If it seems you heard more than ever about Draft-pick compensation for free agents this winter, well, it might be because you did. New rules governing Major League Baseball free agency and the First-Year Player Draft resulted in a new set of dynamics as clubs weighed the costs of signing players.
Kyle Lohse, one of the top free agents on the market this winter, remains unsigned with Spring Training under way. Michael Bourn, one of the top hitters, agreed to a deal on Monday. It's not all that unusual for some big-name players to be unsigned after the new year begins, but mid-February is another matter. And it's worth noting that both Bourn and Lohse, as well as Rafael Soriano, who also waited quite a while to sign, have had Draft-pick compensation attached to them in the first year of a new system.
In past years, the system was similar to what it is now, but not identical. Free agents were designated as Type A, Type B, or no-compensation (prior to the 2006-07 offseason, there was also a Type C). For Type A and Type B free agents, a club had the option of offering salary arbitration. If the player accepted arbitration, it was tantamount to agreeing to a one-year contract, with the salary to be determined.
If the player declined arbitration, he stayed on the market, with the former team receiving compensation if he signed elsewhere. A team losing a Type A free agent received two Draft picks -- one from the signing team and one in a compensatory "sandwich" round. A team losing a Type B free agent gained only a sandwich pick, with the signing team not losing a selection. Last winter featured a modified, transition system in between the old system and the new one.