January 24, 2006

The BP Guide to Transaction Rules

From the Mailbag

by Thomas Gorman

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The last article in our series on transaction rules generated a lot of feedback, so today let's clarify some of the more confusing aspects of the option rules. First up is a note from reader S.T.:

Thanks for the article about options. There is one really strange case that confuses me.

Please take a look at Rick Ankiel's career and see if you think he was really out of options last year.

Unless they moved him to the 40-man roster in 1999 before his big league debut, it seems to me that 2001 would have been his first option year. He missed all of 2002 so 2003 would've been his second option year.

In 2004, he pitched 23 minor league innings over six games in what I thought was a rehab assignment.

If that is the case, shouldn't he have had a third option available last year? Why did he have to clear waivers to be signed to a minor league deal by the Cardinals?

Ankiel was added to the 40-man for the first time on 8/24/99 and his first option was in 2001. That one is clear enough.

The option in 2003 is also pretty clear. The info I have does confirm your suspicion that his 2004 stint in the minors was an rehab stint.

What I technically have for 2002 is that he was placed on the 15 day DL on 3/26 (end of spring training), taken off the DL on 6/5, and then optioned down to Peoria that same day. That's the last transaction for him in 2002.

Why didn't he pitch in the minors? No idea, but as far as MLB is concerned he was OFF the DL, on the 40-man roster, and assigned to the minor league squad for the rest of that year. That's an option according to the rules.

(We later found a St. Louis Post-Dispatch article that described Ankiel's confusing 2002 minor league assignment to Class A Peoria. Ankiel was on the roster and warmed up for several appearances, but was never used in a game. Unfortunately for the Cardinals, you don't have to get into a game to burn an option!)

The nest note is from reader Lu:

There might be a good example of 'players with at least 5 year MLS can refuse an assignment to the minor league.' Jason Giambi of the Yankees was rumored to refuse such an assignment last year before he returned to form. He was drafted in 1992, spent '93 and '94 in the A's minor league system, then made the major league roster by the summer of 1995 and stayed in the majors for good. There were only two optional assignments expended in his case.

By 2005 Giambi surely had more than 5 years of major league service time, but he still has an option left.

That's a very good example of a player with 5+ years of Major League Service invoking his right to refuse a minor league assignment. How about this fun fact that a club official passed along to me: If the Yankees had successfully moved Giambi to a minor league roster they would have saved $37,000 a day on their luxury tax bill!

There's something I still don't understand, though. You say that 'a player with at least five years of major league service (MLS) can refuse any assignment to the minor leagues, including an optional assignment. These situations are rare, as a player with five years of MLS is unlikely to still have an option remaining, but the Newberg Report's Jamey Newberg astutely found one in Tim Crabtree in 2000.'

I don't understand, I would think it would happen all the time. For example, Huston Street: drafted 2004, on the major league roster all year in 2005. Assuming he is never sent down again, won't he reach five years of MLS at the conclusion of the 2009 season, having used up none of his three options? At that time, wouldn't his remaining options be effectively voided when the CBA's right of refusal trumps the options rule? You yourself mentioned Prior and Texeira; I would think this happens all the time with high draft choices who stick when they get up and move too quickly through the minors to require much roster protection from the Rule 5 draft. I'm sure there's a reason you cite Crabtree's situation as unusual, but I'm not grasping what it is. What am I missing?

I also wish you'd defined 'championship team' and 'championship season,' which sound like defined terms of art as you use them. I can more or less infer your meaning, but it's obviously not the usual one, in which a 'championship team' is a team that wins a championship and a 'championship season' is that team's season when they win it.

Let me handle the easy part first: "Championship season" is a term defined in the Collective Bargaining Agreement (CBA) in Article V and we might otherwise use the phrase "regular season." It is used throughout the Major League Rules (MLRs) and the CBA. The way I understand it (there's no glossary in the MLRs) is that it essentially means "a season which leads towards a championship." This is important because it means that time spent on an instructional league roster does not count towards the 90 days of Active List roster time needed to expend an option.

Now your question on how often players will still have options remaining when they also have 5+ years of Major League Service (MLS): Sure, Huston Street fits the bill and so do a couple more players. I would still argue that it's hard to get into a position where a player has options remaining many years after he debuted. For that to happen he would have to debut and stick in the majors relatively quickly after being added to the 40-man roster. There are two ways for that to work. Either he sticks in the major leagues very soon after his drafting date (guys like Texeira or Street), or he sticks in the majors very quickly after being added to the 40-man (like Crabtree).

The first situation is very rare. There are very few Mark Priors and Huston Streets in every draft class. I'm not sure how common the second situation is--my sense is that it's not all that common for a player to almost completely stop burning options after his debut--but there's an added wrinkle that I completely missed.

Here is what a National League club employee pointed out to me a couple days after the article on options ran:

"Optional assignments are not subject to waiver approval from the other 29 clubs" except when it's been over three years since the player's debut--an obscure rule, but it does happen. It happened last year with Travis Smith, Corey Patterson, and David Newhan.

After some searching we identified the rule as MLR 10(e)(2)(B):

"When the proposed assignment is with the right of recall by the assignor Club, waivers shall be required at all times if the date of assignment is three or more years after the date the player first reported to a Major League Club during a championship season. One year shall be deducted from the above three-year period for each season in which a player may have been charged with an option prior to first reporting to a Major League Club during a championship season."

In English this translates to something like this: if you want to option a player down to the minor leagues you have to expose him to waivers (and risk him being snatched up by another club) if it has been at least three years since the date of his major league debut.

What does this mean? First of all, it means that the 5 year MLS right of refusal only helps out players who are likely to sail through waivers. Tim Crabtree was pitching horribly in the beginning of 2000 and Jason Giambi had a monster contract that no other team could pick up. If a player has upside and isn't being paid monster dollars a team would never propose to option him down after he has 5 years of MLS, because some other team would steal him on waivers. For this reason a Huston Street or a Mark Prior are incredibly unlikely to ever need to use their right of refusal.

What about that deduction business in the second sentence of that rule? If a player is optioned for a full-year without a call up prior to his debut, he would have to go through waivers starting two years after his debut. Mark Texeira is a good example of this. He signed a major-league deal at his signing, so he used an option in 2002. He hit the majors and stuck in April of 2003 so the Rangers lost the ability to option him without waivers in April of 2005. Adam LaRoche is another good example. He was optioned for a full-season in 2003 and debuted on 5/29/2004. Waivers will be required to option him down to the minors again as of 5/29/2006.

More significantly it means that players who sign a major league deal straight out of the draft have a new hammer on management. We knew they had to be brought to the majors quickly, because they run out of options in three years, but once they make it to the majors they are unlikely to be optioned back down if they hit a rough patch later in their careers. This obscure rule forces teams to waive players who still have options a few years after their debut and subjecting a player to waivers is a big risk for a team to take.

I was reading a winter league update on sfgiants.com and noticed that Rich Draper said that Todd Linden was out of options. I then read your excellent piece on the option rules, and, in doing so, found out that Linden was actually not out of options. Literally the next week, another article by Draper retracted his statement and indicated that, indeed, Linden does have one option remaining. I was wondering if you had a dialogue with Draper about this issue, and if you and the rest of the BP writers are friendly with your colleagues at the mlb.com.

I e-mailed Draper, and I directed him to the article here at BP. I don't know if I was the source for the correction.

You can't exactly fault him for getting this wrong in his first article, either. Todd Linden himself told Draper that he was out of options in their interview and few people know about that 20-day minimum exception. You don't expect beat writers to know the intricacies of every complicated waiver rule, but you would imagine that a player would know his situation, especially if he thinks he's going into spring training with a need to make the team. It just goes to show you how complicated these rules are and how few people know all the ins and outs.

I can't speak for all of BP but I know that some of us are friendly with our colleagues at MLB.com. They have some good people working there and I had more than a couple of drinks with them at the Winter Meetings.