General Transaction Rules

[Steff]

The Draft

 

This is where most American and Canadian athletes start his path to the Major Leagues. The draft is held every year in June with clubs selecting players based on reverse order of their win-loss records from the previous season and the leagues alternating selections. The American League gets the first pick in odd-numbered years with the National League obviously getting it in the even-numbered.

 

The number of rounds has varied historically, but a team has the option to drop out of the draft at any point and if all the teams drop out, the draft simply ends. If you are a resident of the United States, Canada, Puerto Rico or any other U.S. territory, you're eligible for the draft. Once you sign either a major or minor league contract, you're ineligible for all future drafts. Foreign-born players are currently not subject to the draft.

 

A club keeps the rights to a player until a week before the next draft or enrollment in a four-year college. Also, a club cannot draft a player in two consecutive drafts without the player's written consent.

 

Once a player drafted has signed with the club, he cannot be traded until an entire year has elapsed (the Pete Incaviglia Rule).

 

The Minors

 

In the minor leagues, the rosters are managed in quite a different manner than the standard 25-man rosters in the majors. Minor league teams keep two separate lists of players. The first is the Active List which, like in the NFL, denotes which players are eligible for the current game while the second list, the Reserve List, is the entire roster of the team.

 

AAA and AA clubs are allowed to put 24 players on the Active List for the first 30 days of the season, 23 players on the Active List from the 31st day until August 10th and then 24 players again for the rest of the season, including the playoffs. The Reserve List limit, however, is always 38 players for AAA and 37 players for AA teams.

 

For A teams, the Active List limit is 25 players, for Short-Season A teams, 30 and for Rookie Teams, 35. All levels below AA allow clubs a Reserve Limit of 35 players. Below A-ball, only 25 players may actually get into a single game.

 

Players may be loaned to other minor league organizations, but must be returned by September 30.

 

As in the majors, there are two disabled lists. The normal disabled list only has a 7-day minimum as opposed to the 15 days used as the limit for the majors. The 60-day DL, or Emergency Disabled List, works the same as in the majors; the player doesn't count against any roster limits but cannot be reinstated until either 60 days have passed or the season ends.

 

Rule 5 Draft

 

Once a player is signed by an organization either through the draft or as a free agent, the clock immediately starts ticking on the club's exclusive rights to the player.

 

After 3 complete minor league seasons (or 4 if the player was younger than 19 on the preceding June 5), a player comes to one of the major crossroads of his career. At this point, a team has to decide if they want to sign the player to a major-league contract (adding him to the 40-man roster which consists of 25 active players and 15 on optional assignment) or if they want to let the other teams have a shot at him.

 

Players that have the minor league seasons required and are not added to the 40-man roster are eligible for baseball's Rule 5 draft. A player can be drafted by another organization for a sum of $50,000. The catch, however, is that if the player is ever removed from his new team's 25-man roster during the next season, he has to be offered back to the original club for half the price, or $25,000.

 

A player not on the 40-man roster and not taken in the Rule 5 draft remains under contract with his current organization. If the player has less than 6 years of minor league service, he can elect to be a minor league free agent, thus getting out of Rule 5 consideration for all intents and purposes.

 

The 40-Man Roster and Options

 

Now that the player is on the 40-man roster, another clock starts ticking. He's signed to what amounts to a major-league contract, but the organization has a limited number of seasons in which to keep the player on the team for good. A player can be removed from the 40-man roster at any time, but removing a player from the 40-man roster results in the player having to pass through waivers.

 

Once a player is added to the 40-man roster, the parent club can send him down to the minors on "optional assignment" in 3 separate seasons. You don't need to actually be on the 25-man roster for an option year to be used; being on the 40-man roster in spring training and optioned to the minors before the season is enough to make the season count as an option year. If a player is never sent down, however, he doesn't use an option year.

 

Also, despite it being a major league contract, the minimum for players on the 40-man roster and not the 25-man roster is $37,000 plus collective cost of living increases since 1999.

 

After the three option years are up, a player must pass through waivers to be placed on optional assignment.

 

When a player is designated for assignment, the player is essentially in limbo. He doesn't count against any of the roster sizes and this is used while you either try to trade the player or get him to accept a minor league assignment.

 

When a player is placed on waivers, other teams have a shot at claiming him, in order of worst record in the same league to best record in same league to worst record in opposing league to best team in opposing league. For the first month of the season, the W-L record of the previous season is used. When a team places a waiver claim on a player, the new team is subject to the same option rules. For example, if the Red Sox claim Joe Schmoe off waivers because he was out of options when the Devil Rays sent him down, the Red Sox would then have still to pass Schmo through waivers to send him down to their own minor league team.

 

There are two disabled lists in the majors. The 15-day disabled list forces teams to keep players out for a minimum of 15 days and does not count against the 25-man roster. The 60-day or Emergency disabled list requires a minimum of 60 days on the shelf and doesn't count against either the 25-man or 40-man roster.

 

Service Time

 

Service time is accrued for every day spent in the majors. If a player spends 20 days or less of the season on optional assignment, the player is given service time for the entire season. This is to prevent various shenanigans if calling up a player at the end of April to buy an extra year of rights.

 

Service time allows the player more authority over how his contract can be assigned.

 

A player with 10 years or more Major League service, the last 5 being with the team he's currently on may not be assigned to another team without his consent.

 

A player with 5 years or more Major League service cannot be optioned to the minors without his permission. He must be offered his release. In the case of a player signed to a Major League contract as a free agent, and thus almost certainly signed to a guarantee contract, still has to be paid according to the provisions of his contract.

 

A player with 3 years or more Major League service may not be removed from the 40-man roster without his permission. The player can opt to be released immediately or at the end of the season.

 

A player may elect to become a free agent whenever he is removed from the 40-man roster starting with the second removal of his career. The player may opt to not become a free agent but to become a free agent after the season.

 

A player with 5 years or more Major League service that is traded in the middle of a multi-year contract may, during the offseason, 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.

 

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.

[Steff]

Guys.. they are not all in one place, and a pain in the ass to find. We have bowling tonight so I wont be able to look much longer, but I'll try again tomorrow. Are there any specific ones anyone wants to see? That might help in my search if I can look for specifics.

[Steff]

And here's some more.

 

And a little info about these "rules"...

 

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. 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.

 

I've asked if someone can get their hands on some more of them for me.. I'll keep you posted, but I wouldn't hold our breath.

 

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.

[Steff]

Rex.. do you think these more detailed "rules" are outlined in the CBA..? I have a copy of it at home (don't ask.. ) and I'll bring it to work tomorrow and look over it.

[Steff]

Jason.. sorry if this takes up too much space. Let me know if it's an issue and I won't post any more of them. What I'm finding seems to be pretty lengthy.

[Rex Hudler]

Steff, it is good stuff.... I have never actually seen a copy of the CBA, so I can't tell you. Wouldn't it be nice if these "rules" were listed as an additional section in the Official Baseball Rulebook? Thanks for looking all of that up. I was surprise at how much I already knew, but all it takes is to forget a little tidbit here or there and you can mess them all up.

[Chisoxfn]

This is really good stuff Steff. I think when its all set and done, I'm going to pin this post in the archive forum so people can easily access the rules.

[Steff]

This is really good stuff Steff.  I think when its all set and done, I'm going to pin this post in the archive forum so people can easily access the rules.

OK then. I got home a bit ago and I found my copy of the CBA.. maybe I'll type it out and you can archive that? There's a LOT of info in it.

[Chisoxfn]

OK then. I got home a bit ago and I found my copy of the CBA.. maybe I'll type it out and you can archive that? There's a LOT of info in it.

That works for me.

[Steff]

That works for me.

It will take me a while. It's over 200 pages long..

 

Also.. it's initial distribution. Who gave it to me said it should not have changed, but I want to be sure to have a disclaimer in there.

[Chisoxfn]

Wowzers, I'm sure once its done I'll set it up as a static html page and link it on the top of the site, that will probably be the best way for everyone to read it. Or maybe figure out how to set it up as a pdf.

[YASNY]

Thanks for posting this Steff. It makes for some interesting reading. It reaffirmed some things that I thought I knew, but was "iffy" on and cleared up some questions on other issues.

[Rex Hudler]

It will take me a while. It's over 200 pages long..

 

No problem...... You have until noon Thursday. Let's get movin!

[DBAHO]

No problem......  You have until noon Thursday.  Let's get movin!

That's gonna be a whole lot of typin. Thanx for postin it though, I always wanted to learn more but things such as the Rule 5 draft and stuff like that that's hard to find.

[Steff]

No problem......  You have until noon Thursday.  Let's get movin!

 

Don't hold your breath guys..

[southsider2k5]

It will take me a while. It's over 200 pages long..

 

Also.. it's initial distribution. Who gave it to me said it should not have changed, but I want to be sure to have a disclaimer in there. 

holy s***. Are you saying you are going to type up 200 pages just for the people here to view? With all due respect are you insane Steff?

[Pastime]

If she can find it on the Internet somewhere, "cut and paste" will save her tons of time, as well as unnecessary wear and tear on her fingers and wrists.

[Steff]

holy s***.  Are you saying you are going to type up 200 pages just for the people here to view?  With all due respect are you insane Steff?

I was going to scan it actually, but I got a friend to email it to me when he gets into the office.

I was feelin' no pain when I said that last night...

[southsider2k5]

I was going to scan it actually, but I got a friend to email it to me when he gets into the office.

I was feelin' no pain when I said that last night... 

ahh, ok. The drunken project. I totally understand that

[Rex Hudler]

I was going to scan it actually, but I got a friend to email it to me when he gets into the office.

I was feelin' no pain when I said that last night... 

Steff, do you know what format it will be emailed to you in? If you want to forward it to me, I can convert it to a PDF which would make it web friendly and can easily be posted without any copying/cutting or pasting.

[Steff]

Steff, do you know what format it will be emailed to you in?  If you want to forward it to me, I can convert it to a PDF which would make it web friendly and can easily be posted without any copying/cutting or pasting.

It's coming over in pdf. PM me where you want me to email it to..