With supplementary picks aplenty, baseball’s first-year player draft can be confusing to anyone trying to follow along for the first time.
While both the NFL and NBA drafts are multiple-day, made-for-TV extravaganzas watched annually by a significant percentage of each sport’s fans, most baseball fans are blissfully unaware of when MLB’s first-year player draft (or Rule 4 Draft) even takes place, let alone how many rounds there are or why all the supplementary picks exist.
There are several reasons why the MLB draft lags well behind the other two in popularity.
The biggest is that while first-round picks in the NBA and NFL drafts are often starters by the next time their new employer plays a game, it takes several years for the vast majority of MLB first-round picks to make their big-league debuts — if they ever make it to the big leagues at all.
It doesn’t help matters that the MLB draft pops up in the middle of the regular season while the other two leagues have several weeks or months during the offseason with nothing better to do than ramp up nationwide interest in a draft.
But if you’re interested in becoming an MLB draft follower, allow us to walk you through the ins and outs of what has recently been an annual 600ish-pick party.
How Does the MLB Draft Work?
Players residing in the United States, Canada or Puerto Rico who have graduated from high school but not yet attended a four-year college are eligible to be selected in the MLB draft. Players are also eligible to be drafted upon either completing their junior year of college or turning 21.
(Players who go to junior college are eligible to be drafted regardless of time spent there, while international players are subject to an entirely separate signing process.)
Just because a player is drafted doesn’t mean he becomes a part of that organization, though. They also need to agree on a contract. Though the majority of draft picks are players who have already spent at least three years in college, it’s not particularly uncommon for a team to draft a high schooler, hoping it can convince him to go straight to the minor leagues instead of going to college.
But if he doesn’t sign — as was the case with Gerrit Cole, whom the New York Yankees drafted 28th overall in 2008, only to have him go to college and end up with the Pittsburgh Pirates as the No. 1 pick three years later — too bad.
It’s also possible for a team to draft a junior in college, but lose him if he decides to return for a senior season and re-enter the draft pool the following year. Beyond that cursory overview of the available player pool, let's look at some other details on how the MLB draft works.
How many rounds are there in the MLB Draft?
For many years, the answer to this question seemed to be: The limit does not exist.
Eventual MLB Hall of Famer Mike Piazza was famously a 62nd-round pick in the 1988 MLB draft, going 1,390th overall to the Los Angeles Dodgers. And in 1996, there were inexplicably 100 rounds in the draft, with 1,740 total players selected.
From 1998-2011, the draft was capped at 50 rounds, with well over 1,400 players selected on an annual basis.
It was trimmed to 40 rounds starting in 2012, which remained the case through 2019. Even then, there were more than 1,200 picks each year.
Because of the COVID-19 pandemic, though, the 2020 draft was truncated to just five rounds, and it has been a more manageable 20 rounds ever since.
Now, over the course of three days, a bit more than 600 baseball players’ dreams come true each year by hearing their name called at the draft.
What are the “Competitive Balance Picks?”
Since 2013, there has been a “Competitive Balance Round A” at the end of the first round, as well as a “Competitive Balance Round B” at the end of the second round.
The teams eligible to receive these ‘bonus’ draft picks are the 10 lowest-revenue clubs from that season, as well as the ones from the 10 smallest markets. (There’s often quite a bit of overlap, resulting in considerably fewer than 20 competitive balance picks.)
The general idea behind these supplementary selections is that because the small-market/low-revenue teams simply cannot compete with the big boys in free agency (on a regular basis, at any rate), they should receive a little something extra in the relatively early stages of the draft. That at least provides some hope of keeping pace with the likes of the Yankees and Dodgers.
The order in which the (supposedly) cash-strapped franchises get to make their competitive balance picks is determined by a lottery. And while no other draft picks can be traded, the competitive balance picks can be — which we saw several cases of in 2024, including the Kansas City Royals sending a prospect and the No. 39 overall pick to the Washington Nationals for Hunter Harvey, just a few days before the draft.
The Competitive Balance teams are also awarded a bit more international bonus pool money to be used when signing free agents who are neither eligible for the Rule 4 draft nor eligible for normal free agency. (This is how the Angels ended up with Shohei Ohtani for six seasons at pennies on the dollar beginning in 2018, as he was beholden to international bonus pool rules, having not yet played enough years professionally to be immediately eligible for free agency.)
What about the “Compensation Picks?”
Speaking of Ohtani, the Angels were awarded a compensatory pick (at No. 74 overall) in the 2024 draft because he, upon reaching free agency, declined his qualifying offer from the Halos en route to signing his $700 million contract with the Dodgers.
The amount of that qualifying offer changes slightly each year, but it is a one-year proposal set at the average of the 125 highest salaries from that season. (In Ohtani’s case, it was $20.325 million.)
Players slated for free agency are only eligible to receive a qualifying offer if they have both never received one before and spent the entire season on that team’s roster.
If the offer is rejected and the player signs somewhere else in free agency, the team losing the player gets a compensation pick, while the team signing the player is subject to losing both draft picks and international bonus pool money.
(Where exactly the compensation pick falls and how much the ‘buyer’ has to give up is based on the size of the new contract and whether the team pays a luxury tax, receives revenue sharing or falls somewhere in between those financial extremes.)
Same as the Competitive Balance picks, the whole point here is to lessen the continental divide between the haves and the have-nots, without imposing a salary cap.
Teams can also receive a compensation pick for failing to sign a first-round pick in the previous draft. This rarely happens anymore, as teams will just refuse to select a player early in the draft unless they are confident he’ll sign. It did come up in 2021, though, when the Mets took Kumar Rocker No. 10 overall and chose not to sign him after medical concerns arose. They were awarded the No. 11 pick the following year because of it.
What is this “Prospect Promotion Incentive” business?
Service-time manipulation was a big concern raised by the MLB Players Association during the Collective Bargaining Agreement negotiations that led to a lockout and a delayed start to the 2022 season.
The long and short of it is that teams seemed to be deliberately putting off calling up top prospects for as long as possible in hopes of extracting more value out of them before they spend enough time in the majors to reach free agency.
But with the Prospect Promotion Incentive (PPI), a team can get rewarded with a draft pick in between the first round and Competitive Balance Round A if they call up a consensus preseason top-100 prospect; if that prospect spends at least 172 days on the roster (or Injured List); and either wins Rookie of the Year that season or finishes top-three in an MVP or Cy Young vote prior to becoming arbitration-eligible.
A team can only receive one PPI pick per year, and a player can only produce one PPI pick in his career, even if he wins ROY and subsequently wins an MVP.
It does already seem to be making an impact on how teams handle their top prospects, though.
The Seattle Mariners got one of these picks in the 2023 draft because Julio Rodriguez won AL Rookie of the Year in 2022. Same goes for the Arizona Diamondbacks (Corbin Carroll) and Baltimore Orioles (Gunnar Henderson) the following year.
MLB Draft lottery
While the competitive balance and compensation picks help level the playing field, the lottery system instituted for the 2023 draft aims to deter the outright tanking that we’ve seen at times in recent years.
Case in point: The Houston Astros picked No. 1 overall in each of 2012, 2013 and 2014 and had two top-five picks in 2015 before deciding to spend money again and reeling off seven consecutive ALCS appearances.
Draft order used to be solely based on the inverse order of the previous season’s standings. The Baltimore Orioles and Arizona Diamondbacks each suffered 110 losses in 2021, so they were awarded the first two picks in the 2022 draft.
Now, however, the top six picks are determined by lottery.
For suffering an MLB-worst 107 losses in 2022, the Washington Nationals were merely guaranteed a top-seven pick in the 2023 draft, with a 16.5% chance of drafting first overall. They ended up second in that lottery, with the Pittsburgh Pirates winning and getting to take Paul Skenes at No. 1.
There’s another wrinkle, too. Teams who pay into revenue sharing are not eligible to make lottery picks in consecutive years, nor are teams who benefit from revenue sharing eligible to make lottery picks in three consecutive years.
As such, not only did the Nationals miss out on Skenes in 2023, they also had to settle for the 10th pick in 2024, because they pay into revenue sharing.
Worse yet, the Chicago White Sox set a modern-day record with 121 losses in 2024 and only got the No. 10 pick in 2025 to show for it, since they pay into revenue sharing and won the No. 5 pick in the previous year’s lottery.
Signing bonuses
This part is much more of a post-draft concern, but based on the sum of the “slot value” of every pick that it has, each team receives a bonus-pool amount from which it can pay out bonuses upon signing draft picks.
Notably, these amounts are simply signing bonuses and have no impact on the amount a player can/will be paid once he makes it to the majors.
For instance, 2012 No. 1 pick Carlos Correa received a $4.8 million signing bonus; however, even after winning AL Rookie of the Year in 2015, it wasn’t until his fifth season in the big leagues that his salary eclipsed $1 million.
When Does the MLB Draft Take Place?
For decades, MLB’s first-year player draft was simply known as the June draft, because it was always held within the first two weeks of June. But that happens in the middle of the NCAA Baseball Tournament.
So as of 2021, the draft shifted to its new home in July, becoming a part of the All-Star Game festivities.
An unintended consequence of that change is that you no longer have high school players getting drafted and immediately reporting to rookie ball, because that season is all but finished by the time the draft takes place.
It won’t be much longer before there’s enough data to show how much of an adverse effect that is having on the professional timelines of those young draft picks. But the decision-makers must have felt it was better than the alternative of drafting a pitcher No. 1 overall and then praying his elbow doesn’t explode in the College World Series.
MLB Drafts for Fantasy Baseball Players
Unless you’re in some sort of outrageously deep dynasty league, MLB’s Rule 4, first-year player draft probably doesn’t need to be on your radar for fantasy baseball purposes.
For every Skenes who makes his MLB debut 10 months after being drafted and immediately flourishes, there are a few dozen first-round picks who never even make it to the majors.
Through the end of the 2024 campaign, only 16 of the 36 first-round picks from 2021 had appeared in at least one MLB game. Even of those 16, the only one with any legitimate fantasy value in 2024 was Jackson Merrill, who went 27th overall in that draft and didn’t make his big-league debut until 983 days after being drafted.
That said, it’s definitely a good practice to keep tabs on top prospects who have at least progressed to the Double-A level, as a former first-round pick can blossom into a Rookie of the Year candidate (and a solid fantasy asset) almost instantaneously upon getting called up to the show.
Frequently Asked Questions
Why is it called the Rule 4 Draft?
It’s simply due to the section of MLB’s rule book in which the draft’s policies and procedures are housed.
There is also a Rule 5 draft.
Held annually during the winter meetings in December, the Rule 5 draft allows teams that don’t have a full 40-man roster to purchase prospects from other teams who have been signed for at least four years (or five, if signed under the age of 19) without being added to their 40-man rosters.
Rule 5 picks rarely amount to much in the majors, though Mark Canha and Anthony Santander are considerable exceptions to that rule.
There are no Rule 1, Rule 2 or Rule 3 drafts, though. Rule 1 is presumably that there’s no crying in baseball.
How many picks are there in the MLB Draft?
It changes marginally from year to year based on the number of competitive balance picks, compensation picks, PPI picks and picks lost for one reason or another.
In the first year of the current 20-round format (2021), there were 612 total selections. The tallies were 616, 614 and 615 in 2022, 2023 and 2024, respectively.
How long does that take?
The MLB draft isn’t quite as drawn out from a time-passed-per-pick perspective as the NBA and NFL drafts are, but it does take them three days to complete the 20-round process.
What’s wild is they used to cram way more picks into an even tighter window. The aforementioned 1996 draft with 100 rounds and 1,740 total picks? That was completed in two days.
Make Sleeper Your First Pick
Now that you know some more about the Major League Baseball draft, perhaps you want to do a little drafting of your own in a fantasy league.
If so, give Sleeper a try. The app is top notch, and its fantasy offerings are plentiful, from breaking news, to the Sleeper Picks DFS game, to season-long leagues.
If you’re still relatively new to the world of baseball or just looking to expand your knowledge of the game, we’ve got all sorts of articles to help you out, from the different fantasy baseball scoring systems, to an explanation of baseball statistics, a primer on the positions in baseball and, of course, tips for playing fantasy baseball.
