Adam Dunn, August Waivers, and the 2011 Draft

Adam Dunn

The Washington Nationals placed Adam Dunn on waivers today, which may sound like big news if you’re unfamiliar with the waiver system in August.  If you are familiar with the August waivers, you know that this is something that isn’t uncommon.  Almost every player gets placed on waivers in August, as the August waiver period is fully revocable.  The Pirates, for example, could place Garrett Jones, Andrew McCutchen, and Pedro Alvarez on waivers, with no risk of losing them.  So why would teams do this?  To explain this, we have to explain the August trading period:

-Any players on the 40-man roster have to clear waivers before they can be traded.  Any player not on the 40-man roster can be traded at any time.

-If a player is placed on waivers, any team can put a claim on him.  The order of preference goes in reverse order of this year’s standings, with the teams in the same league getting a shot at the player.  So with the Nationals placing Dunn on waivers, every team in the National League would get a chance at him, in order of reverse standings, before the worst team in the American League, currently the Baltimore Orioles, gets a shot at him.

-Any player who is placed on waivers can be pulled back off of waivers by his original team if he is claimed.  Teams have 48 hours to claim a player, at which point the winning claim is announced.  If a player is claimed, the claiming team can try to work out a deal with the original team.  The original team can either make a deal with the claiming team, pull the player back off of waivers, or allow the claiming team to just take the player, in which case the claiming team would assume the player’s full salary.

-A player can only be placed on revocable waivers once.  If a player is claimed, and the original team pulls him back, then tries to put him on waivers again, they lose the player for good (assuming he gets claimed the second time).

-Teams usually place their entire roster on waivers for two reasons.  One, they want to try and hide the players they are trying to get through waivers.  Two, they want to get an idea of who is showing an interest in their players.  If the Pirates place Ryan Doumit on waivers, and three teams put in a claim on him, the Pirates can pull Doumit back, and contact those three teams in the off-season about trading Doumit.

The Nationals have placed Dunn on waivers, and in this case they’re most likely going to try to deal Dunn away, as Dunn is a free agent following the 2010 season.  However, the Nationals won’t just let Dunn walk for nothing.  Dunn will be a type A free agent following the season, which means he could potentially fetch two first round compensation picks in the 2011 draft, a draft which is very loaded with talent.

The Pirates currently have the first priority on Dunn, as they have the worst record in the National League.  Prior to the trade deadline, Washington’s demands for Dunn were pretty lofty.  They were requesting names like Gordon Beckham from the White Sox, or Edwin Jackson, and the Pirates don’t have or can’t afford to give up talent like that.  However, that was before the deadline.  It’s a totally different story after the deadline.  If the Pirates put in a claim on Dunn, the Nationals have limited options.  They can either work out a deal with the Pirates, or keep Dunn and determine whether they want to go to arbitration with him.

Now let’s say the Pirates claim Dunn, and try to work out a deal with Washington for him.  What price would they have to pay?  The Nationals are either looking at two choices: a trade return from the claiming team, or two first round compensation picks.  The thing about the compensation picks is that they aren’t guaranteed.  So many things can happen in that situation.

-Dunn could accept arbitration, putting Washington in line to pay Dunn a raise over his $10 M salary in 2010.

-The team that signs Dunn could have a top 15 draft pick, which means Washington would only get that team’s second round pick as compensation (they would also get a pick from the comp portion of the first round regardless of what team signs Dunn).

-The team that signs Dunn could also sign another type A free agent that is rated better than Dunn, which would give the Nationals a second round pick from that team (as the first round pick priority goes to the team who lost the highest rated talent).

So while Washington could be looking at two compensation picks, the Pirates don’t necessarily have to beat that value, as the compensation picks aren’t guaranteed.  The question is: can the Pirates afford to give up prospects at this stage in their rebuilding process?

I talked today about the 2011 roster crunch, including all of the players who are eligible for the 2010 Rule 5 draft in the Pittsburgh farm system.  Tomorrow I will go over how the Pirates can make room for these players, but in short there are going to be some players who the Pirates might have to risk losing in the Rule 5 draft.  From that list, the only guys I’d make untouchable are Rudy Owens, Jeff Locke, and Starling Marte.  The rest of the list could be used as trade bait.

The Pirates could make guys on the 40-man roster available, but there’s no guarantee that those players would reach Washington.  The Nationals have the fourth waiver priority for Pirates’ players, ranked behind Arizona, Chicago, and Houston.  There usually exists a gentleman’s agreement not to block a deal from happening, so there’s a good chance that the Pirates could get a prospect on the 40-man roster through waivers.

At this point, I don’t think Dunn would cost the Pirates much, as the Nationals would be looking at three scenarios:

1. Keep Dunn, offer him arbitration, and get the comp picks when he leaves

2. Keep Dunn, offer him arbitration, and watch him accept arbitration

3. Trade with the Pirates and take the guaranteed prospects, while avoiding the risk of Dunn accepting arbitration

So why would a move make sense for both sides?  Washington would be guaranteed to get some prospects for Dunn, without risking going to arbitration if he accepts their offer.  The Pirates could get some value for their potential Rule 5 additions, without risking losing them for nothing come December.  Either the Pirates would get two additional compensation draft picks in the strong 2011 draft, or worst case scenario, Dunn sticks around and they add a very strong bat to the lineup.

That wouldn’t be a bad thing either.  Putting Dunn in a lineup with Andrew McCutchen, Pedro Alvarez, Jose Tabata, and a platoon of Lastings Milledge and Garrett Jones would really strengthen the offense.  The Pirates definitely have the payroll room to make such a move, and this is one of the only ways they could manage to attract such a player at this point in their rebuilding process.

The Pirates are in the driver’s seat, and actually might have some prospects to spare.  They would put themselves in a position where they either get two comp picks in the strong 2011 draft, or a powerful bat to add to the 2011 lineup, and the worst case scenario is that the Nationals decide to keep Dunn.  The chances of this happening are very unlikely, but it’s a nice subject to think about.

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Tim Williams

Tim is the owner and editor in chief of Pirates Prospects. He started the site in January 2009, and turned it into his full time job during the 2011 season. Prior to starting Pirates Prospects, Tim worked with, providing MLB, NHL, and NFL coverage to various national media outlets, including ESPN Insider, USA Today, Yahoo Sports, and the Wall Street Journal. He also writes the annual Prospect Guide, which is sold through the site. Tim lives in Bradenton, where he provides live coverage all year of Spring Training, mini camp, instructs, the Bradenton Marauders, and the GCL Pirates.

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  • Erik Johnson

    Why would we claim Dunn when there is little chance that he would sign here long-term?

    • Tim Williams

      Because if he doesn't accept arbitration, you potentially get two first round compensation picks in a very strong 2011 draft.

      • Erik Johnson

        Yes, but you used that as a reason for Washington not keeping him also.

        If it's better for the Nats to take “known” commodities from the Pirates instead of hoping for favorable pick compensation, then why is the opposite better for the Buccos? As you mentioned, it's quite possible that the Buccos would get stuck with supp and 2nd round pick, rather than a mid-to-late first rounder and a supp.

        • Tim Williams

          It's better for the Pirates because they have some prospects that they are at risk of losing. They've got at least 8 players who need to be protected for the upcoming Rule 5 draft. Who knows if they'll protect all of those guys? Rather than risk losing some in the Rule 5, you can include them for Dunn, and eventually get comp picks in return.

          Basically you're trading guys who you might lose in the Rule 5 draft, and eventually getting back two compensation picks. Of course, a big key would be Washington's Rule 5 situation. I'm assuming here that they don't have the same roster crunch issues the Pirates will face (which is possible, since they didn't make a ton of trades in the last two years to bring this roster crunch on).

  • Stealing First Base

    I would like this move for the Bucs. We don't really have a first baseman in the system that will be a long-term solution, and Dunn would be better than any of the other short-term solutions. After we get someone to man first (or move Pedro there if we get someone like Rendon), we flip Dunn for someone else.

  • Tim Williams

    Because if he doesn't accept arbitration, you potentially get two first round compensation picks in a very strong 2011 draft.

  • FlapJacks

    I like this idea even if its very unlikely to happen. We need his bat badly, and at worse we dump a couple of guys that we might let walk anyways with a chance for more high draft picks.

    Sounds like a win-win to me.

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