Why We Should Play The Most Sensible Lottery
General Managers (GMs) in Major League Baseball (MLB) often want to try to catch lightning in a bottle when and if they can, especially given the current economics of the game, where the average salary of a big league player now exceeds $4,000,000 per season. One highly economic way often utilized that goes far back in time is the infamous Rule Five draft, which has produced the likes of José Bautista, George Bell, and Kelly Gruber, all of which are familiar names for those who follow the Toronto Blue Jays here north of the forty-ninth parallel.
For those of you who are not well acquainted with the Rule Five draft, the process allows teams to select other team’s players who are not presently on their team’s forty-man roster for $50,000, providing that the player was (a) eighteen years of age or younger on 5 June before their signing, and that the upcoming Rule Five draft is the fifth one, or (b) nineteen years of age or older on 5 June before their signing and that the upcoming Rule Five draft is the fourth one. While less common, a ball club can also select a player from a Double-A (or a lower) affiliate of another team to play for the former’s Triple-A affiliates for $12,000. Likewise, a ball club can select a player from a Single-A (or a lower) affiliate of another team to play for the former’s Double-A affiliates for $4,000. Much like the first-year player (Rule Four) draft, the selection order of all thirty ball clubs goes from the worst team to the best one, based on their win-loss record from the previous regular season, in each round. If a team selects a player from another ball club, the team making the selection must immediately add the selected player its forty-man roster. Therefore, it is understood that a ball club that has exhausted all spots on its forty-man roster will not be eligible to take part in the Rule Five draft. Furthermore, an important caveat for the team making a selection is that it must keep the chosen player on its twenty-five-man major league roster for the whole season (and active for a minimum of 90 days) after the draft, meaning that the chosen player can neither be optioned, designated to the minor leagues, or put on the sixty-day disabled list. This side-steps the requirement of keeping the player on the twenty-five-man major league roster. The ball club does have the right to trade or waive the player at any time, however. Should the player get waived and clear waivers by not inking a contract with a new MLB team, the team that made the selection, or the ball club in which the selected player is traded to before the player is waived, is obligated to offer the player back to the original team in which the player is selected from for half the price ($25,000), thereby effectively nullifying the Rule Five selection.
Assuming that each team makes a selection and presuming that each ball club that makes the selection ends up keeping the player for the entire season – although either scenario is not always the case in reality for reasons that I have already explained – then there would be thirty “projects” in which the ball club that made the selection would hope would pan out down the road in each season. From its current form in 1965 to this past season in 2015, there have been close to a total of fifty Rule Five drafts. If we were to multiply the annual thirty selections by the fifty seasons, we can deduced that there are approximately 1,500 total Rule Five selections that have been made over the course of the past half-a-century.
Out of those some 1,500 Rule Five selections, and excluding those who were selected in the minor league portion of the draft, there were some two dozen players who ended up becoming All-Stars, including: Bautista, Bell, Paul Blair, Bobby Bonilla, Everth Cabrera, Roberto Clemente, Jody Davis, Darrell Evans, Jason Grilli, Gruber, Josh Hamilton, Willie Hernández, Dave Hollins, Dave May, Evan Meek, Mike Morgan, Jeff Nelson, Bip Roberts, Johan Santana, Joakim Soria, Alfredo Simon, Derrick Turnbow, Dan Uggla, Fernando Viña, Shane Victorino, and Jayson Werth.
Within the above list, Clemente is a member of the 3,000 hit club and a Hall of Famer, inducted to Cooperstown by special election into the player category in 1973. Bell and Hamilton were American League Most Valuable Players (MVPs) in 1987 and 2010 respectively. Santana won multiple Cy Young Awards (in 2004 and 2006), including the pitching triple crown in the latter year.
Therefore, even though it is a long shot, it is possible to find diamonds in the rough from the pool. However, I have to admit that the odds aren’t great whatsoever. Using the above hypothetical numbers, the probability of unearthing a future All-Star player is about 1.73% (twenty-six in 1500). If we are talking about top guns, then the chances are even worse as the likelihood of finding an MVP is 0.13% (two in 1500). Of course, the odds of landing a Cy Young Award winner and a Hall of Famer are even bleaker as they are both at 0.07% (one in 1500)!
So why should a GM in MLB take a flyer on a player in a Rule Five draft? Simply put, you have nothing to lose because the cost is so minimal (at a mere $50,000, which is pocket change by MLB salary standard) and yet the upside is so huge potentially if you manage to win the jackpot. The last time I checked, the odds of winning Lotto 649 is approximately one in 14,000,000 and the chances of winning Lotto Max is around one in 28,600,000. Hence, as bad as the probabilities seemed, the likelihood of uncovering a hidden gem in the form of an All-Star player, an MVP, a Cy Young Award, or a Hall of Famer is still light years better compared to beating the near-impossible system in Lotto 649 and Lotto Max. By the way, despite last week’s record U.S. $1,600,000,000 Powerball jackpot, I did not bother to draw a comparison between the Rule Five draft and Powerball here mainly because the odds of winning the Powerball grand prize are close to one in 292,000,000. Too bad we aren’t all playing the Rule Five draft instead of Lotto 649, Lotto Max, and Powerball!