Explaining 40-Man Roster, Rule 5 Draft and DFAs

Explaining the Rule 5 Draft
Any player who signed with their team at age 18 or less is eligible for the Rule 5 Draft after five seasons. Any player who signed with their team at the age of 19 or beyond is eligible for the Rule 5 Draft. After four or five years (depending on how old the player was when they signed) they either force their way onto the 40-man roster or another team has the option to draft them to their 40-man roster. This is for the benefit of the player who possesses desirable talent but may be blocked by a stacked organization.
A Rule 5 Draft pick goes straight to the 25-man roster. On top of that, the drafting club has to pay $100k to the player’s former club. If the new team decides to place the player on waivers and he clears, he must be offered back to the original team for $50k. For more information on the intricacies of the Minor League rights and other rules, check out mlb.com’s official page on the Rule 5 Draft.
So the main idea here is protecting players that other teams might be happy to take off of our hands. For instance, the Rays just added five players to the 40-man roster – including highly-touted prospect Vidal Brujan – in order to prevent other teams from whisking him away for $100,000.
It may seem difficult to imagine, but there have been some very big-named players that were acquired in Rule 5 Drafts. Sometimes a team has a promising player but no room on the roster to add him to the 40-man roster. If another team sees the potential in the player and is willing to add him to the 25-man roster right away, then it’s off to the Big-Leagues for that guy!