Free agent classes

From Wiki Gonzalez

Free agent classes are divisions in which MLB free agents are put into. These divisions are used to determine what pick in the amateur draft the team losing the free agent will receive as compensation.

There are three classes of free agents:

• Type A: Top 30% of his position, as determined by Elias Sports Bureau rankings over the last two years.
• Type B: Top 31-50% of his position.
• Type C: Bottom 50% of his position.

Signing a Type A free agent requires you to surrender your first round pick plus a supplemental first round pick to the free agent's former team.

Signing a Type B free agent requires you to surrender your first round pick to the free agent's former team.

Signing a Type C free agent requires you to surrender a supplemental second round pick to the free agent's former team.

Cool general managers have been known to make in-season trades with this system in mind. For example, in mid-2002 Billy Beane acquired White Sox 2B Ray Durham for a minor-league pitcher in order to fill the team's hole at second. Knowing that Durham would not re-sign after the season because of the Athletics payroll constraints, Beane still wanted the two draft picks when Durham left the team.

The system was at risk during the 2002 labor negotiations when owners and players apparently agreed to abolish it. (From the players' POV, compensation picks can reduce player mobility and/or money offers, as some teams don't want to give up a pick to sign a player.) After a looming strike had been averted and the smoke had cleared, somehow it was discovered that the free agent compensation clauses hadn't been eliminated from the Basic Agreement after all.

Beane had lucked out (or been smart) in trading for Durham. He ended up getting those two picks as compensation when Durham signed with the Giants for 2003.