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January 10, 2006

The BP Guide to Transaction Rules


by Thomas Gorman

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Our third entry tries to explain the complicated "option" rules, as outlined in Major League Rule 11 (MLR 11). Most fans have heard of options, most serious fans know basically what they are, but few outside the Commissioner's Office understand all their ins and outs. The provisions of this rule take up just four and a half 9" by 5" pages in the Major League Rules, but they're complicated and confusing, so bear with me.

To be placed on the 40-man roster, a player needs to be given a major-league contract. When teams want to assign those contracts to a minor-league club (that is, when teams want one of their 40-man players to play for an affiliated minor-league franchise) they give the player an "optional assignment" down to the minor-league team (as opposed to an "outright assignment," which we'll leave for another day). An option is not used only when a player is shifted off the 25-man roster and down to the minors. An option is also expended when a player on the 40-man is assigned to a minor-league roster. For example, a player with a 40-man contract who spends his entire season in the minor leagues does use an option even though he never made it to the 25-man active roster of the major-league squad.

The optional assignment language signifies that the team has reserved a "right of recall" and can recall the player to the active list of their major league roster. Optional assignments are not subject to waiver approval from the other 29 clubs, and they give a team a great deal of freedom to move players onto and off of their major-league active rosters.

That's the basics of an option. It's an agreement to assign a player with a major-league contract to a minor-league roster, and the assigning organization reserves the right to recall the player to the active list of their major-league club. There are a number of rules that limit the use of options, and there are exceptions and caveats that further complicate the rules. These details are what make options so difficult to understand.

First, there is a limit to how many times a team can option a player down. Once a player gets a major-league contract (viz. "is added to the 40-man roster") he is typically eligible for optional assignment in three different seasons. He can be optioned down and called back up as many times as the club likes in each year, but the club only has that right in three individual seasons. There are some exceptions and qualifications to this hard three-season limit:

  • An option is not expended if the player is optioned down for less than 20 total days in a season. As long the total number of days a 40-man player is on the farm doesn't add up to 20, then an option hasn't been burned.

    Giants outfielder Todd Linden was optioned down to the minors in three different seasons, as you can sort of tell from his professional record. Being sent down in 2003 didn't count, though. Linden started the year with a minor-league contract in Fresno, and on August 17 he was placed on the 40-man roster for the first time and assigned to the major-league squad in San Francisco. On the 20th, Linden was optioned down, but he was recalled on the 21st and stayed with the major-league team for the rest of the year. Since he was only optioned down for a single day that year, he didn't burn one of his option years, which means that the Giants could option him down again in the coming season if they wanted to.

  • A player is eligible for a fourth option season if he has been optioned in three seasons and has not yet amassed five full seasons of professional baseball experience. A little slower now: if a player runs through his three option years very quickly in his professional career than his team is granted a fourth option.

    Consider another Giant, pitcher Kevin Correia. As you can guess from his professional record he was added to the Giants 40-man roster in 2003 and optioned down to the minors in 2003, 2004 and 2005. Three options burned so he can't be optioned again in 2006, right? Well, because his options were burned before he amassed five seasons of professional experience, he gets a fourth option year.

    Players who sign a major-league contract with their first professional contract typically burn an option in their first professional year, so it's not unbelievable that such players might run through all three of their standard option seasons within their first five years. The problem with that logic, of course, is that such players often make it to the majors and stick there for good. Guys like Mark Teixeira and Mark Prior both spent options in the first years of their career but they also stopped expending options pretty quickly.

What counts as a season of professional baseball for the option rule? Generally speaking, a player has to be on the active list of a major-league or minor-league team for at least 90 days during a championship season to be credited with a season of service. This creates three important caveats that complicate the fourth option year exception:

  • First, an amateur signed in one year often doesn't get signed and into a uniform in time to get 90 days of service for that year. You have to sign and get on a team pretty quickly to have your first year counted against you.

  • Second, since the short-season leagues never last 90 days, a year spent only with a short-season team doesn't count as a year of service. Looking back at Correia's record we can see that the only championship team he played for in 2002 was in the Northwest League (NWL). The NWL season doesn't last 90 days, so that doesn't count as a season of professional baseball for the option rule, which means that at the end of last season Correia is only considered to have had three years of service.

    So Correia will enter the 2007 season and still have completed less than five years of service. If the Giants don't use their fourth option on him in 2006 they'll still have one available on the hurler in 2007.

  • Third, disabled list time doesn't count towards a season of service unless it is preceded by at least 60 days on an active list. This means that a player injured for most or all of a season will likely not earn a year of service and is that much more likely to get a fourth option year down the road.

    Baseball America's Jim Callis tracked one such case in a column last year. Cleveland reliever Andrew Brown was first added to a 40-man roster at the end of 2002 and optioned down to the minors in 2003, 2004 and 2005. He signed his first professional contract in 1999, so surely he's amassed five seasons of service, right? Nope.

    In 1999, Brown was in the Gulf Coast League and didn't get 90 days of service. He missed all of 2000 while rehabbing from Tommy John surgery. In 2001 he was in short-season ball, so again, no 90 days. In 2003, he had bone-chip surgery and was on the disabled list the entire year. In six years of baseball, Brown has amassed just three seasons of service as defined by the option rule. He'll have a fourth option year available to him in 2006 and, just like Correia, if it isn't used next year he'll still have that option in 2007.

In the course of each option year, there are limitations on the major-league club's right of recall. Once a player has been optioned down to the minors he can only be recalled if 10 days of the optionee club's season have elapsed from the time he reported to the farm. There are three exceptions to this rule:

  • If a player from the active list of the major-league club is placed on the Disabled List subsequent to the optional assignment, the optioned player can be recalled to take that roster spot before 10 days have elapsed. Remember when Todd Linden was recalled just a day after his option down to Fresno in 2003? This was legal because he was called up to replace an injured Jesse Foppert.

  • If the minor-league club's season, including any playoffs, ends before the 10-day period has elapsed, then he can be recalled before the waiting period is over.

  • If the optioned player is being assigned to another major-league club's Active List via trade, he can be recalled to that roster before 10 days are up.

Let's review a couple of the last esoteric bits. A player can spend part of his season in the minors and part of his season in the majors and not have exhausted an option. Consider a player like Texas reliever Frank Francisco. Francisco started 2004 on a minor-league contract so his time on the Frisco roster that year wasn't an "optional assignment." He was added to the 40-man roster and called up to the majors in one swoop on May 17 that year and spent the rest of the season in Texas. At no point in 2004 was he both on a 40-man roster and also assigned to a minor-league roster, so no option was used. In 2005, though, an option was expended to send him to the minors.

Also important to remember is that a player with at least five years of major league service (MLS) can refuse any assignment to the minor leagues, including an optional assignment. These situations are rare, as a player with five years of MLS is unlikely to still have an option remaining, but the Newberg Report's Jamey Newberg astutely found one in Tim Crabtree in 2000. Crabtree reached five years of service 71 days into the 2000 season, and from that point forward had the right to refuse a minor-league assignment. This right is guaranteed by the Collective Bargaining Agreement in Article XIX(A)(2)(a).

Finally, a player on the major-league disabled list can be sent to the minors for a rehab assignment that doesn't expend an option. In fact, players on the major-league disabled list cannot be assigned to the minor leagues by any means, including an optional assignment, by virtue of a right guaranteed the players in the CBA (Article XIX[C][1]).

Hopefully you're still with us, as that's it. A player with a 40-man major league contract can be optioned down to the minors a limited number of times. As tricky as it is to calculate everything out, the basic principle is straightforward. Of course, if a team has no options remaining on a player and they want to send him to the minor leagues they need to pass him through outright waivers, but we'll leave that can of worms for our next piece.

Jamey Newberg's Transactions Hornbook from the 2006 Bound Edition of the Newberg Report was an invaluable source for this article.

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