Competitive Balance Draft picks were implemented in the 2012-16 Collective Bargaining Agreement. The process to assign picks was amended in the 2017-21 Collective Bargaining Agreement.
The 10 lowest-revenue clubs and the clubs from the 10 smallest markets are eligible to receive a Competitive Balance pick (fewer than 20 clubs are in the mix each year, as some clubs qualify under both criteria). All eligible teams are assigned a pick, either in Competitive Balance Round A or Round B. Round A falls between the first and second rounds of the Rule 4 draft, while Round B comes between the second and third.
Under the 2017-21 CBA, six clubs will be awarded picks in Round A based on a formula that considers winning percentage and revenue. Those six teams will pick in Round A in 2017, 2019 and 2021. The remaining teams -- estimated to be between six and eight -- will pick in Round B in those years. The groups of teams, which will not change for the duration of the 2017-21 CBA, will switch picking in Round A and B in alternating years based on their initial assignment of round in 2017.
Clubs drafting in the Competitive Balance Rounds also receive more international bonus pool money than the minimum of $4.75 million. Those drafting in Competitive Balance Round A will receive $5.25 million, while those in Competitive Balance Round B will get $5.75 million.
Unlike other Draft picks, Competitive Balance Draft picks can be traded. However, they cannot be dealt simply in exchange for cash, and can be traded only by the club to which it was awarded. In other words, the picks may be traded no more than once.
History of the rule
Under the 2012-16 Collective Bargaining Agreement, the 10 lowest-revenue clubs and the clubs from the 10 smallest markets were entered into a lottery. The first six clubs selected in the lottery received a Draft selection in Competitive Balance Round A, while the next six clubs selected received a pick in Competitive Balance Round B.
On June 1, 2014, the Marlins traded their Competitive Balance Round A selection to the Pirates in exchange for right-hander Bryan Morris. The Pirates received the 39th pick in the Draft that followed just days later.