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July 1, 2010

Contractual Matters

Optional Waivers

by Jeff Euston and Eric Seidman

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When Scott Mathieson made his major-league debut approximately four years ago, the Philadelphia Phillies were a very different team. David Bell played third base, Aaron Rowand patrolled center field, and the three-headed monster of Mike Lieberthal, Sal Fasano and Chris Coste were the catchers. Mathieson, a 22-year old flamethrower, had shown plenty of promise but was still in need of some seasoning, which made things all the more disappointing when he fell prey to the injury bug and had to go under the knife for surgery on his ulnar collateral ligament in his elbow. The road back has been tenuous, as rehabilitation was stunted by the need for a second Tommy John surgery. After successfully rehabbing from the second surgery, Mathieson found himself a minor-league reliever with fans clamoring for his presence on the big club’s roster.

Suffice to say, after a call-up in the middle of June, those with dreams of his heater shutting down the opposition were thrilled. Those same people were all the more surprised when, just two days later, the story broke that Mathieson was no longer welcome in the majors for the time being. Unfortunately, the stories that reported his demotion teased curious readers by offering simply that Mathieson had been designated for assignment rather than optioned, and not informing anyone how or why the move was made, or how or why it made sense. Mass hysteria ensued—or at least as much as can occur via Twitter—with fans clamoring for the head of Phillies general manager Ruben Amaro, Jr, until explanations began to surface.

Seeing as this type of confusion, or confusion with regards to the various forms of waivers in general is fairly common, we figured it was time for an explanation on each, noting how they work as well as requirements and examples of each. There are four main types of waivers to discuss: outright, unconditional release, trade assignment, and optional, the latter of which applied to Mathieson, and resulted in the Phillies utilizing a seldom-used method to buy more time before deciding to officially use an option on their reliever.

A waiver, from as broad a standpoint as is possible to explain, is a permission from other clubs to trade or assign the contract of a player. A club files a request with the commissioner’s office, making the player available to be claimed by the other 29 clubs. Once this request is granted, a waiver is valid for a limited time period. Without further ado, here are the tasty flavors.

Outright Waivers

A club wishing to remove a player from the 40-man roster but keep him in its minor-league system must first place him on outright waivers. Outright waivers are not revocable, so a player claimed on outright waivers may not be pulled back by his original club. For those unfamiliar with the term, revocable means that a claimed player can be pulled back; irrevocable means the exact opposite.

If the other 29 clubs decline to claim the player, his club then may assign him outright to the minor leagues. The Yankees used this process last week in sending backup catcher Chad Moeller to Triple-A Scranton/Wilkes-Barre. He was placed on outright waivers, but none of the other 29 teams put in a claim. After the 48-hour time period expired and nobody expressed interest, Moeller was deemed to have cleared waivers. At that point, the Yankees could send him to the minor-league affiliate of their choosing.

A club may not request outright waivers on a player with a complete no-trade clause or the right to veto a trade as a veteran with 10 years in the majors, including five with the same club. Alex Rodriguez, for example, cannot be placed on waivers given the no-trade clause. Neither can A.J. Pierzynski, who garnered 10-and-5 rights in the middle of June.

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 becomes a free agent and forfeits the remaining money left 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, with his original club responsible for his contract, except the pro-rated portion of the minimum major-league salary of $400,000 if he signs with another club that season.

Veteran right-hander Jeff Suppan cleared release waivers earlier this month before signing with St. Louis as a free agent. This means that the Brewers decided to release Suppan, and placed him on unconditional release waivers. Though he was available to be claimed, nobody put in a claim for his services, so his ability to accept or reject the claim became moot. Just because no team claimed Suppan does not mean nobody had interest. Obviously, the Cardinals had some interest in his services, but by chancing that nobody would put in a claim, rendering Suppan a free agent, the Cardinals were able to bring their former playoff hero aboard at the pro-rated minimum, as opposed to absorbing his entire contract through an accepted claim.

Trade Assignment Waivers

Trade assignment waivers are utilized in August, and occasionally September, in order to gauge trade interest. Between Aug. 1 and the end of the season, a player may not be traded without first clearing trade assignment waivers. If the player is not claimed within 47 business-day hours, he may be traded to any club. If the player is claimed, his original club has three choices:

 

  1. Revoke the waiver request and pull the player back
  2. Work out a trade with the claiming club within 48 ½ business-day hours
  3. Allow the claiming club to take the player and his current contract for a $20,000 fee

This was the scenario that unfolded last August when the White Sox submitted a claim on Toronto’s Alex Rios. With six years and $61 million left on Rios’ contract, the Blue Jays simply let him go to Chicago. The Blue Jays received nothing tangible in return as far as players go, but were able to completely wipe Rios’s contract from their books.

Optional Waivers

Optional major-league waivers are required when optioning a player who is more than three calendar years removed from his first appearance on a major-league roster. This procedure allows a club to send a player to the minor leagues while keeping him on the 40-man roster. Because optional waivers are revocable, players usually clear in this scenario. In the unlikely event a player is claimed, his club may not option him to the minor leagues, and any subsequent waiver request during the same period becomes irrevocable.

Applying these rules to Mathieson, who was eligible for optional waivers having appeared in the bigs back in 2006, the Phillies designated him for assignment and requested optional waivers for him; nobody put in a claim, and if they had, the Phillies could have simply pulled him back. Of course, this would mean that he could not be optioned back to the minors, and if they decided to request waivers for Mathieson later in the season, he could not be protected under revocation.

The Phillies experienced a roster crunch when Carlos Ruiz went down with an injury to his head, but the prognosis was unclear as far as a stint on the disabled list goes; the Phils needed to recall another catcher, but without putting Ruiz on the disabled list, they needed to free up another spot. Mathieson was the odd man out, and so while they had no intention of getting rid of him, replacing him on the roster through a designation for assignment enabled them to call up Dane Sardinha immediately without waiting through the 48-hour waiver window.

Mathieson is not the only player to be run through the procedural thicket of optional waivers this season. Both Matt Chico of the Nationals and Scott Atchison of the Red Sox were subjects to the same thing in separate instances of the relatively rare situation. The Nationals recalled Chico for a Saturday night spot start on May 8, his first start in the majors in more than two years after undergoing Tommy John surgery in 2008. The left-hander, who began the season at Double-A Harrisburg, allowed six hits and two runs while whiffing three in five innings as Washington defeated Florida 5-4.

Though Chico had an option year remaining, he was more than three years removed from his first appearance on a big-league roster. That made it necessary for him to pass through optional waivers before the Nats could return him to the minors. But the Nationals faced another obstacle. It takes 48 hours for a player to clear optional waivers, and Washington had recalled him for only one day. In other words, they needed to free up his roster spot immediately but were required to wait another day before learning if Chico had actually cleared waivers and, in the process, become eligible to be demoted.

The Nationals had to resort to one more transactional layer, by designating Chico for optional assignment. This allowed Chico to be replaced on the active roster for the very next game, and allowed the Nationals to postpone the 48-hour window until Monday.

Boston faced a similar roster crunch in May as center fielder Mike Cameron was returning from injury. To make room on the roster, the Red Sox had decided to designate outfielder Darnell McDonald for assignment. However, when left fielder Jacoby Ellsbury experienced soreness in his side after a session in the batting cage, Boston chose to cancel McDonald’s travel plans at the last minute and keep him on the roster. Instead, the Red Sox designated Atchison for optional assignment and sent him to Triple-A Pawtucket. Atchison has since been recalled and has struck out 20 in 24 innings for the Red Sox.

There are three separate optional waiver periods, and optional waivers are unavailable from the end of the season until Feb. 15:

  1. From Feb. 15 to the 30th day of the season
  2. The 31st day of the season until July 31
  3. After July 31 but up to Oct. 1.

Unfortunately, when a player is placed on waivers, easily available transaction data tends to provide little information aside from the word ‘waivers.’ As we have shown through examples and definitions throughout the course of this article, ‘waivers’ is not an all-encompassing term; there are various forms, with rules and requirements to each its own. Next time you hear of a player being placed on waivers, inquire about which type, as it may be the difference between a calm afternoon and one of mass hysteria, at least in the Twittersphere, over the confusion of a player deserving of a major-league spot seemingly being released.

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

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

BP Comment Quick Links

D1Johnson

Thank you for this explanation. This is an area that I frequently found confusing and was too embarrassed or lazy to pursue an answer. I am still not certain I completely understand all of nuances in my first reading, but I appreciate your examples.

Jul 01, 2010 12:42 PM
rating: 0
 
LouisArighi

Thank you, Jeff, this is a great explanation of the various forms of waivers. "Options" would be another great topic: as an A's fan, there was long discussion on athleticsnation.com about whether or not Jake Fox had an option remaining. Apparently it was so confusing neither Fox nor the Athletics organization were 100% clear on it until the end of spring training.

Jul 01, 2010 13:00 PM
rating: 0
 
BP staff member Eric Seidman
BP staff

D1, Louis, feel free to ask us whatever questions are still looming. These are very confusing topics, for sure, and Jeff and I want to make sure we are as clear as possible.

Jul 01, 2010 13:13 PM
 
Tommy Fastball

So, why would the Braves and Mets not claim Mathieson? Seems like at worst they would force the Phillies into a more difficult roster situation and at best possibly poach a guy the Phillies didn't want to lose.

Jul 01, 2010 13:15 PM
rating: 0
 
BP staff member Jeff Euston
BP staff

Philadelphia simply could have pulled Mathieson back & made another move or gone with 24 players for a day or two. Also, there is something of a gentlemen's agreement not to make optional waiver claims. I'm not aware of even one example of a claim being made - probably because the corresponding move usually involves a bench player or the 10th or 12th man on the pitching staff.

A "blocking" claim is more likely when a club in the race is trying to acquire a difference-maker in August. But that's a risky strategy because of the chance the claiming team actually gets the player and his contract. The Padres learned that lesson in 1998, when they claimed Toronto's Randy Myers on trade waivers to prevent him from going to Atlanta. The Jays simply let Myers go to San Diego, making the Padres the proud owners of a $13 million reliever they hadn't really wanted.

Jul 01, 2010 14:10 PM
 
BP staff member Eric Seidman
BP staff

Yeah -- there is definitely a "gentleman's agreement" and when I said incredibly rare, I meant like, never happened.

Jul 01, 2010 15:03 PM
 
BP staff member Eric Seidman
BP staff

Tommy, situations like this are detrimental in the sense that, if the Braves or Mets were to do that, it's likely the Phillies would go out and claim anyone and everyone those teams put on optional waivers. It is incredibly rare for a player to be claimed on optional waivers, which is why this type of move is used as a "loophole" of sorts.

Jul 01, 2010 13:39 PM
 
hmamis



How many times may a player be optioned within a period of time?

hmamis

Jul 01, 2010 15:02 PM
rating: 0
 
BP staff member Jeff Euston
BP staff

Once added to the 40-man roster, a player has 3 option seasons during which his club may to move him to and from the minors without exposing him to other clubs. During an option season, there's no limit to the number a times the club may move the player up and down.

After the 3 options are used, the player is out of options. Beginning with the next season, he must clear waivers before he may be sent to the minors again. Also, a player with 5 years in the majors must consent to be sent down on an optional assignment.

A player may get a 4th option season if he has been optioned in 3 seasons but does not yet have 5 full seasons of professional experience.(A full season is 90 days on an active pro roster.)

Jul 01, 2010 17:46 PM
 
mcbellows

I've always wondered the order in which teams get to claim. I know it has to do with team record but is the record counted over the last 365 days,record in the current year, or something else. Thanks for your help.

Jul 01, 2010 15:35 PM
rating: 0
 
BP staff member Jeff Euston
BP staff

Any club may claim on a player. If multiple teams make a claim, priority depends on the type of waiver and the calendar.

For a player on release, option or outright waivers, priority goes to the team with the lowest winning percentage, regardless of league. (In the off-season and the first 30 days of the season, won-lost records from the previous season are used. After that, records from the current season are used.)

But for trade waivers, priority goes to the team with the lowest winning percentage within the same league. So American League clubs have priority for AL players, and National League clubs have priority for NL players.

Jul 01, 2010 18:11 PM
 
BP staff member Mike Petriello
BP staff

Here's a question, and I'm referring to Charlie Haeger here, who was out of options, passed through waivers unclaimed, and was outrighted to AAA. If the Dodgers recall him later in the season, and then wish to send him back to AAA again, he doesn't need to pass through waivers for a second time, right?

Jul 01, 2010 17:32 PM
 
BP staff member Jeff Euston
BP staff

Again, it depends on the calendar. An outright waiver is valid for only 7 days in the off-season and during the first 30 days of the season. An outright waiver secured after the 30th day of the season is valid through July 31. An outright waiver secured after July 31 is valid through the end of the season.

To use Chad Moeller as an example again, he was DFA'd and outrighted twice in 2008 - once in April and again in July. Each time, he cleared and was sent outright to AAA.

However, after being outrighted once in his career, a player has the right to reject a second outright assignment and elect free agency immediately or after the season. (LA's June outright of Haeger was his second, but he accepted the assignment.)

Jul 01, 2010 18:46 PM
 
dtung

If a player does not accept a second outright assignment and they elect free agency is the club still responsible for that player's contract?

Jul 01, 2010 20:25 PM
rating: 0
 
mdupske

I don't have a handy reference but I believe that for the first month of the season the previous year's final record (in reverse) is the determining factor and then the current record becomes the determining factor for the rest of the season.

Jul 01, 2010 18:48 PM
rating: 0
 
blw777

Thanks for an excellent and informative article on info that's hard to find elsewhere!

Jul 01, 2010 19:25 PM
rating: 0
 
BP staff member Eric Seidman
BP staff

You got it! Is there anything else you would like us to cover? Ideally we want to be able to put together something like this for the glossary that I am currently working on, so we have a handy-dandy resource, but to do that properly we need to know what you want to know!

Jul 01, 2010 19:29 PM
 
Richard Bergstrom

How do Rule 5 Draft picks interact with all four waiver types?

Jul 04, 2010 16:53 PM
rating: 0
 
OKGOJAY

"Optional major-league waivers are required when optioning a player who is more than three calendar years removed from his first appearance on a major-league roster."

I'm pretty sure i'm just reading or understanding this incorrectly, but the "three calendar years" isn't quite making sense to me. A player's first appearance on a major-league roster opens the door to optional assignments. Once on the 40 man roster, the first time they are sent down exhausts one of their "options" whether it is in the same year or the year after. As such, i'm not sure i understand the reference to the three calendar years.

I think a follow up to this article (or reference if previously written on) would be when players need to be added to the 40 man to protect against Rule V...how some get four years and some get five (international FA, etc.)...a kind of pre-cursor to this optional mayhem.

Jul 02, 2010 07:43 AM
rating: 0
 
Isaac Lin

See http://www.baseballprospectus.com/article.php?articleid=4700 for more information on optional assignments.

Jul 04, 2010 17:31 PM
rating: 0
 
Brian Cartwright

Thanks for the article, helps clear some things up.

One that confused me was on June 16 when the Pirates DFA'd Akinori Iwamura. With no further detail on the transaction, I assumed that he was being dropped from the 40 man roster. Seven days later, on June 23, it was reported that Iwamura was optioned to Triple-A. I was confused on whether he was optioned or outrighted. Apparently this was an optional waiver.

To OKGOJAY, there are three different seasons in which a player on the 40 man roster may assigned (optioned) to a minor league team, but there is a time limit to use those options. Hwoever, I thought that clock started on the date of the player's major league debut. Hopefully Jeff & Eric can clarify this.

Jul 04, 2010 13:56 PM
rating: 0
 
Richard Bergstrom

In regards to trade assignment waivers... "If the player is not claimed within 47 business-day hours..."

So does this mean that a team could put a player on waivers on a Thursday and Friday, allowing the player to hover longer over the weekend, in case they do get claimed?

Jul 04, 2010 16:51 PM
rating: 1
 
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