First Pitch: How Do August Waiver Trades Work?

Today the trade deadline passed, and for the second year in a row the Pirates didn’t make a move. The deadline was a strange one, as the majority of the trades that were made featured Major League talent going for Major League talent, rather than prospects for established players. While the Pirates didn’t make any moves at the deadline, they will look internally for some upgrades. A big misconception in the past is that teams can’t trade after the deadline. Obviously, as Pirates fans saw last August, you can make deals after July 31st.

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 in 2009, taking on the remaining $60 M of his salary.

-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. This is how the Pirates got Marlon Byrd, John Buck, and Justin Morneau last year.

Note: Players who are not on the 40-man roster don’t have to be passed through waivers. Also, players who are on the 40-man roster, but in the minor leagues at the time of a deal, can be traded as a PTBNL. They just can’t be called up to the majors by the trading team after the deal is made, and they can only be dealt after the season, when the waiver process expires.

Priority

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

-They currently have the 9th priority in the National League.

-Any player waived by a National League team would have to pass through the 8 teams ahead of the Pirates.

-Any player waived by an American League team would have to pass through every AL team, and the 8 NL teams ahead of the Pirates.

The Pirates are in the middle of the pack in the NL, which from a waiver claim perspective is much better than where they were last year after the deadline.

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.  There are some players who have cleared waivers already this season, which was the case with Jose Tabata before he was outrighted to Triple-A. 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 Pirates are looking for a bullpen arm.  The Reds, with the higher priority, could claim every bullpen option that passes through waivers, essentially blocking the Pirates from making any upgrades.  The risk taken here is that there’s no guarantee that the Reds 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 St. Louis and Pittsburgh are both looking for bullpen help, the Pirates will have the priority as long as they are behind the Cardinals in the standings. The irony with all of this is that the Reds would have had a perfect chance to block the Pirates from getting Marlon Byrd last year, and instead they let him slip through waivers to the Pirates, who needed a right fielder.

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 Miami, while the Marlins have to hope that Player B passes through to Pittsburgh.  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 under the same waiver rules, but only players acquired prior to September 1st can join the playoff roster, making September trades rare.

Links and Notes

**Prospect Watch: Jose Osuna Extends Hitting Streak to Ten Games With a Two Homer Night

**Pirates Can Turn to Waiver Trades, But Expect Most Help to Come From Within

**Pittsburgh Pirates Claim Right-Handed Pitcher Angel Sanchez, Josh Wall DFA

**Prospect Highlights: Lambo Homer, Mathisen Triple, RBI Hits From Bell and Allie

**Minor League Schedule: Luis Heredia Has Seen His Strikeout Totals Drop Significantly

Tim Williams

Author: 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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  • emjayinTN

    Tim: Thanks for the info. I was not saddened that the Pirates did not give a lot of prospects for very, very short term gains, but somebody like David Price would have been an interesting possibility. I like both Smyly and Franklin and do not know a lot about Adames, and I think the Rays got a good return. I think the Pirates right now are a solid group that can be a lot better if we get some input from guys like Alvarez, Marte, and the 1B combo. On the pitching side, having Morton and Locke struggling at the same time is not helping, and hopefully Gerrit Cole can lead us down the stretch. Liriano is starting to build his resume for free agency, and Worley could be a difference maker.

    • emjayinTN

      Just checked and Adames was the guy that Andrew Friedman was after from the very beginning that had to be a part of the deal. Just 18 and a strong hitting Shortstop, and the #3 Prospect of the Tigers, he is playing very well at Lo A, and should progress quickly. Leads his team in triples and is tied for 2nd in HR’s and RBI’s, and I think this is his first full season in the US. So, instant help from Smyly and Franklin, and Adames in the middle infield in 2 or 3 years – another nice deal by Friedman.

    • http://battlingbucs.wordpress.com battlingbucs

      Assuming the Rays would have been willing to accept a prospect package I think a Pirates equivalent would have been something like Bell, Kingham and McGuire.

      Franklin was a Top 50 prospect last year and though he lost some of his perceived ceiling he has a nice high floor. Bell has more upside but is more of a risk.

      Smyly appear likely to settle in as a mid rotation arm. Kingham projects to do the same with a tad bit of potential upside but he isn’t proven in the major leagues so of course he comes with risk.

      Adames is an 18 year old in A ball at an important defensive position who is holding his own. To me that sounds pretty similar to McGuire.

      The package I suggest has more upside but since they are prospects they have inherently more risk. Just my guess but that feels right to me.

      • jricentral

        Price is expected to make around $20M next year. That alone was a big obstacle for the Bucs. If the Pirates were really in the mix for Price, I always assumed they wanted Tampa to take on Tabata and his $5M 2015 salary, to make Price’s salary more manageable. Of course it would have been Tabata, plus a couple of Top prospects, so Tampa would get some good value from the trade.

      • pilbobuggins

        According to peter gammons , who is one of the few guys I actually listen to and give a ton of credibility to, the pirates had a better offer talent wise on the table than the one the rays accepted. Add that to reports here in the tampa area that price wanted to go to an established contender. That means the deal was nixed because price is probably going to get a contract offer this off season from the tigers, the chances of price getting any contract offer from the pirates is slim to none. So the rays front office took a deal that was not as good to give a guy they really like a better shot at a big money contract. I know there are a lot of you who will disagree with me, I don’t really care, nine times out of ten what I say is right, even though it does not fit your narrative right now, time shows that I am usually right.

      • emjayinTN

        bb: Bell, Kingham, and McGuire are close examples but Smyly and Franklin have been in the majors already with mixed results. Smyly was an excellent LHSP in the minors, but the Rotation was full in Detroit. Therefore, they placed him in the BP and he responded with one of the best seasons in the majors last year with 63 appearances, 76 IP, 81 K’s/17 W’s, 2.37 ERA. Franklin was called up last year by Seattle and had 369 AB’s and only hit .225. But, he is a switchhitting MI who had 20 doubles and 12 HR’s last year, so he was not that overmatched. His problem was that Seattle had all but designated Brad Miller as the next Seattle SS, and Cano bumped him from 2B, and Seager is at 3B. Kingham and Bell have never been in the majors, and I think Friedman wanted something now players/pitchers in addition to something later.

  • jaygray007

    So we have 1 month to get Lester from Oakland

  • wkkortas

    “revocable”

  • impliedi

    Tim, nice write-up! I thought I understood the waiver process, but now I’m confused about one particular point: you mention that if a player is placed on waivers and another team claims him, and the original team pulls him back, he can’t be placed on waivers again. I assume that’s only for that season and only for the time from July 31 to the end of the season. Is that correct? Or am I confusing something??

    • S Brooks

      He can be placed on waivers again, he just can’t be pulled back a second time, so the claiming team with highest priority would get the player, presumably with no compensation to the waiving team (since you can’t pull him back, you have zero leverage to work out a trade).

      The revocable waiver period runs August 1 – end of the current season, correct.

      It can get confusing because there are 3 different kinds of waivers – unconditional release, irrevocable outright and revocable major leagues. Wandy was waived under the unconditional release waivers. Tabata, Mazzaro and Ishikawa, for example, were waived under irrevocable outright waivers. Revocable waivers exists only for the sake of trading/assigning a major league contract to another team, whether via trade or claim, and only applies to the next two months.

      • impliedi

        Awesome! Thanks for the explanation!

        • impliedi

          And, yeah, sorry, I knew he could obviously be placed on waivers again, but you answered what was my intended question of not being able to pull him a second time.

      • impliedi

        I guess my other question is this: who is this rule protecting, why does it exist??

        The only thing I could guess is to eliminate the possibility of one team “lending” its players out to help another team in the stretch run or allowing teams to stockpile players for the last month or so.

        For instance, I guess without the waiver rule in August and September, the Cubs (who hate the Cardinals and the Brewers) could trade the Pirates every good player on their team for Brent Morel for the month of September so that they can win the Central, with the understanding that the Pirates will trade them all back to them the day after the season is over. The waiver rule would stop this kind of stuff from happening.

        • S Brooks

          I think I recall hearing that it was first instituted as a way of making it more difficult for players to jump leagues, actually. I could be completely wrong on this, but if I remember correctly, the NL instituted a waiver rule that applied to the whole season that gave all the other NL clubs first crack at trading for or claiming its waived players, so that the AL could only get the guys no NL club wanted. That part of the waiver rule – the player’s current league gets priority – still stands today.

          Over time and collective bargaining negotiations, it was liberalized so that for all but 2 months of the year you could trade a player without passing him through waivers.

          But I think you’re onto something with respect to shenanigans – that may not have been the reason the waiver rule was instituted, but I’m sure it has played some small part in keeping it around.

  • http://www.acme-tv.com LongJohnSilver

    If there is an outside chance of collusion in MLB, its the waiver wire trades. My opinion only.

    • wkkortas

      I think it’s understood that there can be a you-don’t-block-me-and-I-won’t-block-you-mindset that operates in many cases.

  • bucsws2014

    Assuming Neal puts everyone on waivers this month, what team would be the likely favorite to put in a claim on Pedro?

    • S Brooks

      You could see up to 20 teams put a claim in on Pedro. He’d be fine in the AL as a mostly-DH, and there are some NL teams with a hole at the position due to recent trades (San Diego, Arizona) that would willingly take on his salary in the interest of rehabilitating him and betting that the bat will come around to what it was in ’12 and ’13.

    • pilbobuggins

      Sugarland skeeters

  • smurph

    I really don’t understand why they have to make this so complicated. Between these rules and the rules for player control and arbitration, I am getting a major headache.

    • http://www.acme-tv.com LongJohnSilver

      Agree. They should just make the trade deadline August 31, and forget all this waiver nonsense. By the middle/end of August, teams have a better idea if they are really in the race or not, so more sellers would be available and perhaps trades less costly.

      I can give you a couple of Tylenol is you wish :) I took some yesterday :)

      • pilbobuggins

        Send me a couple I’ve been going through a lot lately and am all out.

  • pilbobuggins

    The way the waiver wire works is when you realize that the player or players you should have traded for in july are not available in august you then hope and pray that a player who is worth a darn is first put on waivers and then passes every team below you then you claim him and hopefully make the trade you should have ponied up the chips for in july. In other words it’s a darn I shoulda done this when I had the chance moment.doh!

  • https://profiles.google.com/100212786463678215436 Nathan Swartz

    For all you Carp fans (Carpathians?) he was DFA’d.
    For you folks wanting to unload Pedro, wait til the offseason, it’ll happen.
    Maybe we can trade him to the Mets for Vic and Dilson. :)