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How Do August Waiver Trades Work?

Every year there is a ton of hype surrounding the trade deadline, but the big misconception is that teams can no longer make trades after 4:00 PM on July 31st.  Teams can, in fact, make trades after the July 31st deadline.  It’s just not as simple.

The big advantage to making deals prior to the July 31st deadline is that there are no restrictions on deals that can be made.  Teams can trade with any other team, and for that reason, teams can try to maximize the value of the return for their players on the market by selling to the top bidder.  That luxury is removed after the July 31st trade deadline.  Teams are limited to making deals based on the waiver system, and the numerous scenarios that make it difficult to deal in August.  Before I list some of those scenarios, let me first explain how trades work in the month of August.

The Process

August trades are made through revokable waivers.  Any player on the 40-man roster can be placed on revokable waivers.  If the player clears waivers, he can be traded to any team, without restrictions.  If the player is claimed by another team, then his original team has a choice to make:

-They can let the player go to the claiming team, with the new team assuming the remainder of that player’s salary.  We’ve seen this in previous years, specifically when the Chicago White Sox claimed Alex Rios from the Toronto Blue Jays.

-A team can also pull their player back from waivers if he is claimed.  The team keeps their player, although they lose the right to place that player on waivers again.  If a player has previously been pulled off of revokable waivers, and he is placed on waivers again, the team has no choice but to give him up to any claiming team.

-The original team can also work out a trade with the claiming team, which is something that happens frequently.

Note: Players who are not on the 40-man roster don’t have to be passed through waivers.

Priority

The claim priority is based on league, and the current standings.  Using the Pirates as an example:

-They currently have the 10th priority in the National League

-Any player waived by a National League team would have to pass through the nine teams ahead of the Pirates

-Any player waived by an American League team would have to pass through every AL team, and the nine NL teams ahead of the Pirates

Mass Waivers

You’ll hear a lot of rumors about players being placed on waivers.  Pretty much every player in the majors will be placed on waivers this month, with almost all of them being drawn back.  Some teams place their entire 40-man roster on waivers, to try and disguise who they’re actually looking to pass through waivers.  Some teams are looking to place players with big contracts on waivers, just hoping that another team will be willing to assume the salary.  Just because a player is on waivers doesn’t necessarily mean the player is being shopped.  And just because a player is claimed, doesn’t mean he will be traded.

Blocking Deals

Sometimes you hear about teams blocking other teams from making moves.  For example, say the Milwaukee Brewers are looking for relief pitchers.  The Pirates, with the higher priority, could claim every relief pitcher that passes through waivers, essentially blocking Milwaukee from making any upgrades.  The risk taken here is that there’s no guarantee that the Pirates don’t get stuck with a ton of unwanted relievers.  The higher priority can serve as an advantage if two teams are looking to upgrade the same position.  For example, if Milwaukee and Pittsburgh are both looking for bullpen help, the Pirates will have the priority as long as they are behind Milwaukee in the standings.

Trade Values

The value of trades goes down in August, mostly because teams don’t have much negotiating power.  They can only make a deal with one team, and they are limited with what they can receive in return, as they can only trade for players who reach them on waivers, or who aren’t on a 40-man roster.

Trade Examples

To give you a better idea of how the process works, here are a few examples of the various types of trades that can be made:

A Player on the 40-Man for a Player on the 40-Man

In any trade where teams are trying to swap two (or more) players on the 40-man roster, those teams have to make sure that the players reach their destination.  If the Pirates and the Marlins decide to make a swap of Player A and Player B, the Pirates have to hope that Player A passes through to Florida, while the Marlins have to hope that Player B passes through to the Pirates.  All it takes is for one player to get blocked to prevent a deal from happening.  Normally there is a gentleman’s agreement in place, although there can be some blocked deals.  That’s especially true if you have a situation like I mentioned above, where two division rivals have the same need.

Example: When the Pirates traded Brian Giles in 2003 to the San Diego Padres, they received Jason Bay and Oliver Perez, who were both on the 40-man roster for San Diego.  Getting Giles to the Padres wasn’t hard, as they had the number one waiver claim.  However, Bay and Perez had to pass through three other NL teams before they could go to the Pirates.

A Player on the 40-Man for Prospects

Once a team claims a player, they can try to trade as many prospects as needed to get the other team to release that player, provided the prospects aren’t on the 40-man roster.

Example: Pretty much 90% of the deals that go through.

So there you have it! The July 31st trade deadline has passed, but teams still have until August 31st to make a trade.  They can actually trade beyond August 31st, but only players acquired prior to September 1st can join the playoff roster, making September trades rare.

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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 AccuScore.com, 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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  • Anonymous

    Excellent post…although, while it’s “revoke”, it’s “revocable” (or “irrevocable”) waivers.

  • Anonymous

    Thanks for explaining this.  That is one thing that makes your site stand out, you explain these things that to even seasoned baseball fans just don’t understand or have never heard explained.  Props to you Tim.

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