For Rule 5 Draft Picks, PEDs Pay Way Too Well

On Thursday, Major League Baseball announced that Phillies lefthanded reliever Daniel Stumpf had been suspended for 80 games after testing positive for a performance-enhancing drug.

Stumpf becomes the third Rule 5 pitcher in the past two seasons to be suspended for PEDs, joining lefthanders David Rollins and Andrew McKirahan from last year’s Rule 5 class.

In Stumpf’s case, he will miss the rest of April, all of May, June and part of July. If the Phillies opt to keep him on their roster,  he will then have to spend the rest of July, August and then September on the active roster to meet Rule 5 roster requirements. Otherwise the Phillies will have to place him on waivers to offer him back to his original team—the Royals.

For the Phillies, Stumpf’s suspension will actually make it easier to keep him on the roster. Rule 5 players cannot be sent to the minors during their Rule 5 selection season. But they also must remain on the active roster for at least 90 days before they are free and clear of Rule 5 eligibility requirements. Because of Stumpf’s suspension, the Phillies don’t have to worry about carrying him on the active roster for the rest of the first half of the season. Now 32 of those 90 days on the active roster could come after Sept. 1 when the expanded rosters means a team can carry a Rule 5 pick without otherwise limiting their roster.

What this suspension indicates is that there might be a need for a rule tweak in the next collective bargaining agreement. Because as it stands right now, the risk/reward of performance enhancing drugs for a potential Rule 5 pick is often dramatically slanted toward taking PEDs.

Remember that Rule 5 picks are players who were deemed a fringy-enough prospect to be left off of their original team’s 40-man roster. With few exceptions, a college player doesn’t become eligible for the Rule 5 draft until four years after they were drafted. So at age 26 or 27, their team has just told them that they aren’t being added to the 40-man roster. The chances of such a player becoming a future big league star are marginal at best, especially if they are already slotted as a minor league reliever. In many cases, these are the players who do not land a minor league contract just two or three years later when they’ve reached minor league free agency as they reach their 30s.

Rule 5 picks are marginal big leaguers almost by definition. Of the 36 players picked in the the 2011-2013 Rule 5 picks, only four are currently in the big leagues. But 12 of those 36 “stuck” on a roster for their Rule 5 season, which means they made the major league minimum salary (currently $507,500) in that year in the big leagues, plus an additional $100 a day per diem on road trips.

The financial difference between being a non-40-man roster player and a big leaguer is massive. Minor leaguers in Triple-A who are not on the 40-man roster often make less than $2,000 a month. A big leaguer making the major league minimum makes more than $2,000 per day. In his roughly 10 days on the big league roster, Stumpf has already made more than $25,000, significantly more than he made all of last year in the minors.

So if you are a potential Rule 5 pick, the potential reward from a PED that gives you a little extra on your fastball might be the difference between sticking on a big league club or being offered back to your original team. It often can also be the difference between being picked in the Rule 5 draft and being passed over. For a lefty reliever who is trying to get picked in the Rule 5 draft, turning your 91-92 mph fastball into a 93-94 mph offering can earn you hundreds of thousands of dollars.

If that means that the player tests positive for PEDs, it will cost him roughly one-half of his major league season. For the team that picked him in the Rule 5 draft, that’s often a bonus—not a downside—as it means that the team doesn’t have to carry him on the major league roster for half the season. And as McKirahan showed last year, a player can still fulfill the Rule 5 roster requirements despite an 80-game suspension.

McKirahan’s example is especially illuminating. He tested positive for a PED which cost him effectively half the season. But he still made roughly $250,000 for his half season in the major leagues. And he fulfilled the roster restrictions that come with being a Rule 5 pick, so he came to Braves’ big league spring training this year as a regular member of the 40-man roster.

Even if he had been sent to the minors for this full season, that would have brought him a salary bump, as the minimum salary for a 40-man roster player sent to the minor leagues is around $40,000. As a 40-man roster player who spent the previous season in the majors, McKirahan would have made more than $100,000.

And that salary bump doesn’t go away. Players’ minor league salaries can only be cut by a percentage every year, so McKirahan will make much more money next year if he is on a minor league roster and his salary will stay elevated for years to come.

McKirahan ended up blowing out his elbow in spring training, needed Tommy John surgery and will spend the entire 2016 season on the Braves’ 60-day disabled list. As such, he’ll earn his major league minimum salary. So McKirahan will make roughly $750,000 in 2015 and 2016. And he’ll have a year and a half of major league service time.

If McKirahan had not been picked in the Rule 5 draft and had spent the past two seasons in the minor leagues, he would have likely made less than $25,000 over those two seasons.

Yes, he does have the carry some stigma from being caught for PEDs, but a $725,000 swing financially salves some of those wounds. The financial incentives to take a PED are massive.

So what can be done? In the next collective bargaining agreement, it would make sense for the union and the owners to increase the penalties for Rule 5 picks who test positive for PEDs. A full year suspension would eliminate much of the incentives to cheat. It would ensure that teams would still have to carry a Rule 5 pick who returned from the suspension for another season on the big league roster. The roster restrictions are already the biggest impediment to most Rule 5 picks remaining on the big league roster, so the thought of carrying a Rule 5 pick for a full season after he didn’t play for a full year would be beyond the pale for most teams.

But until then, it makes sense for potential Rule 5 picks to use PEDs. The potential payoff is way bigger than the penalty.