The amateur baseball draft, known more precisely as the Rule 4 draft, is held once a year in July. It consists of 20 rounds and is limited to high school graduates, junior college players and college juniors, seniors and draft-eligible sophomores. It is followed by a period in which teams can sign undrafted but draft-eligible players, called non-drafted free agents (NDFAs).
The draft has evolved since its first year in 1965 with the current version somewhat favoring teams with the worst records in the previous year. Recently, changes were made to the draft creating a draft lottery to disincentivize losing to improve a team's draft slot. Other changes over the years included giving teams that made the playoffs in the previous year lower draft slots that are based on the round in the playoffs a team lost in, followed by ranking teams that lost in a particular round by the inverse of their record. Other rules added have been designed to disincentivize losing for many consecutive years and for signing qualifying free agents. Provisions also exist to remove draft picks if teams exceed their draft budget in a particular year by more than 4.99%.
The two things I would like to see changed in the Rule 4 draft is how the draft order is determined and making teams with limited resources spend a lot of money on this draft.
DRAFT ORDER
I would like to see the following changes in how the draft order is determined:
1. Eliminate the draft lottery
2. Eliminate round of elimination from the playoffs as a determiner of draft order
2. Determine the draft order using the following criteria in this order:
a. Non-playoff teams draft first
(1) Competitive balance teams draft first
(2) Worst 2 records in each league draft next (if not in above group
(3) Remaining non-playoff teams
(4) Highest team payrolls draft first in each category
b. Playoff teams
(1) Competitive balance teams draft first, sorted by highest payroll first
(2) Non-competitive balance teams draft next, sorted by worst record.
As an example of how this would work, see Appendix 1 below to see how this would work compared to the raw draft order for the 2026 Rule 4 draft
DRAFT BUDGETS
Draft budgets would continue to be determined by the sum of a team's draft slot bonuses in the first ten rounds of the draft. However, all competitive balance teams and the teams with the worst 2 records in each league would have an additional $5 million added to their draft budgets. The catch is that it would be mandatory that teams receiving the extra $5 million would have to spend at least 100% of their draft budget or be fined $10 million. All teams can, of course, still spend up to 104.99% of their total draft budget without losing future draft picks.
TRADING DRAFT PICKS
Competitive balance teams and other, non-playoff teams from the previous year can't trade draft picks.
Teams that can trade draft picks can only trade picks from rounds 11-20 (competitive balance picks can no longer be traded)
WHAT THESE CHANGES ARE DESIGNED TO DO
The goals of these changes in the Rule 4 draft are to:
(1) Favor teams with limited resources (competitive balance teams) by giving them higher draft picks
(2) Favor competitive balance teams that are spending a lot on payroll over those that aren't
(3) Make competitive balance teams and teams with the worst losing records spend a lot of money on the Rule 4 draft. Combined with my proposed international draft, competitive balance teams would have to spend $8+ million more each year to acquire amateur talent. Along with the salary floor I proposed, these changes would significantly increase the mandatory spending teams for the teams that are not spending a lot of money now.
These changes, in lieu of a salary cap, would move teams towards competitive balance by having them spend more on amateur talent instead of spending that money on mediocre ML free agents.
The main drawback to my plan is that the additional money that is being pumped into draft budgets would likely be used on high school players who, previously, went undrafted as teams couldn't meet their bonus demands and stay within their draft budget. Very few quality college players don't get drafted.
APPENDIX 1 - COMPARISON OF CURRENT RAW DRAFT ORDER vs DENNIS' PROPOSAL
Here are MLB's current raw draft order for 2026 and the draft order from my system, assuming that the 10 teams with CB-A and CB-B picks are still going to be: Minnesota, Pittsburgh, Baltimore, St. Louis, Miami, KC, Colorado, Cleveland, Detroit and Seattle. Remember, my system is based on rewarding competitive balance teams and penalizing teams that are not spending much money in payroll. Advancing further in the playoffs has been removed as a penalty in my system as has, in large degree, rewardng non-playoff teams with the worst records. Penalties for finishing with a bad record too many years in a row are no longer necessary but other penalties (e.g., FA signings, leauge imposed penalties, etc.) will still be in place. The draft lottery will be discontinued under my system.
Pick Current Raw Draft Order Dennis Changes Draft Order
1. White Sox Baltimore
2. Minnesota KC
3. Pittsburgh St. Louis
4. Baltimore Minnesota
5. Athletics Colorado
6. Atlanta Pittsburgh
7. Tampa Bay Miami
8. St. Louis New York Mets
9. Miami Houston
10. Colorado Texas
11. Washington Atlanta
12. LA Angels LA Angels
13. Arizona San Francisco
14. Texas Arizona
15. San Francisco Washington
16. KC Tampa Bay
17. NY Mets Chicago White Sox
18. Houston Athletics
19. Cincinnati Seattle
20. Boston Detroit
21. San Diego Cleveland
22 Cleveland Cincinnati
23. Detroit Boston
24. Chicago Cubs San Diego
25. New York Yankees Chicago Cubs
26. Philadelphia LA Dodgers
27. Seattle New York Yankees
28. Milwaukee Toronto
29. Toronto Philadelphia
30. LA Dodgers Milwaukee
OK, that's it for for this time. Next time we will talk about various miscellaneous rule changes that impact competitive balance and the final blog post in this series will look at various game-based rule changes.
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