Minor League Contracts

Here’s part that is closest to your questions, but the entire thing is a good read.

Obviously, there are advantages for a team placing a player on the 40-man roster. If the player has less than six years of major league service, the team has control over that player until he reaches six years. All teams, especially those in small markets, take advantage of this mechanism for keeping their young players around cheaply. Likewise, players also benefit from being added to a 40-man roster. Not only does a player have to be put onto the 40-man roster to make the majors, but being added makes it easier for players to eventually achieve free agency. It also makes it a little harder to be booted off the 40-man roster (more on that later). Thus, both players and teams benefit from the 40-man roster system. So the question now is: how are players added to the 40-man roster?

Not all top prospects take four or five years to make it to the majors, however. Ryan Braun took just under two years from the time he was drafted until his major league debut. Rickie Weeks made his major league debut just months after he was drafted. So how are these guys put on the roster? In Weeks’ case, he signed a Major League contract after being drafted, meaning he was put on the 40-man roster as soon as he signed. He was special, however, and the overwhelming majority of draftees sign Minor League contracts, making them members of an MLB organization but not on the 40-man roster. If a team wishes to promote a player signed to a minor league contract to the majors, they first purchase his contract from his minor league team. Now that all minor league teams are affiliated with the majors, I’m not sure if any money exchanges hands anymore, but the term comes from years ago when minor league teams operated independently from major league clubs and thus demanded compensation for letting go of their best players. When Mat Gamel was called up to Milwaukee on September 1 last season, his contract was purchased from Nashville.

link: The 40-Man Roster: How Does It Work? by TheJay

is counted in major league service days, not 40-man roster days. So a player might be added to the 40-man roster, like Webb at the end of last year to protect him from the Rule 5 draft, but he’s not accruing major league service time toward free agency.

Let’s say for example that Ryan Webb stays in the minors for all of this year and part of the next, but finally sticks in the majors for good as a 24-25 year old at the beginning of the 2011 season. The A’s six years of “club control” that you’re referring to would begin then, since he’s finally accruing major league service time…even though the A’s have technically been controlling him since he was drafted out of high school in 2004.

If Webb stuck in the big leagues from the beginning of 2011 on, he’d become a free agent after the 2016 season.

This illustrates why free agency is such a big deal. For a guy like Webb, it would be the first time he got to pick his employer after about 12 years of working for the same one!