Bonus rule

The bonus rule was a contractual rule affecting major league baseball intermittently between 1947 and 1964, meant to prevent teams from assigning certain players to farm teams. The rule stipulated that when a major-league team signed a player to a contract with a signing bonus above a certain threshold, the team was required to keep that player on their active roster. Any team that failed to comply with the rule lost the rights to that player's contract, and the player was then exposed to the waiver wire.

The rule was first instituted in 1947, removed in December 1950, and re-introduced in December 1952. As in force for the 1953 though 1957 seasons, a player subject to the rule had to be on the team's active roster for two full seasons, after which he could be assigned to a farm team without repercussions. The rule was again rescinded in 1958, but re-established for the 1962 major-league expansion, with different and more relaxed stipulations. It was finally abolished in 1965, when the Major League Baseball draft was initiated.

In the late 1930s and early 1940s, major league franchises found themselves bidding against one another for the services of young players. These engagements subsided when World War II broke out. When the war ended, the bidding wars resumed and resulted in skyrocketing signing bonuses. To counter this, in 1947, the major leagues implemented the bonus rule. The rule's purpose was to prevent the wealthiest teams from signing all of the best players and from stashing those players in their farm systems. Additionally, the bonus market was weakened as a result of inhibited competition. In return, this limited labor costs.

The legitimacy of the rule was challenged several times after it was initially implemented. In December 1950, the rule was rescinded. In December 1952, a committee chaired by Branch Rickey revived the rule. It was this iteration of the rule that stated a team had to place the players who met the bonus rule criteria on the major league roster immediately. Furthermore, the player had to remain on the roster for two years from the signing date.

Although players were signed as a result of their potential, many of them were not able to succeed. In an extreme case, pitcher Tom Qualters was on the active roster of the Philadelphia Phillies for all of 1953 and 1954, but pitched only one-third of an inning in one game of the 1953 season, and did not get into a game at all in 1954. Qualters did not appear in his second major league game until 1957, and never recorded a victory as a big league pitcher.

Incidents like the Clete Boyer trade (detail below) showed how the bonus rule could be circumvented. Rumor also spread that teams were ignoring the rule and bribing players. In 1958, both leagues voted to rescind the rule. In addition, they rescinded it retroactively. This eliminated the major league roster requirement for the players signed in 1957.

After the league added four new teams (the Angels and Senators, followed by the Colt .45s and Mets), the bonus rule was reintroduced for the 1962 season. The main difference between the new version of the rule and the previous one was that a player had to spend just one full season on the roster instead of two seasons. As approved in December 1961: "all [rookies] in the minors are draftable at $8,000. If brought to the major league roster, only one can be optioned to the minors. Others must pass through an irrevocable $8,000 waiver claim." Entering the 1963 season, National League teams had a total of 14 players subject to the bonus rule (led by the New York Mets with three), while American League teams had a total of 17 such players (led by the Chicago White Sox and Kansas City Athletics with three each).

The bonus rule was rescinded permanently in June 1965, with the introduction of the Major League Baseball draft.