Compensatory Draft Picks Are Protected Under Current CBA

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Today, in our most recently published Mock Draft, we wrote about compensation picks for the Braves (No. 9), Diamondbacks (No. 26) and Dodgers (No. 31), under the assumption that if these teams didn’t sign their respective picks, they would not be given a compensation pick the following year.

We were incorrect and apologize for the error. Our mistake arose from discussions we have had with front office officials with a variety of teams who were under the same impression. Sources from five different teams who we contacted were also operating under the assumption that those compensation picks were not protected.

However, a Major League Baseball official explained to Baseball America that under the most recent Collective Bargaining Agreement that is no longer the case. Compensation picks that teams receive for failing to sign a player among the top three rounds are protected, for a second year. So a team can fail to sign a first-round pick, then fail to sign the compensatory pick the following year, but the compensatory pick for the unsigned compensatory pick is the team’s last chance to sign a player with that pick.

In Major League Baseball’s official rules, under the Rule 4 (which focuses on the draft) Section C, the language for a failure to sign picks and the results of that failure are as follows:

“(C) If a Major League Club fails to sign a player who was selected with a draft selection awarded pursuant to this Rule 4(c)(2) before the player is removed from the Club’s Negotiation List pursuant to Rule 4(d) (Effect of Selection on Player), the Club again shall receive a supplemental selection in the next First-Year Player Draft as compensation for failing to sign its original supplemental selection, as follows:

“(i) If the unsigned supplemental selection was selected prior to the third round, the Club shall receive a supplemental selection in the next First-Year Player Draft at the same numbered position as its unsigned supplemental selection. In the event that the same numbered position is awarded to another Club as supplemental compensation pursuant to Rule 4(c)(2)(A) above, the Club awarded the supplemental selection for the second time shall be awarded the selection following the selection awarded to the other Club pursuant to Rule 4(c)(2)(A) above.

“(ii) If the unsigned supplemental selection was selected in the third round, the Club shall receive a supplemental selection after the completion of the third round, and shall select after all of the Clubs awarded selections pursuant to Rule 4(c)(2)(B) above. If more than one Club is awarded a second supplemental selection under this paragraph, the Clubs shall select in the same order as the original draft selections that resulted in the Club being awarded supplemental compensation pursuant to Rule 4(c)(2)(B) above.”

The language is a bit unclear without reading the entire section Rule 4 section for context, but the emphasis added is the important part: if a team fails to sign a player with a previously awarded compensation pick for failing to sign a player in the previous draft, they still are awarded a compensation pick the following year.

For example, in the 2018 draft the Braves failed to sign Carter Stewart with the No. 8 pick in the draft. Because this was a pick in the first three rounds, the team was awarded the No. 9 pick in the 2019 draft as compensation for not signing Stewart. If the Braves again fail to sign their selected player with the No. 9 pick in the 2019 draft, they would again receive a compensation pick in the 2020 draft.

While this might seem like a minor detail, it changes the leverage of the compensation picks significantly in the favor of teams. Under the previously understood rules, the player would have more leverage knowing that the team would get no compensation if an agreement wasn’t reached. Now, however, with a compensation pick still guaranteed, teams still hold the same leverage that they otherwise would with any draft pick.