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First Draft lottery to award 12 extra selections Reporter @JonathanMayo
Now that Major League Baseball has gone through its first Draft and signing period under the new rules of the Collective Bargaining Agreement, it's time to move on to the next phase of the new system: the Competitive Balance Lottery.

The lottery, scheduled to take place Wednesday at 1:30 p.m. ET in New York, is a mechanism designed to help teams perceived to need the most assistance by awarding extra Draft picks to some of them. The 10 smallest-market teams and 10 lowest-revenue teams will have the chance to win one of six extra selections in the 2013 First-Year Player Draft.

Those half-dozen picks will be made at the conclusion of the first round, following the compensation selections. Because there is obvious crossover between those two groups, there are 13 teams entered into the first-round lottery: the D-backs, Orioles, Indians, Royals, A's, Pirates, Padres, Rays, Reds, Rockies, Marlins, Brewers and Cardinals. The odds of winning a Draft pick will be based on each team's winning percentage in the previous season.

There will be a second group of six picks, to be made after the conclusion of the second round. The teams from the first group that did not get one of the early picks will be re-entered, along with any other Major League team that receives revenue sharing. This year, only one team -- the Tigers -- will be added to the second lottery. The Competitive Balance Lottery winners and the order of their picks will be unveiled on MLB Network's "The Rundown" at 2:45 p.m. ET.

"[We just finished] off the first Draft with the new CBA," Pirates assistant general manager Greg Smith said. "No club, no scouting director, no scout had gone through that landscape [before]. The Competitive Balance picks will be the same thing. Clubs value Draft picks and the ability to have them, to add to them, even to trade them. As you try to acquire talent through the Draft or if you're trying to improve the big league club, then the picks become a part of that process."

Smith brought up one of the more intriguing aspects of this new process -- the picks that come out of it are commodities. For the first time in Major League history, Draft picks can be dealt. But there are a series of conditions and limitations regarding such transactions.

Only a team that wins a pick in the lottery can trade it, meaning that selection can be traded just once. It can't be sold for cash, and it may only be dealt during the season. Trading can commence the day after the lottery is held and is allowed until the end of that regular season. So seeing a lottery pick or two involved in some July 31 Trade Deadline deals is a possibility. They cannot be included in any Winter Meetings deals, however, with trading of picks again permitted at the beginning of the following regular season.

So the Pirates, or any team that might be involved in Deadline deals this month, can use a pick they receive in this lottery in their trade negotiations. How the picks are valued might vary from team to team, and trying to get a sense of their worth in an open market definitely falls under the "to be determined" category, but it does add something to the trading landscape.

"With us battling trying to stay on top, now in our efforts to improve the club, how do you factor [the picks] in? I think you do," Smith said. "It's going to be interesting because it's something that hasn't been there. There's potential for it to be a part of the overall dialogue as we get closer [to the Deadline]. It's a new twist.

"Some clubs value those differently. Some clubs might put a higher value on those types of picks than other teams, who might rather have a known player. But it adds to the intrigue."

The Pirates are one of eight teams known to be sending a representative to the Commissioner's Office for the lottery. Some of the teams are out of the race and might be more likely to hold the pick to add talent via next year's Draft. Smith admits that if the worst-case scenario is that the Pirates keep the pick for next year's Draft, there are worse situations to be in.

Indeed, the Pirates will be in good shape. They already know they'll have two first-round picks next year, one of them because they didn't sign their Stanford pitcher Mark Appel, their first-rounder this year.

"We'd be picking [No.] 9, [and] wherever we're picking based on our finish, so now we're looking at three potential picks in the top 45 or so," Smith said.

Jonathan Mayo is a reporter for Follow him on Twitter @JonathanMayo and Facebook, and listen to him on the weekly Pipeline Podcast.