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May 24, 2010

Checking the Numbers

The Trade-Me Clause

by Eric Seidman

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Over the weekend news broke that Roy Oswalt’s agent, Robert Garber, had gotten in touch with Astros owner Drayton McLane in order to request that the veteran ace be traded to a sunnier situation. Oswalt is in his 10th season with the Astros, having spent his entire major-league career in Houston, but likely realized that his time as an elite hurler is running out and his current employer has no true direction or blueprint for success. It is truly a dreadful situation in Houston: the Astros have a terrible farm system and the valuable pieces on the major-league club realistically needed to be traded two years ago in order to extract a return capable of seriously enhancing their talent level. Now, in order to receive anything of value for players like Oswalt or Lance Berkman, the Astros will have to eat a heftier chunk of the remaining change on their contracts. Consider this to be a rant on the Oswalt situation to be used as the foundation of a brief transactions primer.

Oswalt should be traded, because the Astros aren’t going anywhere and he is one of very few players that could conceivably be traded who would have a more than marginal impact on a playoff race. However, I am frankly getting tired of players demanding or requesting to be traded, and the majority of fans then empathizing with them, finding ways to justify why the player should receive a sendoff following the request. Some will say that the Astros owe it to Oswalt, an organizational warrior, to trade him somewhere with a chance to win. But to that I ask: Why?

The Astros have paid Oswalt handsomely over the course of his career and, while the cliché dictates that money doesn’t always buy happiness, he signed a contract to pitch for the team for five years after the 2006 season. If the contract did not include any type of an out clause, he should have little say or influence over who signs his checks throughout those five years. Nowhere in his contract, or any other major-league contract, does it say that if the player isn’t happy at any point he can ask to be traded and the team must oblige. Certain players receive out-clauses in their contracts, meaning that if, after a few years they want to test the free-agent waters again, or are unhappy in their current situation, the remainder of the contract can be voided. Oswalt is not one of those players.

One of the major issues with the situation is that, as I mentioned above, Oswalt really should have been traded a couple of years ago, when his value was at its highest point and both parties could benefit. The pitcher could have been shipped to a team that would better utilize his services and the Astros would have received several pieces to enhance their future.  Or, before re-upping with the team, he should have made sure that he agreed with their plans for the future. It’s not like if he went year to year and then left via free agency that nobody would have paid a pretty penny for his services. And it’s not like a player asking about the team’s future is taboo or frowned upon in negotiations.

The extension afforded him security, trading free-agent eligibility for the guarantee of being able to play on a certain team and receive lucrative stipends for several years, but that was a tradeoff benefiting both he and the team. Now, even though things aren’t working out, a move sending him to another team should be contingent upon general manager Ed Wade and Drayton McLane feeling comfortable with what they can get in return and not based on what Oswalt desires. If Wade and McLane think that trading Oswalt is better for the long-term future of the team—and it really is—they should move him.

Wade responded to the request by commenting that Oswalt has a no-trade clause built into his contract, not a trade-me clause, which seems simple enough to understand, but is often lost upon the majority of fans when these requests surface. It seems that whenever players request a trade, reactions involve immediately drawing up scenarios as if a trade is imminent and all requests are met, as if the simple act of making the request automatically results in the team bending over backwards to appease the player. What makes the situation worse is that the publicity surrounding Oswalt’s request hurts the Astros' leverage in trade talks. Teams will certainly benefit from adding a pitcher of Oswalt's caliber to their rotation, but if they know the Astros need to trade him, they can likely pony up less.

Factor in his no-trade clause and we could potentially be in line for a detrimental situation; Oswalt might only want to go to a couple of teams, which lowers the Astros leverage even further, and his salary—$15 million this year, $16 million in 2011, and a $16 million club option for 2012—could scare off some potential suitors. This would require the Astros to pay more of his salary than they would like to even extract Grade C prospects in a trade. The Astros might not have had much leverage to begin with given that most other teams better assessed the situation in Houston than Wade and McLane. Oswalt’s request effectively wiped away whatever semblance of leverage remained. He is a high-paid player who wants out, and has ultimate say on where he wants to go—not exactly the easiest type to trade.

What are no-trade clauses? The term has become so prominent over the last decade that it is easy to forget how rare they were for a while. No-trade clauses are contractual provisions designed to entice players into signing with a team based on the value of the provision in addition to the salaries offered. The clause, which can be either full or limited, gives the player say over whether he can be traded, and where he can be traded. They first rose to prominence in 1975, when Andy Messersmith, a Dodgers starter, sought assurance that he would not be traded. The Dodgers' refusal to grant a no-trade promise, as well as their offer of a slight increase in salary, led to Messersmith playing the season without a contract and eventually led to the creation of free agency.

A limited no-trade clause allows a player to pick a certain number of teams to whom his current employer cannot deal him. Jimmy Rollins, for example, gives the Phillies eight teams every year he does not want to play for, in the off-chance the team decides to move the shortstop. A full no-trade clause, on the other hand, like the one in Oswalt’s contract, gives the player ultimate say in his destinations. The clauses have monetary value as well, because some players require extra payment in order to waive the clause. For example, in order to entice Gary Sheffield into accepting a trade from the Marlins to the Dodgers, both teams coughed up $2.5 million to the former All-Star. Agent Scott Boras considers the provision to be family-based, noting how many spouses desire no-trade clauses in contracts, as it would prevent having to be uprooted every couple of years. Owners consider them to be money grabs, as in Sheffield’s scenario.

A famous case involved Fred McGriff in 2001, when he played for the Devil Rays. McGriff got off to a scorching start, hitting .336/.403/.553 with 14 homers at the end of June. The first-place Cubs took notice and wanted to trade two prospects to Tampa Bay to bring the slugger on board. Though no-trade clauses are often waived in order for the player to move to a contender, McGriff mulled over his decision for a long time given that his family lived in Tampa and that was a bigger priority than winning. He eventually waived the clause and hit .275/.368/.534 with 17 homers for the Cubs.

The issue with these clauses is that, in a situation like Oswalt’s where he is high-priced, it limits the pool of potential suitors even further, because teams that could afford to take on his salary could be eliminated by the player. The Orioles could conceivably afford his salary, but why would Oswalt want to go to a team already out of contention? However, even if the Astros didn’t include a full no-trade clause in Oswalt’s contract, the righty would have garnered no-trade protection next season under the 10-5 rights of the Collective Bargaining Agreement that first came into effect in 1973. The labor law provides that players with 10 years of service, the most recent five of which have been on the same team, can veto any trade. This is Oswalt’s 10th season, but his actual service time is around nine years, meaning he would not receive these rights until sometime in the near future.

Though Wade’s reaction to the trade request involved the tongue-in-cheek mention of the lack of a trade-me clause, such clauses existed in one form or another in the past. In a compromise featured in the CBA effective from 1976-79, any player with five years of service time could demand a trade from his current team. If the demand was not met, he would become a free agent, with the stipulation that he could not again become a free agent until five further years of team control had passed. The clause eventually evolved into what I like to call the Javier Vazquez Rule, since the pitcher is one of few players to use it to his advantage.

The Vazquez Rule provided that players with five years of service time who were traded in the midst of a multi-year deal could demand a trade or release from the acquiring team after the season. The team would then have to try to work out a trade and, if they couldn’t, the player would become a free agent, voiding his remaining contract. If a trade was worked out, the player would lose no-trade or trade-me rights as well as losing free agency rights for three years. Vazquez had signed a four-year extension with the Yankees worth $45 million prior to the 2004 season, and was traded to the Diamondbacks the following year for Randy Johnson. He demanded a trade after the 2005 season and was sent to the White Sox. Due to these rules, which were eliminated under the current CBA that went into effect in 2007 and expires after next season, Vazquez was able to demand a trade. Though the clause has since been removed, players who signed multi-year deals before 2007 are still eligible.

This removed clause does not apply to Oswalt. While he was going to earn no-trade protection under 10-and-5 rules even if a clause was not included in his contract, he is not of benefit from any type of trade-me clause. It is in the Astros best interest to send him elsewhere given that he is the most valuable asset on their books, but it is silly to think that the team owes it to Oswalt to follow through on his request just because he has pitched well for them. Hopefully, however, this is the first step in a much-needed overhaul of the Astros, as that will be the only way the franchise will have a chance at being relevant in the next decade.

Eric Seidman is an author of Baseball Prospectus. 
Click here to see Eric's other articles. You can contact Eric by clicking here

14 comments have been left for this article. (Click to hide comments)

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Brian24

I don't understand what your beef is here, Eric. Oswalt and the Astros agreed to the "no trade clause" when they negotiated his contract. That clause means essentially that they can't trade him without his permission. Of course it is true that this clause doesn't mean he can demand a trade. But it also doesn't mean he can't. Oswalt is as free as any other baseball player to ask his employers to trade him. And, again as with any other player, the 'Stros are free to accede to his wishes or ignore them, depending on their own needs.

And who are these fans you speak of who are getting behind these sorts of moves? In my experience, when an athlete requests a trade like this, people slander him as a traitor and a wimp, though the player is just understandably seeking to give themselves a chance to compete for a championship.

I certainly don't blame Oswalt for rquesting the trade. And, as you admit in hyour article, they really ought to trade him anyway. So what's the problem?

May 24, 2010 02:04 AM
rating: 4
 
BP staff member Eric Seidman
BP staff

Brian, it's beef with how the situation has played out, and how things like this happen all the time. I cringe when I hear trade requests/demands because it hurts the team. The Griffey scenario may be a bit extreme, but KGJ really put the Mariners in a terrible position at the turn of the decade when he demanded a trade and essentially refused to go anywhere other than Cincinnati.

Oswalt might not be like that, but he was going to be a tough player to trade given the no-trade clause and his salary, before factoring in a public desire to move on. I hope, for the Astros sake, that doesn't hurt them that much, because it would be terrible for their one really valuable piece to net "meh" prospects in return. But then again, even "meh" is an upgrade over what they have.

May 24, 2010 04:35 AM
 
BuzzingThalami

I have to agree with Brian24 and some of the other posters here. I don't think Oswalt exactly *demanded* a trade, and it sounds like his *desire* for one (different, and completely understandable) was communicated in a tactful manner. (However the leaking of said conversation was, as Eric points out, detrimental to leverage.)

And consider the generous, free remedial Major League Baseball GM tutoring session Oswalt is offering to the clueless Ed Wade here. He's saying (between the lines), "Sir, I've noticed you have no plan. You've had no plan for several years. You continue meandering along with middling/mediocre talent in the bottom of the division each year and instead of getting started rebuilding or going for broke, we see... more meandering. Sir, you need to do something."

Oswalt isn't even charging Wade or McLane for this GM 101 primer. I'd say Wade is making out well on that transaction.

May 24, 2010 18:07 PM
rating: 2
 
CRP13

To my understanding, Oswalt's agent did not demand a trade. They approached the Astros to determine if there was a plan to acquire players to try to contend or if they were going into rebuilding mode. If rebuilding, the agent says that Oswalt will want to be traded to go to have a chance to get to the playoffs. Why is this news? Everybody knows that if the Astros rebuild, Oswalt would likely be the first to go, regardless if the Astros take on a chunk of his contract. And why wouldn't they to get a good return in prospects? Money has never been the Astros' problem, and they're on the hook for way more money and a gloomier future if they keep Oswalt.

The part that irks me is what nobody has mentioned. How was this story leaked to a writer in Chicago? If it came from the Astros' side, somebody needs to be fired. If from Oswalt's side, somebody in the agents' office needs to be fired. As you said Eric, the publicity of this really harms the odds that a productive trade can be reached, and since the Astros are under no pressure at all to take 50 cents on the dollar, it hurts Oswalt's chances of getting his wish to play for a competitor as well.

I find it hard to fault Oswalt for asking for a trade in this manner, as your second paragraph implies - I'm sure it happens weekly in the majors. The problem is when it leaks and somehow becomes a major news story. Now it's become a mess for the Astros and for Oswalt, who has never gone out of his way to be in the spotlight before now.

May 24, 2010 06:25 AM
rating: 3
 
Tarakas

I know Oswalt has been amply compensate for his efforts, and I do not feel sorry for him. I would gladly receive his money top pitch for a last place team.

But I guess I have more trouble supporting the team. The Astros have lacked a viable plan for the team for years, trying to supplement an aging core with mediocre veterans while neglecting the draft. They have spent the period of Oswalt's contract running the team into the ground. That their veterans want out is entirely ownership and management's fault.

That Oswalt is not complaining to the press is commendable. Quite frankly, I'd understand it if he told the press:

"When I made a long-term commitment to the Astros, my understanding was that I would make a commitment to conditioning and being the best player I could be, and they were also making a commitment to fielding a legitimate team. They have clearly failed to follow through with their commitment, and I am sick of busting my butt to show up and pitch great games for a team without the talent to win them. The only reason I show up to the ballpark is they pay me to, and I'm shocked fans continue to pay money to watch this team. I wake up every morning praying they will trade me, and I feel sorry for the good people of Houston, who have much less of a chance to end up with a winning team in the next decade than I do."

By comparison, having his agent ask for a trade seems pretty reasonable.

May 24, 2010 07:04 AM
rating: 3
 
blw777

While I agree in principle, it certainly seems that Oswalt has gone about this in a reasonable fashion. To hear one way of telling it, his agent simply told the club that if they had an interest in moving him, he'd be willing to consider waving his no-trade clause.

I do agree that Oswalt had the option of checking out the plans before he signed his deal, but it's not as if the club was forced to include this at gunpoint...

If he doesn't approve most of the trades, that is his option under the terms of the agreement that both parties signed. Moreover, it's not as if he's sticking the club with a situation any less tenable than they've already got: if they don't trade him, he does appear to be playing to the best of his ability, which is considerable. And the team benefits from the fans at least coming to see him, even if this isn't as worthwhile as the fans turning out in greater numbers for a competitive team, either now or in the future. I don't think Oswalt could be tagged as sinking the franchise with unreasonable demands.

May 24, 2010 07:30 AM
rating: 1
 
Dan

I'd agree that demanding a trade is selfish, but a request? As long as Oswalt will continue to perform to the best of his abiliites even if he is not traded, I don't see the big deal. It certainly would have been better if this had stayed between the Astros brass, Oswalt and his agent, but the fault for that may lay on the Astros side.

May 24, 2010 08:38 AM
rating: 0
 
bprocks1

This is a business decision made by both parties. The Astros need to maximize their reurn on their investment. Oswalt wants to pitch for a winning team. Both of these are reasonable propositions. Astros management backed itself into a corner here. The Astros won't get what should in return for Oswalt. On the other hand, Oswalt is a #2 or #3 starter for a contender, and he will get what he wants from SOMEONE. Isn't this the Roy Halladay scenario all over again, with a lesser talent?

May 24, 2010 08:38 AM
rating: 0
 
CRP13

Couldn't let this pass...it's typical for a middle-american team team player to be overlooked like this. For the record, W/L aside, Oswalt has better career traditional stats than Halladay. There's the AL/NL thing to consider of course, but just asserting that Oswalt is a lesser talent is highly, highly debatable.

Oswalt is a #1 starter for [i]most[/i] contenders outside of Philadelphia, St. Louis, and San Francisco, not a #2 or 3 as you claim. He should get a significant return in prospects if the Astros are willing to take on a lot of his contract.

May 24, 2010 11:08 AM
rating: 1
 
CRP13

Follow-Up to my Follow-Up, Oswalt has a lower translated ERA than Halladay as well. I would not say that Oswalt is better at this point in his situation than Halladay, but calling him a lesser talent is just incorrect.

May 24, 2010 11:12 AM
rating: 0
 
Michael Bodell
(89)

I agree Oswalt *was* a #1 starter. I'm not sure he still is. I'm also not sure you can possibly think he's better than Halladay. And what do you mean, W/L aside .. traditional? I mean the traditional stats are W/L (and we all know they suck).

Halladay has pitched in the toughest division in baseball facing opponents who are way tougher than what Oswalt has to face and hasn't, until recently, got to benefit from inflated K and lower ERA/WHIP from getting pitchers out.

Despite that Halladay has put up 48.3 WARP across his career and pitched 2100+ innings. Oswalt has only put up 45.5 WARP across his career and only managed 1850+ innings. Even if you limit it to from 2001 (when Oswalt came up, and, coincidentally when Halladay became good) we see Halladay has 48.2 WARP to the 45.5 of Oswalt. And while WARP may adjust for NL versus AL it doesn't adjust for AL East pitching to both NYY and BOS.

May 24, 2010 18:21 PM
rating: 0
 
CRP13

You're really splitting hairs dude. I never said Oswalt was better than Halladay right now. My point was only that the assertion that Oswalt is a "lesser talent" and a #2 or #3 starter is clearly false. For this year, 2.66 ERA 1.07 WHIP, .217 BAA and a 60/59 K/IP ratio hardly indicates that he's significantly worse than Halladay this year as well. This whole argument is just silly. Both guys are aces in every sense.

May 25, 2010 06:20 AM
rating: 0
 
Jack G

What's the real problem, though, as long as Oswalt isn't outright denying his services? His incentives are still to perform at a high level. When you have a market with a limited number of participants you're going to get signaling behaviors. Do you have a similar problem with teams that shop players with team-friendly contracts against their will?

I think you have an academic's desire to see the analyst community's theories validated by teams doing the "right" thing. The Astros have made their mistakes (that contract, not trading Oswalt earlier, the NTC)--we can't bail them out just to feel the satisfaction of MLB teams finally acting like they've learned something from us

May 24, 2010 09:03 AM
rating: 0
 
amazin_mess

Over the last decade, Oswalt has been better. Right now, it's hard not to say Doc is far superior.

May 24, 2010 18:59 PM
rating: 0
 
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