Major League Baseball transactions
Major League Baseball transactions are changes made to the roster of a major league team during or after the season. They may include waiving, releasing, and trading players, as well as assigning players to minor league teams.
25-man, 40-man, and postseason rosters 
Each Major League Baseball team maintains both a 25-man roster and a 40-man roster of players. Players on the 25-man roster are eligible to play in official major league games throughout the season. The 40-man roster includes the players on the 25-man roster plus as many as 15 players who are either on the team's 7- or 15-day disabled list (see below), who are on paternity leave for up to 3 days, or who are in the team's minor league system. From September 1 through the end of the regular season, any player on the 40-man roster (also referred to as the "expanded roster") is eligible to play in an official regular season game. Many young players make their Major League debuts in this way, as "September call-ups."
To be eligible for a team’s postseason roster, a player must be on any of the following: (a) the 25 or 40 man active roster, (b) the disabled list, (c) the bereavement list, or (d) the suspended list as of August 31 at midnight. The only exception is that a player who is on the disabled list at the end of the regular season may be replaced on the postseason roster by any other player who was in the organization on August 31, with the approval of the commissioner of baseball. A postseason roster is a fully expanded roster and can have an unlimited amount of players. Any player who has appeared in or played at least one game in the majors for that team regardless of spending a brief amount of time in the minors will be called up from the minors to be on the postseason roster. All players on the final roster of the team's season will be eligible to receive a World Series ring after the team wins the World Series.
Teams may trade only players currently under contract, except those players who have been drafted in the last year. From the end of the previous World Series through July, trades between two or more major league teams may freely occur at any time. In August, trades may only be made after all players in the trade clear waivers or are not on 40-man rosters. Players acquired after August 31 are ineligible for the postseason roster unless they replace an injured player. Unlike in the NFL, NHL and the NBA, teams may not trade draft choices (with one narrow exception), but may purchase the rights to Rule 5 Draft Picks.
Beginning with the 2012 season, MLB allows one specific class of draft picks to be traded. As part of a newly signed collective bargaining agreement between MLB and its players' union, each team is allocated a "bonus pool"—a set amount of money it can use to sign its draft picks for that year. Teams that go over their threshold can be penalized by losing one or more future draft picks. Those forfeited draft picks will eventually end up in the possession of small-revenue teams, which can then trade them if they wish. The first picks awarded under this scheme are for the 2013 draft.
The August 31 rule was waived in 1945 for returning servicemen. Over the years, there have been several notable cases where a player acquired after the August 31 deadline made a significant contribution to a playoff-contending team but was ineligible for the postseason; for example, Pedro Ramos with the 1964 New York Yankees and Sparky Lyle with the 1980 Philadelphia Phillies.
If a player has been on an active major league roster for ten full seasons and on one team for the last five, he may not be traded to another team without his consent (known as the 10 & 5 rule). Additionally, some players negotiate to have no-trade clauses in their contracts that have the same effect.
In some trades, one of the components is a "player to be named later" which usually turns out to be a minor league player. The unnamed player is included as part of a trade when the teams cannot immediately agree on a specific player or when the player is not yet eligible to be traded. In these cases, the player in question must be named within six months. Cash or some other consideration may be exchanged in lieu of the player to be named later. For example, during the 1994 Major League Baseball strike, the Minnesota Twins traded Dave Winfield to the Cleveland Indians at the trade deadline. Among the conditions of the trade were that if the Indians played no more games in 1994, "Indians general manager John Hart must write a check for $100 made out to the Minnesota Twins and take Twins general manager Andy MacPhail out to dinner."
Any player under contract may be placed on waivers ("waived") at any time. After MLB's July 31 trade deadline and through to the end of the season, however, a team must place a player on waivers if that player is to be eligible to be traded. The National League (NL) was the first of the two major leagues to adopt this rule in 1917. Originally it was enforced after June 15, but was later changed as the result of a new collective bargaining agreement.
For many years, players could not be traded from one league to another without being waived by all of the teams in the trading team's league. Then an inter-league trading period was established, centered on the winter baseball meetings in December. Later, there were two "inter-league" trading periods each year, one from after the World Series until mid-December and the second from a week before spring training began until March 15. So intent were leagues on keeping their stars from being moved from one league to the other, that then-National League President Warren Giles threatened to keep NL clubs from trading major stars to the American League after the deal that sent Frank Robinson from Cincinnati to Baltimore.
If a player is waived, any team may claim him. If more than one team claims the player from waivers, the team with the weakest record in the player's league gets preference. If no team in the player's league claims him, the claiming team with the weakest record in the other league gets preference. In the first month of the season, preference is determined using the previous year's standings.
If a team claims a player off waivers and has a viable claim as described above, his current team (the "waiving team") may choose one of the following options:
- arrange a trade with the claiming team for that player within two business days of the claim; or
- rescind the request and keep the player on its major league roster, effectively canceling the waiver; or
- do nothing and allow the claiming team to assume the player's existing contract, pay the waiving team a waiver fee, and place the player on its active major league roster.
If a player is claimed and the waiving team exercises its rescission option, the waiving team may not use the option again for that player in that season—a subsequent waiver would be irrevocable with a claiming team getting the player essentially for nothing. If no team claims a player off waivers after three business days, the player has cleared waivers and may be assigned to a minor league team, traded (to any team), or released outright.
The waiver "wire" is a secret within the personnel of the Major League Baseball clubs; no official announcement of a waiver is made until a transaction actually occurs, although information sometimes leaks out. Players are often waived during the post-July "waiver-required" trading period for teams to gauge trade interest in a particular player. Usually, when the player is claimed, the waiving team will rescind the waiver to avoid losing the player unless a trade can be worked out with the claiming team.
Assignment to a minor league team 
A common misconception, based on the phrase, "out of options," is that a player may only be moved between the major and minor leagues a finite number of times. On the contrary, a player has a finite number of option years in which he may be moved between the major and minor leagues an unlimited number of times. If a player is on the 40-man roster but not on the active major league roster, he is said to be on optional assignment—his organization may freely move him between the major league club and the minor league club. The rules for this are as follows. (In all cases, an assignment of a player on a major-league disabled list to the minors while on a rehabilitation assignment does not count as time spent in the minors.)
- Once a player has been placed on a team's 40-man roster, a team has 3 option years on that player.
- A player is considered to have used one of those three option years when he spends at least 20 days in the minors in any of those 3 seasons.
- A team may have a fourth option year on a player with less than five full seasons of professional experience, provided that both conditions are met below.
- A player has not spent at least 90 days on an active professional roster in a season. Minor leagues that play below Class A Advanced have seasons that are shorter than 90 days, and as such, any player who spends a full season in a rookie or Class A (short-season) league will receive a fourth option year.
- A player has not spent at least 60 days on an active professional roster AND then at least 30 days on a disabled list in a season. Only after 60 days have been spent on an active professional roster does time spent on the disabled list count towards the 90-day threshold. As with the prior example, this cannot occur with players who spend a full season in a rookie or Class A (short season) league.
Once all of the options have been used up on a player, a player is considered "out of options" and a player must be placed on and clear waivers prior to being sent down to the minor leagues (there is also the "veterans' consent" rule; see below). Additionally, three years after the date of a player’s first appearance on a major-league roster, he must clear optional waivers (which are revocable) to be optioned even if he has options remaining.
Designated for assignment 
A player who is designated for assignment is immediately removed from the 40-man roster. This gives the team time to decide what to do with the player while freeing up a roster spot for another transaction, if needed. Once a player is designated for assignment, the team has ten days to do one of the following things: the player can be traded, the player can be released, or the player can be put on waivers and, provided he clears, outrighted to the minors. A player who is outrighted to the minors is removed from the 40-man roster but is still paid according to the terms of his guaranteed contract. A player can only be outrighted once in his career without his consent.
Veterans' consent 
If a player has 5 years of major-league service, he may not be assigned to a minor-league team without his consent, regardless of whether he has already been outrighted once, even if he clears waivers. If the player withholds consent, the team must either release him or keep him on the major league roster. In either case, the player must continue to be paid under the terms of his contract. If he is released and signs with a new team, his previous team must pay the difference in salary between the two contracts if the previous contract called for a greater salary.
Disabled list 
If a major league player cannot play because of a medical condition, he may be placed on the 15-day disabled list (DL). This removes the player from the 25-man roster, freeing up a space, but he is ineligible to play for at least 15 consecutive days. Players on the 15-day disabled list are still a part of the 40-man roster. An injured player may also be placed on the 60-day disabled list to remove the player from the 40-man roster as well, with the condition of being ineligible to play for 60 consecutive days.
Players placed on the 15-day disabled list may be moved to the 60-day list at any time, but not vice versa. Players may be placed on either disabled list retroactively for a maximum of 10 inactive days and may remain on either list for as long as required to recover. During this 10-day period, a player's status is said to be day-to-day, indicating that the team is in the process of deciding whether the player must be placed on either DL or is healthy enough to return to active service. Injured players may not be traded without permission of the Commissioner nor may they be optioned to the minors, though they may be assigned to a minor league club for rehabilitation for a limited amount of time (30 days for pitchers, 20 for non-pitchers).
In 2011, a 7-day disabled list was added specifically for players who have suffered a concussion. This was instituted to allow players who may recover from their concussions quickly to be removed from the active roster and replaced for a shorter period of time than 15 days. A player who is still suffering from concussion symptoms at the 15-day mark is automatically transferred to the 15-day DL. Both the brain injury and the player's recovery need to be verified by team and league doctors; the list is not intended for non-concussion injuries.
Bereavement list 
The bereavement list may be used when a player finds it necessary to leave the team to attend to a serious illness or death in his (or his spouse's) immediate family. A player placed on the bereavement list must miss a minimum of three games and a maximum of seven games. The team can use another player from its 40-man roster to replace a player on the bereavement list.
Paternity leave list 
The paternity leave list may be used when a player finds it necessary to leave the team to attend the birth of his child. A player placed on the paternity leave list must miss the next team game, but no more than three games. The team can use another player from its 40-man roster to replace a player on the paternity leave list. This list was adopted beginning with the 2011 season.
Rule 5 draft 
If a player not on a 40-man roster has spent four years with a minor-league contract, originally signed when 19 or older or five years when signed before the age of 19, he is eligible to be chosen by any team in the rule 5 draft during the offseason. No team is required to choose a player in the draft, but many do. If chosen, the player must be kept on the selecting team's 25-man major league roster for the entire season after the draft—he may not be optioned or designated to the minors. The selecting team may, at any time, waive the rule 5 draftee, such as when they no longer wish to keep him on their major league roster. If a rule 5 draftee clears waivers, he must be offered back to the original team, effectively canceling the rule 5 draft choice. Once a rule 5 draftee spends an entire season on his new team's 25-man roster, his status reverts to normal and he may be optioned or designated for assignment. To prevent the abuse of the rule 5 draft, the rule also states that the draftee must be active for at least 90 days. This keeps teams from drafting players, then "hiding" them on the disabled list for the majority of the season. For example, if a rule 5 draftee was only active for 67 days in his first season with his new club, he must be active for an additional 23 days in his second season to satisfy the rule 5 requirements.
Any player chosen in the rule 5 draft may be traded to any team while under the rule 5 restrictions, but the restrictions transfer to the new team—if the new team does not want to keep the player on their 25-man roster for the season, he must be offered back to the team he was on when he was chosen in the draft.
The intent of the rule 5 draft is to prevent teams from holding major league-potential players in the minor leagues when other teams would be willing to have them play in the majors. However, this draft has also become an opportunity for a team to take a top prospect from another team who might not be ready for the major leagues. For example, Cy Young award winner Johan Santana was chosen by the Florida Marlins four years before winning the award, when the Houston Astros declined to put him on their 40-man roster. The Marlins chose Santana in the 1999 rule 5 draft, and traded him to the Minnesota Twins who kept him on their roster for the 2000 season, in which he toiled to a 6.49 earned run average at only 21 years of age. Two years later, he legitimized himself as a Major League pitcher, with an ERA under 3.00, and two years after that, he was recognized as one of the best pitchers in the league. Had he not been chosen in the rule 5 draft, he likely would not have made his major-league debut until the 2001 or the 2002 season with the Astros.
Free agency and salary arbitration 
A free agent is a player whose contract with a team has expired and who is thus eligible to sign with another team.
If a player is drafted and is offered a contract by his drafting team (or any team to which he is traded) each year, he may not become a free agent until:
- His contract has expired with at least six years of service time on a major league 25-man roster or disabled list, OR
- His contract has expired with less than six years of service time, but the player was signed as a 10-year free agent from the Japanese major leagues (NPB).
- His contract has expired with less than six years of service time, but is not tendered a contract or salary arbitration offer (if eligible) by the tender deadline (usually at the end of November). Such players become non-tender free agents.
A player with less than six years of service time is eligible for salary arbitration if he:
- is without a contract for the next season, AND
- has been tendered a contract offer by his current team by the tender deadline, AND
- cannot agree with his current team on a new contract, AND
- meets one of the conditions below:
- has been on a major league roster or disabled list for at least three years, OR
- has at least two years of major league service but less than three, AND is among the top 22 percent for cumulative playing time in the majors in this class of players (and ties), AND was on an active major-league roster for at least 86 days in the previous season.
Players with more than six years of service time and who are eligible for free agency can also be offered arbitration when their contracts are up, if they have been tendered a contract offer by their current team by the tender deadline, and have not agreed on a contract.
The 4.2 example of arbitration eligibility above is called the "Super Two" exception, in which a player will have an extra year of arbitration eligibility. Notable recent "Super Two" players include Russell Martin, Buster Posey, Ryan Howard, and Tim Lincecum.
Following the salary arbitration process, the player and the team both submit a salary offer for a new contract. The arbitrator chooses one number or the other, based on which offer is closest to the salaries of players with similar ability and service time.
For purposes of salary arbitration and free agency, a player acquires a year of service time if the player remains on the major league roster for at least 172 days of the 182-day season.
Players eligible for neither free agency nor salary arbitration are very seldom offered contracts for much more than the league minimum salary, as the player has no recourse to try to obtain a better salary elsewhere. For this reason, in the first three major league years of their careers (except for the "Super Two" exception above), it is standard practice for players to accept comparatively low salaries even when their performance is stellar. Occasionally, a team may wish to sign a player in his second or third year to a long-term contract, and the resulting negotiations can involve salaries significantly higher than minimum. A recent example is the contract Ryan Braun signed barely a year into his major league career, which would have taken him through 2015. However, in April 2011, he and the Milwaukee Brewers extended that contract through 2020.
A team does not have to offer a contract to a player not eligible for free agency if his contract has expired, regardless of service time. If the player is not tendered a contract offer by the tender deadline (usually in the second week of December), the player becomes a non-tender free agent.
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