How MLB Waivers Work

Reprinted from Eric Seidman’s original article in 2012.

The trade deadline has come and gone but trades can still be made. Perhaps the trade deadline itself should be named differently to assuage the notion that teams can no longer make deals after it passes. All that has realistically changed is the ability to unilaterally make moves. Teams cannot deal directly with one another the way they could before July 31, as players must first pass through the waiver wire before a trade can materialize.

Waivers can be confusing given the rules and different types, but don’t mistake the various forms with how the actual waiver wire works from here on out. The concept itself is fairly simple, and while none of us will ever be 100 percent versed in the minutia, hopefully this here primer can shed some light on how teams will make moves over the rest of the season.

Broadly, the waiver wire comes into play after the deadline for two reasons:

1. To improve parity by giving poorer teams first dibs to improve
2. To ensure teams cannot unload players via some secret pact to help another

The second reason occurs in fantasy sports as well, where a last place team might trade some of its best players to a fringe contender in order to aid that owner’s chances of winning. Of course, real baseball is played on a much larger scale, but the idea remains the same. As for parity, well, it makes sense if a league-wide goal is to improve competition.

Most players are made available via the waiver wire even if the team has no intention of trading them. Sometimes teams do this to try and mask a player they want to move by surrounding him with plenty of other names from their roster. Other times, a team will gauge interest in an all-star caliber player to get a sense of what teams might be willing to offer if he were seriously available. There is no risk in placing someone on waivers because these are revocable, meaning the team can revoke a claim and pull the player back if they want to keep him on their roster. For instance, in 2012 the Phillies placed Cliff Lee on waivers, and a big deal was made over nothing. Him, and guys like him, are always placed on waivers. Even if someone claims him, the Phillies will likely just pull him back, no harm done.

Teams can place up to seven players per day on waivers, after which they remain on the wire for two business days. When claims are put in — it is a computer network of sorts where teams merely have to click a button to claim someone — the worst teams have first dibs, but preferential treatment is given to teams in the same league as the player being claimed.

If Carlos Santana was placed on waivers, and the Yankees claimed him, they wouldn’t get to work out a deal or absorb his contract unless he passed through all other National League teams.

If a player isn’t claimed by any team in either league, then he is free to be traded to anyone through the end of the World Series. In that sense, think of non-claimed players the way you would think of any trade that occurs prior to the deadline.

He can be dealt anywhere because the purpose of the waiver wire was to give every team a fair shot at acquiring him, and nobody acted accordingly.

If a player placed on waivers is claimed by only one team, then there are three options. The most common is that the employing team will exercise their revocable rights and pull him off the wire. Another option is to simply let the other team absorb the player and his contract. (While the original team placing the player on waivers can pull him back when another team issues a claim, the revocable rights do not extend to the claiming team.)

In other words, if the Phillies place Jake Arrieta on waivers and the Orioles claim him, the Phillies can decide to just let the Orioles absorb him and become liable for the entirety of his contract. The Blue Jays did this with Alexis Rios, where the White Sox put in a claim, and instead of working out a trade they just let him and his contract go directly.

The third option is then to work out a trade with the claiming team. If a team wants to trade a player as opposed to just letting him and his contract go to another team, they can threaten to pull him back off of waivers unless the claiming team agrees to make a traditional trade. This is literally the same as making a trade before the deadline, with the caveat that the deal can only be made with the claiming team. Otherwise, it’s the same type of deal where prospects or major leaguers are dealt for one another (as long as they have cleared waivers), with teams perhaps kicking in money to sweeten the deal, and no-trade clauses being just as relevant.

Teams can only pull their players off of waivers once without sacrificing the revocable rights. If Ruiz hits the wire, the Yanks submit a claim, and the Phillies pull him back, then if he is placed on the wire later in the month he is no longer protected under the pull-back rules.

When multiple teams claim a player, the same three options exist, but the worst team in the same league gets acquisitional priority. It doesn’t work where the original team can choose among those submitting a claim. Further, claiming teams have no idea who else has submitted a claim until after the fact. The Phillies might put in a claim for a player they have interest in, even though other teams higher up on the priority list have done so as well. Had the Phils known that the Diamondbacks were also putting in a claim they might not have issued their own, but the nature of the wire doesn’t avail itself to this information.

The next logical topic is why teams would submit claims, for which there are two answers: to acquire a player in whom they have legitimate interest, or to block a rival from bringing in a player that would help their cause. Examples of the former would be when the Phils acquired Matt Stairs and Scott Eyre. Both were placed on waivers and fell to the Phillies in the claiming process.

An example of the latter is Cody Ross during the 2010 season. The Giants and Padres were neck and neck in the NL West, and the first-place Padres had interest in the then Marlins outfielder. The Giants, who had a higher rung on the priority chain, put in a claim of their own primarily to prevent the Padres from acquiring him. Sure, they may have had cursory interest, but they already had about 32 outfielders on the roster, so the move clearly had blocking implications. Ironically, the Giants probably don’t win the World Series without claiming Ross that year.

Blocking can also come back to bite a team, as was the case when the Yankees claimed Jose Canseco in 2000, and when the Padres claimed Randy Myers earlier in the 90s. In both situations, the claiming teams were attempting to block a rival, but ended up absorbing hefty contracts since they couldn’t undo their claim.

These are trade waivers, which are revocable.

Other waivers are irrevocable, such as when a team decides to release a player, or when it tries to move one off of its 40-man roster. In these cases, if a claim is submitted, the original team cannot pull its players back. The players become the property of the claiming team. In order to release a player, he must first pass through these irrevocable waivers. Generally, teams don’t claim these players, because once released the original team is liable for all but the minimum of the player’s salary. Then again, claiming a player on release waivers can ensure the interested team brings the player in, so there is risk all around.

Optional waivers are different than trade or release waivers because they are revocable and can be used as a circumventory process to the 40-man roster. The Phillies did this with Scott Mathieson. By designating Mathieson for assignment, the Phillies were able to remove him from the 40-man roster while having ten days to decide whether to trade him, demote him, or release him. But since he had options remaining, he had to first pass through optional waivers, which are revocable.

According to a front office source of mine, there is an unwritten agreement among teams not to claim players placed on optional waivers, so there is no risk of a claim being put in. This results in basically a ten-day loophole where a spot on the 40-man roster is opened up and there is no risk at all in losing the player, even if he is designated for assignment.

For the purposes of what to focus on right now, though, the trade waivers are more important. The Phillies can still make moves even though the non-waiver trade deadline has passed. But just because someone is placed on waivers doesn’t mean he is going to get traded. It’s standard protocol to place most of the roster on waivers, as without doing so there is a 100% guarantee they can’t get traded. Since there is such little risk in placing players on revocable waivers, even the star players staying put are placed on them.