have to agree on scratching it for one season. The MLB and the MLBPA declined comment when contacted.
According to sources, 16 organizations have sent letters to all teams barring scouts from their complexes because of fear of losing players if the Rule 5 draft continues. According to sources, the Cincinnati Reds, Milwaukee Brewers, Oakland A&s, and Seattle Mariners are the only teams that allow scouts from other organizations to watch their minor league players. The five have formed an agreement in which they can look at each other's prospects. Other organizations don't have a policy or split plan. The public and media will be able to see the team on March 7 but not until March 17 when games start.
Sources said that the decisions to ban scouts could go much deeper than that. The trade market is expected to be busy as the game's transactional ledger reopens during a new collective-bargaining agreement. It would bring unnecessary risk for teams looking to rebuild through trades if they didn't have scouted players.
Slow movement in free agency has been attributed to a stagnant trade market. The Reds are shopping starting pitchers Chris Bassitt and Sean Manaea and others on the move, as well as first baseman Matt Chapman and third baseman Matt Chapman, because of the possible trade of them.
According to five general managers, if the Rule 5 draft is canceled, teams will be able to scout more freely and the lockout will be mitigated. Any Rule 5 changes would need the approval of the MLB Players Association.
The scouting shutdown was caused by the fear of other organizations getting new information on prospects who improved over the winter and applying it to the Rule 5 draft. Rule 5 picks are typically not impact players, but they are chosen from a pool of those who spent five years in an organization if they signed at age 18 or earlier, or four years at 19 years old or higher.
Six of the 17 major league Rule 5 picks remained with their teams for a full season. If a team removes a Rule 5 player from its big league roster during the season, it must offer him back to the team from which he was chosen for $50,000, but if it rosters him the entire time, it can send him back to the minor leagues the next year.
The Winter Meetings in December are where the Rule 5 draft usually takes place. The Rule 5 pick brings with it a penalty: less roster flexibility during the off-season.
The GMs said that teams want to take advantage of the extra time to scout players. While player acquisitions take into account a number of factors, using scouts to help note any changes over the winter would be novel for a Rule 5 draft.
It was suggested by The Athletic that skipping it for a year would benefit the union. Hundreds of free agents will hit the open market, which could mean few jobs. The teams could use the 26 man spots on free agents if they agreed to remove the Rule 5 draft.
The benefit for the players who are not members of the union is twofold. The chance to make a major league roster is the most important opportunity, but those who are returned to their former teams receive a significant raise, which players who have been on a 40-man roster receive.
Giving clarity on players to be named later is an issue that could be alleviated by removing the Rule 5. Multiple teams have PTBNLs from trades last year to choose, and while they typically must be selected within six months, the lockout prevents any movement onto a team's 40-man roster.
The Baltimore Orioles are expected to pick first in the Rule 5 draft. The minor league portion of the draft took place in December because the players on the 40-man rosters can still be moved.
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