One of the most misunderstood and at the same time overemphasized parts of the offseason, the Rule 5 draft occurs each December as part of the Winter Meetings.
Here's a short FAQ:
Q: So who's eligible for this thing?
A: Eligible players are those who not reside on a 40-man roster and have been in a major-league organization for either three or four years.
Q: Why three OR four years?
A: Glad you asked. Those drafted at age eighteen or younger must be in an organization four seasons before obtaining eligibility. Those age nineteen or older are eligible after three years in a major-league organization.
Q: So what happens if a player is drafted?
A: The drafting team first of all places the player on their 40-man roster, so a team must have an open roster spot in order to draft a player. Then the drafting team must keep that player on its 25-man roster the next season.
Q: What happens if the drafting team can't justify giving the player a 25-man roster spot?
A: The player must first pass through waivers. If he clears, he's then offered back to his original team.
Q: What type of player is drafted in the Rule 5 draft?
A: Generally, teams will draft players with at least some upside, because otherwise why go to the trouble of keeping the player on your 25-man roster all year? Also, clubs tend to draft prospects that can serve as reserve players; first base prospects with little defensive versatility or speed tend to be passed over, while middle infielders that can play good defense and steal a base are prime candidates. Raw but talented pitchers also seem to be picked.
Q: How many players are usually selected in this draft?
A: Last year, twelve players were selected in the major-league section.
Q: Major-league section? You mean there's other parts to this thing?
A: Yes. There's also a AAA and AA phase, but this is used mainly to fill minor-league rosters.
Q: So how often does a player selected stay on the 25-man roster the entire year?
A: If I had to hazard a guess, about 25% of draftees stick with their new teams.
Q: So why worry about it?
A: For teams with deep farm systems, you can lose some decent prospects. But at the same time, you also can't protect everyone at the expense of your major-league club. Setting your 40-man roster is a balancing act; you have to make sure you protect your best prospects, while making room for free agent acquisitions and the like.
Q: So who's in danger of being selected this year?
A: I'll throw out three players who fit a Rule 5 profile:
(1) 2B Eider Torres. A middle infielder with speed. Good defensive reputation. Also relatively young.
(2) OF Ben Francisco. Can play all three outfield positions. Also has good speed.
(3) LHP Chris Cooper. LOOGY candidate; good numbers in Akron's bullpen.
There's other players as well (Dan Denham, for example), but I think these three are pretty indicative of the type of player that gets drafted.
Q: One last question: why is it called the Rule 5 Draft? And can I call it the Rule V Draft (I like the look of Roman numerals)?
A: First of all, it is the Rule 5 Draft. If you referred to it as the Rule V Draft, you'd be incorrect. The Rule 5 Draft gets its name from Rule 5 of the Professional Baseball Agreement. Real creative, isn't it?