Transactions primer

by Nick Richards

Rosters

Each MLB team has a 26-man roster, a 28-man roster, and a 40-man roster (each of which encompasses the smaller rosters). Only a player currently on the 26-man roster may play in a major league game. The 40-man roster includes the 7-day, 10-day and 15-day injured lists, bereavement and paternity lists, and some players currently on a minor league team. From September 1 through the end of the regular season, any player on the 28-man roster (and not on an injured list) may play in a major league game. This is what we refer to as the September call-up, the expanding of the eligible roster from the 26-man to the 28-man.

When a player not on the 40-man roster is summoned to the majors from the minor leagues, his contract is purchased from that minor league team. By adding him to the 40-man roster, it typically means another player must be released from the 40-man roster by either releasing or trading him.

Options

A player has a certain number of option years in which he may be moved between the major league and the minor leagues an unlimited number of times. If the player is on the 40-man roster but not the 26-man active roster, he can be moved freely between the major league club and the minor league club under the following rules:

  • Once a player has been put on the 40-man roster, that team has three option years on that player. An option year is considered used up when he spends at least 20 days in the minors in any of those three option years.

  • If the player has less than five full seasons of professional experience (major or minor), a team may have a fourth option year if:

    • That player spent a full season in a rookie or A level league.

    • That player did not spend at least 60 days on an active professional roster and at least 30 days on the IL in a season.

Once all player option years are used, a player is considered “out of options” and must be placed on waivers if sent down to the minor leagues. He also must clear waivers before this if it has been three years since the date of that player’s first appearance on a major-league roster.

A veteran of at least five years of major league service must give his consent before being assigned to a minor league team.

Waivers

Any player under contract can be waived by their team, that is, placed on waivers. Once a player is waived, any team may claim him. If more than one team claims, the team with the weakest record in the player’s league wins him. If no team in the player’s league claims him, the team with the weakest record in the other league wins him. During the first month of the season, standings are determined using the previous year’s records instead.

When a team claims a player from waivers, the waiving team has a choice:

  • Trade the player to the claiming team within two business days

  • Cancel the waive and keep the player on its major league roster

  • Do nothing and allow the claiming team to take over the player’s contract, pay a waiver fee to the waiving team, and that new team must place the player on its active major league roster

If a player is waived, claimed, and the waive is then canceled, that player may not be waived again that season or else a claiming team would get that player automatically and for nothing.

How do you know who is on the waiver wire? You probably don’t (unless someone talks to the press), until a transaction occurs.

Designated for assignment

If a player is designated for assignment, he is immediately removed from the 40-man roster. The team now has 7 days to:

  • Trade the player

  • Release the player

  • Put the player on waivers and, if he clears waivers, outright him to the minors

A player can be outrighted only once in his career without his consent.

Often a player is designated for assignment so the club can open up his roster spot while they're waiting for him to clear waivers, which can take four or five days.

Injured list

If a player is injured, he may be placed on one of the following injured lists:

7-Day: For concussions. Remains on the 40-man roster. If symptoms remain after 7 days, automatically moves to the 15-day IL.

10-Day: Position players. Remains on the 40-man roster. Can be moved to the 60-Day IL any time.

15-Day: Pitchers. Remains on the 40-man roster. Can be moved to the 60-Day IL any time.

60-Day: Removed from the 40-man roster. Becomes ineligible to play for 60 consecutive days.

A player may be placed on the 10-Day, 15-Day or 60-Day retroactively for a maximum of 15 inactive days, and may remain on either list for as long as required to recover.

Trades

Only players under contract can be traded. From the end of the previous World Series until the end of July, trades can be freely made. After July 31, trades cannot be made.

If a player is a 10 & 5 man (on an active major league roster for 10 full seasons and on one team for the last five), he may not be traded to another team without his consent. Obviously players with a no-trade clause in their contract also may not be traded without their consent.

Player to be named later

A player to be named later is an unnamed player (typically a minor leaguer) included as part of a trade when the teams cannot agree on a specific player or that player is not eligible to be traded at that moment. Teams have six months to finalize which player is included. The player named later cannot have played in the same league as the team he's being trade to. That's why the player named later is almost always a minor leaguer. Sometimes the team receiving the player will provide the other club a list of minor leaguers, and the club will have their pick of the players from that list. This list is negotiated at the time of the trade. Cash or other considerations may be exchanged in lieu of a player.

Rule 5 draft

Who is eligible to be chosen by any team in the offseason Rule 5 Draft? Players who:

  • are not on the 40-man roster (which is why you see teams put players on the 40-man roster if they wish to protect them from the Rule 5 Draft)

  • spent four years with a minor league contract and originally signed when 19 or older, OR

  • spent five years with a minor league contract and originally signed when under 19

Players chosen in the Rule 5 Draft must be kept on the selecting team’s 26-man roster for the entire season after the draft. If the new team waives the player, and if they clear waivers (no team puts in a claim), that player must be offered back to the original team. But once a Rule 5 draftee spends an entire season on his new team’s 26-man roster, his status reverts to normal. And the draftee must be active for at least 90 days, so the new team cannot hide him on the injured list all year.

A Rule 5 draftee in his initial year may be traded to a new team, but the restrictions transfer to that new team.

Free agency

When a player’s contract ends, he is a free agent. But he may not become a free agent until EITHER of the following criteria is true:

  • He has at least six years of service time on a 26-man roster or IL

  • His contract expired with less than six years of service time, but is not tendered a contract or salary arbitration by the tender deadline. This makes the player a non-tender free agent.

Arbitration process

The player and the player’s team both submit a salary offer for a new contract. An arbitrator chooses one offer or the other based on which offer is closest to the salaries of players with similar ability and service time. For salary arbitration and free agency purposes, a players acquires a year of service time if the player remains on the major league roster for at least 172 days of the 182-day season.

 
Salary arbitration

A player with less than six years of service time is eligible for salary arbitration if he meets ALL of the following criteria:

  • He has no contract for the next season

  • He has been tendered a contract offer by the tender deadline by his current team

  • He has not agreed on the terms of the new contract

  • He has been on a major league roster (or IL) for a least three years OR is a Super-Two Exception (see below)

Super two exceptions

Super Two exceptions are players who meet ALL of the following criteria:

  • They have at least two years of major league service and less than three years
  • They were among the top 22% for cumulative playing time in the majors in this class of players
  • They were on an active major league roster for at least 86 days in the previous season

Super Two exceptions are eligible for arbitration even though they have less than three years of experience on a major league roster.  That's why it's called an exception.