Transactions Glossary
Sources
- 2003-2006 Basic Agreement
- "Death, Taxes and Major League Waivers," by Keith Law, BaseballAnalysts.com
- “Know your waiver rules,” by Jayson Stark, ESPN.com
- “MLB, MLBPA reach five-year labor accord,” MLB.com press release
- “New Agreement Includes Draft, Rule 5 Changes,” by Alan Schwarz, Baseball America
- “New CBA overview,” by Keith Law, ESPN.com
- “The BP Guide to Transaction Rules,” by Thomas Gorman, Baseball Prospectus
- “Transaction Hornbook,” by Jamey Newberg, The Newberg Report, 2006 Bound Edition
- “Transactions Primer,” by Rob Neyer, ESPN.com
Arbitration
A player and club who cannot agree on a contract may agree to salary arbitration, provided the player has enough Major League service time. CBA, Article VI F.
Eligibility
The following players are eligible for arbitration:
- Players with at least 3 but less than 6 years of Major League service time.
- The top 17 percent of players with at least 2 but less than 3 years of Major League service. (See Super 2). To qualify as a Super 2, a player must have accumulated at least 86 days of service in the previous year. (A year of service is 172 days. The historical cutoff point for Super 2 status is 2 years, 128 days of service, though the requirement has been as high as 2 years, 140 days.)
- Players who have filed for free agency and both received and accepted offers of arbitration from their former club.
- A club must offer contracts to players under its control by December 12.
- If a player has filed for free agency, his former club must offer him arbitration by December 1. If the player accepts by December 7, he becomes club property again, returns to the roster, and the two sides may continue to negotiate or go to an arbitration hearing. If the player declines, the sides may continue to negotiate. (A club offering arbitration to a player who has filed for free agency retains the right to draft-pick compensation if he signs elsewhere. The club forfeits compensation if it does not offer arbitration. See Free Agent Compensation.)
- The club's salary offer to a player under its control (pre-free agency players) may not be less than 80% of the player's salary and performance bonuses the previous year or less than 70% of his salary and performance bonuses from 2 years earlier. (Exception: If a player won an arbitration award the previous year increasing his salary 50% or more, the 80% requirement does not apply.) The 80% rule does not apply to free agents who are offered arbitration.
- In January, the player and the club each submit a salary figure for arbitration. The parties may continue to negotiate until the case goes before a three-person panel of professional arbitrators between Feb. 1-20.
- At the hearing, each party has one hour to argue its case and 30 minutes for rebuttal. The player is required to attend and generally represented by an agent. A club executive or attorney usually represents the club.
- Criteria the panel may consider include the player’s contribution to the club in terms of performance and leadership, the club’s record and attendance, “special accomplishments,” the salaries of comparable players in his service-time class and, for players with less than 5 years of service, the class one year ahead of him. The parties may not refer to team finances, previous offers made during negotiations, comments from the press or salaries in other sports or occupations.
- The panel, without opinion, awards the player a one-year, non-guaranteed contract at one salary or the other. If the player is cut before the 16th day before the season begins (March 14, 2007), he is entitled only to 30 days’ termination pay. If the player is cut during spring training but after the 16th day before the season begins (between March 15 and March 31, 2007), he is entitled only to 45 days’ termination pay.
Bereavement List
A club may place a player experiencing a family emergency or the death of a loved one on the bereavement list with permission from the commissioner’s office. The player may spend between three and seven days on the list, and during that period, his club may replace him on the active 25-man roster. A player on the bereavement list continues to accumulate Major League service time.
The bereavement list was instituted on a temporary basis for the 2003 season, and the seven-day leave made permanent in April, 2004. The list of relatives whose death would entitle a player to take leave has been extended to in-laws. A club may not use the bereavement list to replace a player who leaves his club for the birth of a child.
Designated for Assignment (DFA)
A player designated for assignment is removed from his club’s 40-man roster and, within the next 10 days, traded, released or, if he clears waivers, assigned to the minor leagues. A club may not designate a player for assignment if the corresponding transaction is to recall a player on optional assignment.
- A player designated for assignment may be traded. A club interested in acquiring a player who has been designated for assignment may try to work out a trade before the player is placed on waivers, eliminating the possibility he might be claimed by a club with a higher waiver claim priority.
- A player designated for assignment who clears waivers and is not traded may be released. The player then becomes a free agent.
- A club wishing to send a player designated for assignment to the minor leagues must first place him on irrevocable outright waivers, making him available to the other 29 clubs in reverse order of won-lost record.
- If the player is claimed, he is lost to the claiming team for $20,000. (Irrevocable waivers may not be reversed.) The claiming team pays the player the major-league minimum salary for the rest of the season, and the original club is responsible for the balance of his contract.
- If the player is not claimed (clears waivers), the club may option him or assign him outright to the minor leagues, though he must continue to be paid according to the terms of his contract. A player may be assigned outright to the minors only once in his career without his permission. Thereafter, he may either 1) reject the assignment and become a free agent, or 2) accept the assignment and become a free agent at the end of the season if he’s not back on the 40-man roster. Additionally, player with 3 years of major league service may refuse an outright assignment and choose to become a free agent, regardless of whether he has been sent outright to the minors previously. A player with 5 years of major league service time who refuses an outright assignment is entitled to the money due according to the terms of his contract.
Disabled List
A club may place an injured player on the 15- or 60-day disabled list by submitting to the commissioner’s office an application, accompanied by a diagnosis from the club physician. A player on either list continues to accumulate Major League service time, but he must remain inactive for a minimum of 15 or 60 days, with Day 1 beginning after the player’s last game appearance. A club may make the placement of a player on either list retroactive to the last date on which he played, up to a maximum backdating of 10 days. A club may send a player on the DL to the minor leagues for a rehab assignment lasting a maximum of 20 days for position players and 30 days for pitchers.
15-Day Disabled List
- A player on the 15-day disabled list does not count against the 25-man active roster but continues to count against the 40-man roster. There is no limit to the number of players a club may put on the 15-day disabled list. A player may be activated beginning Day 16, though the club is not required to reinstate him at any specific time.
- A player may be transferred from the 15-day list to the 60-day list, but the opposite is not permitted. If a player is transferred, his time on the 15-day list is credited toward the minimum stay on the 60-day list.
60-Day (Emergency) Disabled List
- A player on the 60-day disabled list does not count against either the 25-man or 40-man roster. A player may be activated beginning Day 61, though the club is not required to reinstate him at any specific time. A player placed on the 60-day list after August 1 remains there for the rest of the season.
- There is no limit to the number of players a club may put on the 60-day list, but a player may not be placed on (or transferred to) the 60-day list unless the club’s 40-man roster is full. Once the season ends, a player on the 60-day disabled list must be reinstated to the 40-man roster or designated for assignment.
First Year Player Draft (Amateur Rule 4 Draft)
MLB holds its First Year Player Draft in early June. The 30 clubs select players in reverse order of won-lost records from the previous season. If two or more clubs finished with identical records in the previous season, the earlier draft pick is awarded to the team that finished with the worst record two seasons ago. Additionally, the draft order may be altered if a club receives an additional draft pick (or picks) as compensation 1) for losing a free agent to another club or 2) for failing to sign a player selected in the previous year’s draft.
The draft runs no longer than 50 rounds. Each club may select only one player for each of its major league, AAA and AA rosters but is not limited to the number of picks for the A level. (Choices no longer alternate between leagues, as they did before MLB ended the practice after the 2004 draft.) Clubs are not permitted to trade a draft pick.
Eligibility
The following are eligible to be selected in the First Year Player Draft (MLR 4):
- Residents of the U.S., Canada, Puerto Rico and any other U.S. territories who have not previously signed minor- or major-league contracts.
- Non-residents attending high school or college in the United States.
- Previous draftees who did not sign contracts, chose to enroll in four-year colleges and subsequently completed their junior year in college or turned 21 years old.
- All other foreign-born players are ineligible. (See International Players.)
- Clubs must offer each draft pick a minor-league contract within 15 days after he is selected.
- A club holds exclusive negotiating rights with a drafted player until August 15, except for college seniors, who may sign at any time.
- Once a player drafted has signed with the club, he cannot be traded until an entire year has elapsed (Incaviglia Rule).
Failure to Sign
- A drafted player who does not sign and attends a four-year college is not eligible for the draft again until he completes his junior year of college or turns 21 years old.
- A drafted player who does not sign and does not attend class at a four-year college is eligible for the next First Year Player Draft. However, a club may not draft a player in two consecutive drafts without the player’s written consent.
- If a team does not sign its pick in the first two rounds (including the supplemental round between the two), it receives a compensatory selection in the following year's Rule 4 Draft that is one pick after the slot of the player who did not sign.
- If a team does not sign its third-round selection, it receives a compensatory selection in a new supplemental round between the third and fourth rounds in the following year's draft.
Free Agency
Eligibility
A player with at least 6 years of Major League service time and no contract for the next season is eligible to file for free agency and negotiate with any club.
Filing period
- A player has 15 days from the first day after the World Series ends to file for free agency.
- His former club retains exclusive negotiating rights until 15-day filing period expires, and the former club may re-sign the player at any time, during or after the filing period. During the filing period, a player who has filed for free agency may engage in general discussions with other clubs but may not discuss contract details or sign with them.
- A club receives compensation if it loses a free agent before December 2. See Free Agent Compensation.
- By December 1, each club must decide whether to offer salary arbitration to their former players who have filed for free agency. A club not offering arbitration may continue to negotiate with the player but does not receive compensation if he signs with another club.
- By December 7, player must accept or reject the arbitration offer. If the player accepts the offer, he returns to his club’s 40-man roster. The player and club may continue to negotiate before the February arbitration hearing. See Arbitration. If the player rejects the offer, he may continue to negotiate with any of the 30 clubs.
- A free agent who signs a major-league contract may not be traded without his written consent before June 15 of the following season.
- If 0-14 players file for free agency under Article XX (B) of the Collective Bargaining Agreement, no team may sign more than 1 Type A or B player.
- If 15-38 players file for free agency, no team may sign more than 2.
- If 39-62 players file for free agency, no team may sign more than 3, with the limits increasing accordingly for higher totals.
- A club may sign an unlimited number of free agents who do not qualify as Type A or B free agents.
- A club may sign as many type A and B free agents as it has lost, regardless of the limits above.
Free Agent Compensation
A club may receive draft-pick compensation if it loses a free agent if:
- the player signs with another club before December 2, or
- the club offered arbitration to the free agent but failed to re-sign him.
- Type A players:
- Those who rank in the top 20 percent at their position. (Before the 2007-08 off-season, the Type A pool consisted of players ranking in the top 30 percent at their position.)
- Compensation for a Type A player is the signing club’s first-round draft pick and a supplemental pick between the first and second rounds.
- Type B players:
- Those who rank between 21 and 40 percent. (Before the 2007-08 off-season, the Type B pool consisted of players ranking between the top 31 and 50 percent at their position.)
- Compensation for a Type B player is a supplemental pick between the first and second rounds.
- If the signing club’s first-round draft pick falls in the upper half of the first round, that choice is protected and the signing club loses its second-round selection instead.
- If a club signs multiple free agents within the same category, its earlier pick goes to the team that lost the higher-rated player.
International Players
International players generally must be signed either as free agents or through the posting system for Japanese players. However, two groups of international players are eligible for the First Year Player Draft: 1) Canadian players, and 2) non-residents who attend high school or college in the United States.
Foreign-born players from the Dominican Republic, Venezuala, Mexico, Panama, South Korea, Taiwan, Australia and other countries are free agents. They may sign with any of the 30 Major League clubs during the international signing period, which runs from July 2 to August 31. To be eligible to sign a contract, a player must be 16 years old at the time of signing and turn 17 years old by either 1) September 1 or 2) the end of his first professional season, whichever is later.
Japanese high school players are subject to the Japan League draft and may not sign with U.S. clubs. Japanese League players may not become free agents until they have 10 years of service. Players who want to play in the Major Leagues before qualifying for free agency must go through the “posting process,” a system that allows a Japanese club to solicit bids from Major League clubs for negotiating rights with the player.
A Japanese club first must “post” the player for bidding between November 1 and March 1. Interested Major League clubs then have four business days to submit blind bids, and the Japanese club then has four business days to accept or reject the high bid. The high bidder wins exclusive rights to negotiate with the player for the next 30 days. If the player signs, the Japanese team receives the posting bid. If the player does not sign, the bid money is refunded to the Major League club, and the player may not be posted again for a year.
Maximum Salary Reduction
In tendering a contract to a player (or renewing the contract of a player not yet arbitration-eligible), a club’s salary offer may not be less than 80% of the player’s salary and performance bonuses the previous year or less than 70% of his salary and performance bonuses from two years earlier.
The 80% requirement does not apply if a player won an arbitration award the previous year increasing his salary 50% or more.
For split contracts (paying a player one rate when he is in the Major Leagues and a lesser rate when he is in the minors), the maximum cut rule is 60% of the player’s salary from the previous season.
Minimum Salary
Major League minimum salary
- 2011: $400,000, plus cost-of-living increase
- 2010: $400,000
- 2009: $400,000
- 2008: $390,000
- 2007: $380,000
- 2006: $327,000
- 2005: $316,000
- 2004: $300,000
- 2003: $300,000
(for players on 40-man rosters for at least the second year or for players with at least one day of major league service)
- 2009: $65,000
- 2008: $62,500
- 2007: $60,000
- 2006: $54,500
- 2005: $52,600
Minor League Free Agency
A player becomes eligible to sign with any organization as a minor league free agent when he has played six full minor-league seasons with the club that drafted him. If a player is released, he becomes a minor league free agent upon the expiration of any subsequent contract he signs.
Minor League Rosters
Minor-league rosters consist of an Active List (players currently eligible to play) and a Reserve List (the entire roster). Players may be loaned to other minor league clubs, but they must be returned by September 30. Minor-league clubs may place injured players on the disabled list for 7 or 60 days (the Emergency Disabled List). As with players in the majors, players on the minor-league 60-day disabled list do not count against either roster limit. Age restrictions do not apply to players on rehab assignments.
Reserve List roster limits
- 38 players for AAA clubs, 37 for AA clubs, 35 for A clubs and below
Active List roster limits
- AAA clubs: 24 players.
- AA clubs: 24 players (first 30 days of the season), 23 players (day 31 to August 10) and 24 players (August 11 to the end of the season, including the playoffs).
- A clubs: 25 players, with no more than two players with more than five years of minor-league service time.
- Short-season A clubs: 30 players. No more than 25 players may be used in a single game. As of July 1, the Active List must include at least 10 pitchers. No more than four players may be 23 years old or older. No more than three players may have four or more years of minor-league service time.)
- Advanced rookie clubs: 35 players. No more than 30 players may be used in a single game. As of July 1, the Active List must include at least 10 pitchers. No more than 12 players may be 21 years old or older, and no more than two players may be 23 years old or older. No player may have more than two years as a professional, and no player may have three or more years of minor-league service time.
- Rookie clubs: 35 players. No more than 30 players may be used in a single game. As of July 1, the Active List must include at least 10 pitchers. No more than 8 players may be 20 years old or older, including two drafted players and four undrafted players who are at least 21 years old. No player may have more than two years of minor-league service time.
Options
An option (optional assignment) allows a club to move a player on its 40-man roster to and from the minor-leagues without exposing him to the other 29 teams.
After 4 or 5 years as a professional, a player must be added to his club’s 40-man roster or exposed to the 29 other clubs in the Rule 5 draft. (A club has 5 years to evaluate a player who signs his first pro contract at 18 years old or younger, but only 4 years to decide on a player who signs at age 19.) For purposes of calculating years as a pro, the counting begins the day a player signs his first pro contract, not the season he begins to play.
When a player is added to the 40-man roster, his club has three “options,” or three separate seasons during which the club may to move him to and from the minor leagues without exposing him to other clubs. A player on the 40-man roster playing in the minors is on optional assignment, and within an option season, there is no limit on the number of times a club may demote and recall a player. However, a player optioned to the minor leagues may not be recalled for at least 10 days, unless the club places a Major League player on the disabled list during the 10-day window.
After three options are exhausted, the player is out of options. Beginning with the next season, he must clear waivers before he may be sent to the minors again. See Waivers. Additionally, a player with 5 years of Major League service may not be sent to the minor leagues on an optional assignment without his consent.
Counting option years
- If a player is not sent to the minors during a year, an option is not used.
- If a player is on the 40-man roster in spring training but optioned to the minors before the season begins, an option is used.
- If a player’s optional assignment(s) to the minors total less than 20 days in one season, an option is not used.
- A player may be eligible for a fourth option year if he has been optioned in three seasons but does not yet have five full seasons of professional experience. A full season is defined as being on an active pro roster for at least 90 days in a season. (If a player is put on the disabled list after earning 60 or more days of service in a single season, his time on the DL is counted.) The 90-day requirement means short-season leagues (New-York Penn, Northwest, Pioneer, Appalachian, Gulf Coast, Arizona Rookie, Dominican and Venezuelan Summer Leagues) do not count as full seasons for the purposes of determining eligibility for a fourth option.
Outright assignments
A player assigned outright to the minor leagues for the first time in his career must accept the assignment. Thereafter, a player has the choice of 1) rejecting the assignment and becoming a free agent immediately, or 2) accepting the assignment and become a free agent at the end of the season if he has not been returned to the 40-man roster.
A player with 3 years of Major League service may refuse an outright assignment and choose to become a free agent immediately or at the end of the season.
A player with 5 years of Major League service who refuses an outright assignment is entitled to the money due according to the terms of his contract.
Player Limits
The Major League roster limit is 40 from September 1 until Opening Day, when the number of players must be reduced to 25.
Player To Be Named Later
A transaction including a player to be named later must be completed within six months. The player may not be an active Major Leaguer player during the interval between the trade and the date the player is named. As a result, most players to be named later are minor leaguers.
At the time of a trade, clubs sometimes agree on a list of players from which the player to be named will be selected. They also may agree on an amount of money to be exchanged in lieu of a player.
Clubs may include a player to be named later in a trade if a player is not eligible to be traded. For example, once a draft pick signs a professional contract, he may not be traded until an entire year has elapsed (the Pete Incaviglia Rule). Additionally, a player on a minor-league reserve list may not be traded between November 20 and the Rule 5 draft in December, so trades during that window may include a PTBNL.
Renewal
A club may unilaterally renew the contract of a player not yet eligible for arbitration if the club and the player fail to agree on a salary. A club may not renew a contract at a salary less than 80% of the player’s salary and performance bonuses the previous year or less than 70% of his salary and performance bonuses from two years earlier. See Maximum Salary Reduction.
Rookie Qualification
A player is a rookie unless, during a previous season or seasons, he has:
- more than 130 at-bats or 50 innings pitched in the Major Leagues, or
- more than 45 days on a Major League active roster during the 25-man limit period (April-August), excluding time on the disabled list.
Rule 5 Draft
The Rule 5 draft is held each December at the Winter Meetings, and it consists of a Major League portion and a minor league portion. By November 20, each club must set its 40-man roster and submit reserve lists for all major and minor-league levels (See Minor League Rosters). Between November 20 and the Rule 5 draft, a club may add Major League free agents to its 40-man roster but may not add any player from its minor league reserve lists.
After 4 or 5 years as a professional, a player must be added to his club’s 40-man roster or exposed to the 29 other clubs in the Rule 5 draft. (Under the new CBA, a club has 5 years to evaluate a player who signs his first pro contract at 18 years old or younger, but only 4 years to decide on a player who signs at age 19.) For purposes of calculating years as a pro, the counting begins the day a player signs his first pro contract, not the season he begins to play.
Clubs draft in reverse order of their won-loss records in the previous season, and only clubs with less than 40 players on their rosters may take part. To select an eligible player, a drafting club pays $50,000 to the player’s original club. The drafting club must keep the player on its 25-man active roster for all of the next season or put him on waivers. If a third club claims the player on waivers, the third club also must keep him in the majors all season. If the player clears waivers, he must be offered back to his original club for $25,000. A drafting club may work out a trade with the player’s original club so that the drafting club can keep him and send him to the minor leagues.
If, because of injury, a player selected in the Rule 5 draft spends less than 90 days on the active Major League roster, he also must remain on the Major League roster the next season until he earns 90 days of service. Otherwise, he must be put on waivers and offered back to his original club.
The Rule 5 draft also includes two minor-league phases. In the AAA phase, a player not protected on his club’s 40-man roster or 38-man AAA reserve list may be selected for $12,000. In the AA phase, a player not protected on his club’s 40-man roster, 38-man AAA reserve list or 37-man AA reserve list may be selected for $4,000. A player selected in the minor-league phase of the Rule 5 draft is not required to play the next season with his drafting club at the higher organizational level.
Service Time
A player earns Major League service time for each day he spends on the active (25-man) roster or on the Major League 15-day or 60-day disabled lists. A player also continues to earn service time while serving any disciplinary suspension or serving in the military.
Under the CBA, 1 year of service is defined as 172 days. A player may earn up to 172 days of Major League service during a championship season (regular season), which generally lasts 183 calendar days. If a player is sent to the minor leagues on optional assignment for a total of 20 days or less during a season, he receives service time for the entire season.
Service time specifics
- A player promoted from the minor leagues is credited with ML service beginning with the date he physically reports.
- Service time is not interrupted when a Major League player is traded and reports to his new club in the normal course (within 72 hours).
- A player demoted to the minor leagues is credited with ML service through the date of the assignment.
- A player who is unconditionally released is credited with ML service through the date he was notified of his release.
- A Major League player designated for release or assignment continues to be credited with service after the designation, through the date of the actual assignment or the date he is notified of his unconditional release.
- For a player who appears on the opening day roster, ML service time is credited as of the earliest scheduled opener, without regard to the actual opening date of his own club.
- ML service time is not credited during any period or periods of optional assignment totaling 20 days or more during a single season.
- 3 years
- A player with at least 3 years of Major League service is eligible for arbitration. (Eligibility for arbitration also is extended to players just shy of 3 full years of service. See Super Two.)
- In addition, a 3-year player may not be removed from the 40-man roster without his permission. The player may choose to be released immediately or at the end of the season.
- 5 years
- A player with at least 5 years of Major League service may not be demoted to the minor leagues on optional assignment without his consent. A 5-year player who refuses an optional assignment to the minors must be offered his release.
- A player with 5 years of service who has been traded in the middle of a multi-year contract may, during the off-season, require his new team to either trade him or let him become a free agent. If the player is eventually traded, he's not eligible to demand a trade again under the current contract and loses free agency rights for 3 years. However, the 2007-11 CBA eliminated this right for players signing multi-year contracts under the new CBA. Players signed to multi-year deals before the effective date of the 2007-11 CBA retain the right to demand a trade if traded during the life of their current contracts.
- 6 years
- A player with at least 6 years of service is eligible for free agency.
- 10 years
- A player with at least 10 years of service may not be traded or assigned without his consent, provided the player has spent the last 5 years with his current team.
Super 2
A player with almost 3 years of Major League service time may become eligible for arbitration.
To qualify, a player must:
- have at least 2 years of service, but less than 3, and
- have accumulated at least 86 days of service in the previous year, and
- rank in the top 17% of all 2-year players in service time.
Ten-and-Five Rights
A player with at least 10 years of Major League service may not be traded or assigned without his consent, provided the player has spent the last 5 years with his current team.
Tender Date / Non-tender
Major League clubs must offer contracts to players on its roster by December 12. In general, an offer may not be less than 80% of the player’s salary and performance bonuses the previous year or less than 70% of his salary and performance bonuses from two years earlier.
If a club has no interest in keeping a particular player, the club may choose to non-tender him, or to not offer him a contract. A player generally becomes a candidate to be non-tendered when he is arbitration-eligible and his club determines he is not worth the salary he might command in arbitration. A player who is non-tendered becomes a free agent and may sign with any of the 30 Major League clubs, including his former team, at any price.
Trading Regulations
Between the end of the regular season and July 31, a player may be traded without passing through waivers.
Between August 1 and the end of the regular season, a player may not be traded unless he first passes through revocable Major League waivers. In August, clubs submit revocable waiver requests for most players. If a player is not claimed within 47 business-day hours, he may be traded to any club. If a player is claimed by another club, the request may be withdrawn, allowing the player’s current club to pull him back. However, the player’s current club also may 1) work out a trade with the claiming club within 48 ½ business-day hours, or 2) elect to allow the claiming club to take the player and assume responsibility for his current contract.
If more than one club claims a player on Major League waivers during the August 1-November 10 waiver period, the club with the lower winning percentage has priority, with American League clubs holding priority for AL players and National League clubs holding priority for NL players.
A player acquired after August 31 is not eligible to be placed on the post-season roster with his new club.
The commissioner’s office must approve of any trade involving:
- a player on the disabled list, or
- a transfer of more than $1 million cash.
Waivers
A waiver is permission from other clubs to trade or assign a Major League player’s contract. A waiver request is filed through the Commissioner’s Office and granted for a limited time period.
There are three types of waivers: 1) unconditional release waivers, 2) outright waivers (special waivers), and 3) Major League waivers.
Unconditional Release Waivers
A club that wishes to release a player places him on unconditional release waivers. He then may be claimed for $1, but the player has five days to choose whether to accept it or refuse the claim and become a free agent. If the player rejects the claim, he become a free agent and forfeits the remaining money due on his contract. If the player accepts the claim, the new team pays him under the contract he signed with his former team. If no team claims the player, he becomes a free agent.
Irrevocable Outright Waivers
A club that wishes to remove a player from its 40-man roster but keep him in its minor-league system must first place him on outright or special waivers. Outright waivers are not revocable, so a player claimed on outright waivers may not be pulled back by his original club. When a player in the middle of a guaranteed contract is claimed on waivers, the claiming club pays $20,000 and a pro-rated portion of the league minimum salary, with the original club remaining responsible for paying the rest of the money due under the contract. A club may not request outright waivers on a player with a complete no-trade clause or on a player ten-and-five rights.
Through 2006, outright waivers secured between September 1 and 30th day of the next season were known as Special Waivers. The owners and players eliminated Special Waivers in the 2007-2011 Collective Bargaining Agreement.
Major League waivers
- Trade Assignment waivers. Trade assignment waivers are utilized in August as a means to gauge trade interest. Between August 1 and the end of the season, a player may not be traded without first clearing trade assignment Major League waivers. If the player is not claimed within 47 business-day hours, he may be traded to any club. If the player is claimed by another club, the request may be revoked, allowing his current club to pull him back. However, the player’s current club also may 1) work out a trade with the claiming club within 48 ½ business-day hours, or 2) elect to allow the claiming club to take the player for a $20,000 fee and assume responsibility for his current contract. If more than one club claims a player, the club with the lower winning percentage has priority, but American League clubs have priority for AL players, and National League clubs have priority for NL players. Once a player on major league waivers has been claimed and the waiver request revoked, any subsequent request for major league waivers during the same waiver period is irrevocable. A player with a no-trade clause who is claimed on Major League waivers must be pulled back if the player’s no-trade clause allows him to block a deal to the claiming club. However, the player may waive the no-trade clause and join the claiming club.
- Optional waivers. Optional major league waivers are required when optioning a player who has options remaining but who is more than three calendar years removed from his first appearance on a Major League roster. Because optional waivers are revocable, players usually clear in this scenario.
Waiver periods & waiver claim priority
November 11 - April 30 (Nov. 11 - 30th day of the next season)
- The club with the worst won-loss record in the previous season has priority.
- The club with the worst won-loss record in the current season has priority.
- The club with the worst won-loss record in the current season has priority, but American League clubs have priority for AL players, and National League clubs have priority for NL players.
