Every winter, Major League Baseball scour the free agent market to add to their rosters. But, have you ever wondered how free agency works in Major League Baseball? Here’s a look at how MLB free agency works, including the history of it and how players become eligible.

Contents

• What is a MLB free agent?
• How MLB players become eligible
• Do MLB teams receive compensation for departing free agents?
• History of MLB free agency
• International Free Agency Explained
• Minor League Free Agency Explained

What is a MLB free agent?

MLB free agents are players who don’t have a contract with an organzation and are eligible to sign with any team.

How MLB players become eligible

An MLB player can become a free agent in a number of different ways. However, the most well-known way is when a player reaches six full years of MLB service time and is no longer under contract with that organization.

Free agents are able to sign with any MLB club under terms agreed upon by the two parties.

Additionally, MLB players could be released into free agency. This typically happens when a team decides to move on from a player and either DFA’s the individual, non-tender, or outright release the player from the organization

Do MLB teams receive compensation for departing free agents?

Yes, MLB teams can receive compensation for a player given a qualifying offer by their respective team. Most qualifying offers are declined.

However, MLB qualifying offers are risky, thanks to the price. For example, the 2024 threshold for a qualifying offer was $21.05MM, up from $20.325MM. If it’s declined, then the team can reap the reward. But if it’s accepted, the club could be stuck with a player at a price it’s not comfortable with.

Thus, generally these offers are reserved for the upper echelon of free agents.

Lastly, the exact MLB Draft pick a team receives depending on several factors, including the club’s revenue-sharing status.

History of MLB free agency

For much of the 20th century, MLB players were unable to test free agency thanks to what was known as the “reserve clause.” The reserve clause gave teams the exclusive rights to negotiate with their own players, which prevented them from negotiating with other teams.

There had been a number of attempts to kill the clause, including in the late 1960s and early 1970s when former MLB player Curt Flood went to the U.S. Supreme Court and attempted to have the clause killed.

Ultimately, the Supreme Court sided with MLB and ruled that the reserve clause was immune to antitrust laws at both the state and federal levels.

Things changed shortly thereafter, as independent arbitrator Peter Seitz ruled in the 1970s that former pitchers Andy Messersmith and Dave McNally could become free agents after the two played a full season without signed contracts.

After that ruling, Marvin Miller of the MLBPA and the league negotiated a framework for free agency — and it looks similar to what it is today.

International Free Agency Explained

Professional players from Cuba, Japan, and Korea are also eligible for free agency.

Players from Korea and Japan without contracts can become MLB free agents once those individuals accrue nine years of service time in the Nippon Professional Baseball or Korean Baseball Organization and do not need to be posted.

As for Cuban-born players, any player 25 or older with six seasons in the Serie Nacional will be able to test the waters, as those individuals are considered professionals. Otherwise, that player is subject to the team’s amateur international signing pool.

Amateur international signings typically involve players signed from Latin American countries and are 16 years old or older. However, pro ball players from the KBO or a professional equivalent are typically subject to the pool if under the age of 25.

A case in point was in 2017 when Shohei Ohtani opted to head to North America before he turned 25.

Aside from this, amateur players from Latin America and other nations not bound by the MLB Draft are eligible to sign with teams upon turning 16 during the next eligible signing period. The international signing period for 16-year-olds typically starts on January 15 each season.

Minor League Free Agency Explained

Players under a Minor League contract may also become free agents in certain circumstances.

After a player under a Minor League contract has accrued six years of professional service time, is not under contract, and is not on the 40-man roster, that player becomes a free agent.

Article XX(D) of the MLB Collective Bargaining Agreement also outlines other options for when a player may be eligible for free agency:

• Any player that hit either “Super Two” or three years of MLB service as of the conclusion of the prior season may elect free agency if the contract is outrighted to a Minor League club.
• Any player who was assigned outright to a Minor League club for a second or subsequent time in their career may elect free agency.

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