BASEBALL / DAILY REPORT : AROUND THE MAJOR LEAGUES : New Draft Rule Is Overturned

Baseball’s new amateur draft rule--aimed at controlling signing bonuses--was overturned Friday by arbitrator George Nicolau, acting on a grievance filed by the Major League Players Assn., which will pursue financial damages.

The major provision of the new rule, enacted by the major league owners and in place for the latest June draft, enabled a club to retain signing rights to a drafted player for five years, rather than one, removing much of the player’s bargaining leverage.

It also created concern among college coaches because it permitted players to drop out of school at any time to become eligible for the draft.

Under the previous rule, which Nicolau reinstated, any player in a four-year college could be drafted only after his junior year, or when he was 21.

Nicolau did not issue an opinion, but agreed with the union contention that the draft is subject to collective bargaining and that the new terms were inconsistent with the compensation system agreed to in the last bargaining contract.

Gene Orza, the union’s associate counsel, compared the remedy to collusion and said, “The clubs knew they were creating a mess when they implemented the rule and will have to pay for it.”

Since it is unlikely that the NCAA would restore college eligibility for players who were drafted in June and signed under the provisions of the new rule, Orza said the union will probably pursue financial damages on their behalf.

It is unclear, he said, what will happen with drafted players who have not signed. They could become free agents or simply fall under the terms of the old rule, meaning that the drafting club would hold their rights for one year rather than five.

The Dodgers are not worried about losing any of their newly signed high draft picks, including high school graduates Ryan Luzinski and David Spykstra. Club vice president Fred Claire said that “most” of their top choices signed waivers preventing them from taking action against the Dodgers if the draft rule was overturned.