Understanding The New Trade Deadline Rules

Remember when the trade deadline meant something? You don’t have to go back to poodle skirts or bell bottoms or even neon and Zubaz. It wasn’t long ago at all that the end of July meant the end of significant dealing.

August trades have always been a thing, but they were mostly of much lesser significance. Sure, there was that one mind-boggling blockbuster, but that was mostly the exception that proved the rule. Since mankind began keeping track of balls and strikes, no self-respecting contending ballclub would wait for August to make a needed improvement.

A funny thing happened in recent years, however. As teams became more universally value-conscious, and increasingly recognized the importance of maximizing information before making commitments, they began to view the August trade period as a viable path to roster enhancement. (Click here if you fancy a trip down memory lane or if you aren’t familiar with how things used to work.) There was something of a snowball effect. Clear buyers felt less pressure to reach for a deal knowing they could still work something out for a high-priced veteran. Teams that sat on the fence at the end of July could hold pat (or even make a few additions) knowing that there’d be demand for their pricier assets if things fell apart over the ensuing month. One realization fed the other.

Heck, the 2017 August trade deadline was as exciting as its July counterpart. After the Dodgers’ acquisition of Yu Darvish was reported after the deadline had passed on July 31st, the Astros pulled off another last-minute stunner by acquiring Justin Verlander in a swap that didn’t hit the wire until the early morning hours of September 1st. (It was all very confusing and exhilirating. Maybe you just had to be there.) Last year’s August trade period wasn’t quite as momentous but was still filled with notable transactions.

That development obviously caught the attention of some folks in both the league and union offices. For the league, there was likely some concern that the extra month of trade activity allowed too many teams to exit the postseason race, sapping the game of intrigue. From the players’ perspective, the increasing viability of later-in-time mid-season improvements theoretically reduced the demand for teams to make offseason investments. All involved surely recognized that the odd rules regime was simply a messy and rather arbitrary system.

Whatever the precise reasons, we are now in the Unitary Trade Deadline Era. Which … well, it seems self-explanatory. And in large part it is. But the precise mechanism by which it works, and just what it means, isn’t widely appreciated.

When the One True Trade Deadline was announced, it was stated flatly that trades simply couldn’t be made after the deadline (July 31st at 4pm EST in most years). In actuality, there was a tweak made to The Official Professional Baseball Rules Book. If you would please take out your copy and flip to page 71 … We’re looking at Rule 9 (Assignment of Player Contracts).

[Side note: Have you ever wondered why one team can trade a player to another? Your employer can’t trade you. Aha, there it is, first sentence in the rule: “A Club may assign to another Club an existing contract with a player.” It’s collectively bargained.]

Well, Rule 9 doesn’t read quite like it used to. Scroll on down to 9(b)(3) and you will see a “closed period” that limits the general rule permitting trades:

No Major League Uniform Player’s Contract (including for outrighted players) shall be traded to another Major League Club during the period commencing 4:00 p.m. Eastern Time on July 31 (the “Major League Trade Deadline”) and ending upon the day following the day that the last game of the World Series starts.

So, MLB contracts simply cannot be dealt between the deadline and the end of the World Series. The rule not only squashes late-season trade possibilities, but prevents teams from getting a head start on offseason work during the postseason.

Notice that the rule specifically forbids deals involving MLB contracts attached to players that aren’t currently on the 40-man roster by virtue of having been outrighted. (E.g. Rusney Castillo, Yasmany Tomas.) That cuts off an obvious possible loophole, since teams would otherwise be able to send under-water contracts through outright waivers and then strike deals in which they absorbed some of the remaining obligation. Essentially, without that proviso, the old revocable waiver trade period would have been converted to an irrevocable waiver trade period. Instead, high-priced veterans whose contracts are too expensive to be claimed — say, increasingly interesting Royals hurler Ian Kennedy — will have to be dealt before the trade deadline or in the offseason.

But what about Kennedy and his ilk? Can they still move during the month of August? The answer is yes. Rule 9(b)(3) specifically refers to trades. When a club seeks waivers to assign a player outright to the minor leagues, all other teams have an opportunity to file a claim requesting assignment of the contract. That’s all governed by Rule 10, which does not prohibit movement via claims after the trade deadline. Of course, placing a claim means taking on all remaining obligations under the contract.

There is one clear way in which teams can still acquire reinforcements in the event that a desperate need arises: dealing for players that are still playing on minors contracts. Rule 9(b)(4) sets forth a no-trade period for such players and says nothing about the trade deadline. There isn’t any language expressly stating that minor-league contracts can be moved in August, but the legal interpretation maxim expressio unius est exclusio alterius suggests that’s the intended result. That’s not the most promising source of talent for a contender — top prospects won’t likely be dealt under these circumstances and otherwise the talent level just won’t be elite — but this could well provide an avenue for necessary fill-in pieces.

Are there any other exceptions or ways around the rule? No obvious loopholes appear on the face of the rules, but it’s possible to imagine crafty handshake agreements. Suppose an overpriced veteran is placed on waivers and — surprise, surprise — gets claimed. Then, at a later point (later in August? in the offseason?) an imbalanced trade could be struck between the two teams involved in the claim to help offset the excess financial obligations taken on by the contender.

Would that pass muster? Determined and truly sly operators might be able to pull something off, but it may not be worth the risk. The drafters of the rules were well aware that evasion might be attempted. Rather than trying to foresee every particular type of maneuver, they added a general proviso in Rule 9(b)(5):

“The Commissioner’s Office will prohibit any transaction (or series of transactions) that, in the judgment of the Commissioner’s Office, appears (or appear) designed to circumvent the prohibitions of Rule 9(b).”

Distilled to its essence, this is the new state of affairs:

Between the trade deadline and end of the World Series, MLB players cannot be traded but may be claimed off waivers just like the rest of the year. Players on minor-league contracts can be traded as normal, but MLB contracts that have passed through outright waivers cannot be swapped. The commissioner is empowered to strike down any creative attempts to bypass the rules.