I posted something this morning in response to a question in a thread, "why is Franklyn German being DFA'd?" and after I posted in search for a more definitive answer to my own question about how player options work I found this web page that I thought might be of use to people out there.

 

It deals with several subjects as you'll see below and I hope brings some clarity to moves GMs sometime make that on the surface seem strange or baffling certainly to me and suspect others.

 

http://espn.go.com/mlb/s/transanctionsprimer.html

 

Transactions Primer

By Rob Neyer

 

General managers don't know them, agents don't know them, players don't know them, writers don't know them . and fans don't know them.

 

What are "them"? Them are the rules governing baseball transactions, some of which are so convoluted that even when you think you know them, you don't.

 

All the ins and outs of transactions are covered, sometimes in excruciating detail, in a large loose-leaf binder titled, "The Official Professional Baseball Rules Book," something completely separate from the "Official Baseball Rules" (which cover only the game on the field).

 

Unfortunately, Major League Baseball doesn't make that loose-leaf binder available to the public. There's not really anything controversial or confidential in there, so maybe they just think we don't care and/or wouldn't understand the arcana contained within. And of course, MLB isn't famous for its public-relations acumen.

 

So we've consulted a variety of sources, including that elusive "Rules Book," and come up with a "Transactions Primer" which should answer at least some of your questions

 

Disabled Lists

There are two Disabled Lists, the 15-day and 60-day. The only real difference between them is that players on the 60-day DL -- sometimes called the Emergency DL -- don't count against a team's 40-man roster.

 

To be placed on either Disabled List, a player must be certified disabled by a doctor. That said, such certifications generally aren't particularly difficult to acquire.

 

Players can be disabled retroactively, up to a maximum of 10 days, beginning with the day after the last day on which they played.

 

A player on the 15-day Disabled List may be shifted to the 60-day DL at any time.

 

According to the Rules, players on a Disabled List "may be assigned to a Minor League Club for the purpose of injury rehabilitation for a maximum of 20 days in the case of non-pitchers and 30 days in the case of pitchers."

 

"Options"

After three years as a pro, a player must be protected on a team's 40-man roster, or he is eligible for the Rule 5 draft (more on that later). Once he's served those three years, and assuming he is added to the 40-man roster, his club then has what are called "options" on him.

 

When a player is on the 40-man roster but not on the 25-man Major League roster, he is on "optional assignment." One common misconception about the rules is that a player may only be "optioned out" three times. Actually, each player has three option years, and he can be sent up and down as many times as the club chooses within those three seasons.

 

When you hear that a player is "out of options," that means he's been on the 40-man roster during three different seasons, beginning with his fourth as a pro, and to be sent down again he'll have to clear waivers (more on those below).

 

Waivers

Waivers just might be the most complicated single aspect of the rules. In the rule book, a waiver is defined as "... a permission granted for certain assignments of player contracts or for the unconditional release of a Major League player ..."

 

If a player placed on Major League waivers is not claimed by another team during the three business days after waivers have been requested, then the players is said to have "cleared waivers," and the team has secured waivers for the remainder of the waiver period.

 

And what does that mean? Essentially, the team can do with the player's contract as it pleases. This generally means one of three things:

 

(1) They can send him to the minors (subject to his consent, if he's a "Veteran Player," more on that below).

 

(2) They can release him, which makes the player a free agent and thus available to sign with any team.

 

(3) They can trade him to another team, even if the so-called "trading deadline" has passed. Any trades made after July 31 may only involve players who have cleared waivers.

 

If a player doesn't clear waivers -- in other words, if he's claimed by another team or teams -- the club requesting waivers may withdraw the waiver request.

 

If the club doesn't withdraw the waiver request, the player's contract is assigned in the following manner:

 

(A) If only one claim is entered, the player's contract is assigned to that claiming club. (B) If more than one club in the same league makes claims, the club currently lower in the standings gets the player.

 

If clubs in both leagues claim the player, preference shall always go to the club in the same league as the club requesting waivers.

There are other, more esoteric rules involved here. For example, during the first 30 days of the season, the previous season's final standings are used to determine claim order, rather than the current standings.

 

Designated for Assignment

You'll sometimes read that a player has been "designated for assignment."

 

What does this mean? Essentially, it allows a club to open up a roster spot while it figures out what it's going to do with a player. As we'll see below, there are certain situations in which a team needs a player's permission to either trade him or send him to the minors. So rather than force the player to make a quick decision, the team can simply designate him for assignment while he decides.

 

More commonly, 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. Occasionally, a club will designate a player for assignment while they're trying to trade him. That's what happened to Hideo Nomo this past June.

 

"Called Up" vs. "Contract Purchased"

When a player is summoned from the minors to the majors, you'll see that he was either "called up" or his "contract was purchased." For most practical purposes, this really doesn't make much difference. If he's already on the 40-man roster, he's called up. If he's not on the 40-man roster, then his contract is purchased (for a nominal fee) from the minor-league team.

 

However, the player must be added to the 40-man roster when his contract is purchased, which often necessitates dropping another player from the 40-man roster, whether by release or trade.

 

"Veteran Players"

Any player who has been in the major leagues for five full seasons may not be assigned to a minor-league team without his written consent. This sometimes puts the team in a bad position, because a player with five years has every right to say, "I don't want to go to New Orleans. You can either release me and keep paying me, or keep me on the major league roster and keep paying. Your choice."

 

Also, a player with five years of service time who is traded in the middle of a multi-year contract may demand another trade prior to the start of the season following the one in which he was traded.

 

Any player with at least 10 years of Major League service, the last five of which have been with one Major League Club, may not be traded to another Major League Club without his written consent. This is commonly known as "the five-and-ten rule."

 

Player To Be Named Later

Quite often, you'll read that a player has been traded to another team for "a player to be named later."

 

There are two restrictions at work here. First, the transaction must be completed within six months. And second, the player named later can't have played in the same league as the team he's being traded to. That's why the player named later is almost always a minor leaguer.

 

And what if the teams can't agree on who that player will be? This happens rarely, but if no names are agreed upon initially, the clubs will agree on a price to paid in lieu of a player.

 

Sometimes, at the time of the deal the team receiving the player will provide the other club a list of minor leaguers, and later the club will have their pick of the players on that list. This list is negotiated at the time of the trade. In recent years, the Minnesota Twins lost Enrique Wilson this way. When it came time for Cleveland to make their choice, the Twins did what they could to "hide" Wilson, but the Indians found him anyway.

 

Finally, sometimes "Player to be named later" is used to trade players on the Disabled List, since it can be embarrassing for a club to trade for a guy who's on the DL.

 

The Rule 5 draft

 

 

First off, note that it's not the "Rule V Draft," but the Rule 5 draft. It's called the Rule 5 draft because the section of the Official Rules that covers the draft just happens to be Rule 5 in the book.

 

Eligibility: A player not on a team's Major League 40-man roster is eligible for the Rule 5 draft if: the player was 18 or younger when he first signed a pro contract and this is the fourth Rule 5 draft since he signed, OR if he was 19 or older when he first signed a pro contract and this is the third Rule 5 draft since he signed.

 

A player drafted onto a Major League roster in the Rule 5 draft must remain in the majors (on the 25-man active roster or the DL) for all of the subsequent season, or the drafting club must attempt to return him to his original club. However, since a returned Rule 5 player must first be placed on outright waivers, a third club could claim the player off waivers. But of course, that club would then also have to keep him in the majors all season, or offer him back to his original club.

 

Occasionally, the drafting club will work out a trade with the player's original team, allowing the drafting club to retain the player but send him to the minors.

thanks for the tutoring lesson....very much appreciated now i know what they talking about

Thanks for the info :thumbup .

i'm too lazy to read all that. anyone wanna summarize it?

I thought the most frequently asked question was "Why German?" and not someone with less talent, with options or less likelihood of being claimed on waivers.

I dont think German will be claimed, he averages over 9BB per 9IP but I doubt he will accept the assignment therefore, making him a FA.

I don't understand what rule 5 means still. so if we send uggla to the minors that means he becomes a free agent and then he can go to the yankees or whoever he wants? why would we want to do that? he is hitting good why would we not trade him for pitchers or something that we need like a CATCHER?

I don't understand what rule 5 means still. so if we send uggla to the minors that means he becomes a free agent and then he can go to the yankees or whoever he wants? why would we want to do that? he is hitting good why would we not trade him for pitchers or something that we need like a CATCHER?

 

Maybe I missed it, but where does it say we would send Dan Uggla to the minors?

I don't understand what rule 5 means still. so if we send uggla to the minors that means he becomes a free agent and then he can go to the yankees or whoever he wants? why would we want to do that? he is hitting good why would we not trade him for pitchers or something that we need like a CATCHER?

 

He doesn't become a free agent. Either a team keeps him on their major league roster or allows another team the same opportunity. He doesn't get to determine that. The teams do. And if there are multiple claims on him through waivers, he is assigned to the team with the lowest winning percentage. If a team were to send him to the minors, they must offer him back to his original team before doing so.

Thanks for going to the trouble of finding that and posting it. Pretty informative stuff.

Too many strict rules. This mean some teams are scr*w with some players.

Sorry I'm a little late, but I wanted to thank Mr. 2003 for posting this; it taught me a few things I didn't know or wasn't clear about. :thumbup

Fantastic post, thanks for the information. I'm sure it helped most if not all of the readers here understand everything a bit more.

I don't understand what rule 5 means still. so if we send uggla to the minors that means he becomes a free agent and then he can go to the yankees or whoever he wants? why would we want to do that? he is hitting good why would we not trade him for pitchers or something that we need like a CATCHER?

 

He doesn't become a free agent. Either a team keeps him on their major league roster or allows another team the same opportunity. He doesn't get to determine that. The teams do. And if there are multiple claims on him through waivers, he is assigned to the team with the lowest winning percentage. If a team were to send him to the minors, they must offer him back to his original team before doing so.

If the Marlins do not keep Uggla on the 25 man roster (active roster), then he must be offered back to his original team for half the price that he was purchased (25k I think)

 

Also, one thing that wasn't discussed here is arbitration. I think that's pretty relevant to this thread.

 

And 2003, thanks!

I don't understand what rule 5 means still. so if we send uggla to the minors that means he becomes a free agent and then he can go to the yankees or whoever he wants? why would we want to do that? he is hitting good why would we not trade him for pitchers or something that we need like a CATCHER?

 

He doesn't become a free agent. Either a team keeps him on their major league roster or allows another team the same opportunity. He doesn't get to determine that. The teams do. And if there are multiple claims on him through waivers, he is assigned to the team with the lowest winning percentage. If a team were to send him to the minors, they must offer him back to his original team before doing so.

If the Marlins do not keep Uggla on the 25 man roster (active roster), then he must be offered back to his original team for half the price that he was purchased (25k I think)

 

Also, one thing that wasn't discussed here is arbitration. I think that's pretty relevant to this thread.

 

And 2003, thanks!

 

I believe it's actually has to be the equivalent of time at the major league level.

 

In the 2004 Rule 5, my Sox took Adam Stern from the Braves. In 2005, Stern spent some time on the DL which did not count as time on the 25 man roster. He did spend some time with the PawSox on rehab, but was back with the Red Sox as soon as he was eligible to come off the DL. The time he was on the DL was carried over to this season and in late April, Stern was then optioned to Pawtucket when his Rule 5 restrictions were finally ended.

Thanks for the info 2003, very informative. Here is other info relevant to this thread that could also help.

 

Salaries and Arbitration

 

A player may not make less than the league minimum of $200,000.

 

Players with one or two years of service time and players between two and three years of service time (except for the 17% with the most service time) can have their contracts renewed automatically by the team if they cannot come to an agreement. When renewing a contract, a team cannot reduce a player's pay by more than 20% from the prior year or 30% from the year before that.

 

Players with 3, 4, or 5 years of service time and the top 17% of the 2 year players may opt for arbitration in order to come to a contract.

 

The club' proposal may not be less than 80% of the player's salary the previous year. The exception here is that if a player won an arbitration award the prior year that resulted in a 50% or greater salary increase, there is no maximum paycut allowed in the proposal.

 

Arguments that are not allowed in an arbitration hearing include the state of the team's finances, previous offers made during salary negotiations between the player and the team, any press comments or testimonials with the exception of media-supported awards like the MVP Award or salaries in other sports or occupations.

 

A player with a non-guaranteed contract or an arbitration award may be released up until the 15th day of spring training with 30 days' pay or from the 16th day of spring training until the opening of the season with 45 days' pay.

 

When a player is claimed on waivers, the new team takes on the contract. When a player is released in the middle of a guaranteed contract, the new team only has to pay league minimum with the old team footing the rest of the bill.

 

Free Agency and Compensation

 

A player that has accrued 6 complete years or more of service time at the end of a season and does not have a contract is eligible for filing for free agency, after which the player can sign with any team he wants.

 

To receive compensation for a player that signs with another team, the team must offer the player salary arbitration.

 

The team must offer salary arbitration to the player by December 7 or will not be allowed to negotiate with or sign the player until the following May 1. After arbitration is offered, the player has until December 19 to either accept or refuse salary arbitration. If it is refused, the player can only negotiate with the club until January 7th, after which no more negotiation can take place until May 1.

 

The compensation formula is based off a negotiated formula, heavy on triple crown stats, for the previous 2 seasons. Type A players are those that rank in the top 30% of his position. Type B players are those that rank below top 30% but still in the top 50%. Type C players are those that rank in the top 60% but not the top 50%.

 

A type players fetch the 1st-round draft pick of teams in the top half of W-L record or a 2nd-round draft pick of teams in the bottom half of W-L record and an additional pick between the 1st and 2nd rounds. B types don't get the sandwich pick and C type players fetch a sandwich between the 2nd and 3rd rounds. The higher the player's ranking in the compensation formula, the higher priority the old team gets in acquiring draft picks.

 

Something that's never mentioned is that there are still limits to the type of free agents that teams may sign.

 

If there are 14 or less type A and B players available, no team may sign more than 1 type A or B player. If there are 15-38 available A and B players, no team may sign more than 2. From 39-62 this becomes 3. The club quota increases accordingly for higher totals of available free agents. There is no maximum allowed for type C free agents. Lastly, a team can sign up to as many type A and B free agents as they've lost, regardless of the above quota.

 

Major League free agents come with an automatic no-trade clause until after the next June 15.