Revocable Waivers: The Hitchhiker's Guide

After the July 31st non-waiver deadline passes, it often seems as if people stop talking about possible trades being made. This may have something to do with ESPN and other media outlets calling it the "trade deadline"--which is incredibly misleading--but it more likely has to do with one simple fact: the waiver period in August is frequently dry, bland, and boring. Now, there are many reasons for this, and I'd like to take some time to talk about this truly odd period in the baseball season.

What are waivers?

Imagine yourself at a lunch room table in high school. You ordered some french fries, but darn it you just can't bring yourself to eat them. They still have value, but clearly your stomach is too full to take any more. You turn to your friends and ask, "Who wants some fries?"--for the sake of argument, you've got a twisted mind where you rank your friends by who you think needs the fries the most. In baseball terms, you've got a few different scenarios that can happen:

1) You go up your list of friends from the bottom--starting with the person who you think needs the fries the most--asking if they would like the fries. If the first person responds with a no, you move to the next individual until someone says yes. They select the fries, you work out a deal--because darn it you just aren't going to give up those fries for nothing.

2) You go through the list and nobody is interested in your fries. They think they stink, are cold, and don't want your filthy germs. Your fries go unclaimed, so you tell everyone, "Hey, best offer wins." You work out a deal or decide to keep the fries if nothing can get worked out.

3) You put the fries up for grabs and they are claimed. Friend number four--who has been a real jerk to you--claims them. You suddenly feel as if you have a second wind and decide that you are going to keep your fries. You pull the fries back towards you and go to town--stomach pains be damned.

4) Someone claims the fries and you decide they actually have no value to you. The person has to take the fries and everything that comes with them. They pay you a nominal fee for your troubles.

This is how revocable waivers work in MLB. MLB teams can put players on waivers--so like the fries at the lunch table--and other teams can put claims in on them. The team who needs the player the most--so the team with the worst record--gets priority on a claim. If they say no, then you go up the list from there. If the player goes unclaimed--which is most often the case--then he becomes eligible to be traded to any team without restrictions. In revocable waivers, teams can also go with option three. If a team puts a claim in on a player, the team that placed him on waivers is free to pull him back off waivers for any reason they like. The fourth option, which very rarely every comes into play, allows a team to simply take on a player's contract at nothing more than the cost of a waiver fee.

Who gets put on waivers?

The simplest answer: a ton of players. Elvis Andrus--who recently signed a huge extension with Texas to keep him there through as long as 2023--was placed on waivers. However, it is most frequent that middle-tier players who might draw some kind of interest get placed on waivers. In a sense, revocable waivers work as a way for teams to analyze what the trade market is like after the non-waiver deadline--aka "The Trade Deadline."

MLB Trade Rumors has a list of players who have reportedly cleared waivers, and the names are pretty typical. Guys with big contracts and lackluster results--like Adam Dunn and Justin Morneau--will frequently clear waivers as there just isn't enough interest in those players for teams to go through the trouble of claiming them. If a team trades for a player after he's cleared waivers, they can always play the, "well yeah, but we didn't claim him so we really don't like him thaaaaaat much interest" card--whereas if they were claimed, the waiving team has all of the leverage.

Why put a player on waivers?

Along with the aforementioned trade market gauging that goes on, the easiest way to think about it is that there really isn't a reason not to. Since the waivers are revocable, teams don't ever even have to enter negotiations. It's like a Charlie Brown moment where the football gets removed before it can be kicked. However, there are two reasons as to why teams may not want to place a player on waivers:

1) Revocable waivers can only occur once per season. If a player is brought back off of revocable waivers, he is no longer eligible for revocable waivers that season. What this means is that if the team were to place him on waivers again, they would be at the mercy of the claiming team.

2) Teams may not want to take a hit on future trade leverage. If a team refuses to even put a player on waivers, then they show that they have zero interest in testing his value--at least in a public format that we can see. If he were to be placed on waivers, then teams would know that there is at least some kind of interest in moving the player.

While both of these things may come into play at some point, players are often likely not placed on waivers simply because teams have no interest in trading them at all. While it may seem minimal, there is value to be had in making it clear to a player that he means a lot to the organization--so much, in fact, that you won't even place him on revocable waivers.

Why don't waiver deals happen?

A lot of the reason is likely to be focused on the fact that individuals who can reasonably traded are traded by the non-waiver deadline. There is less incentive to wait around for a player to be dealt, as a player has more value before the deadline--and this is often related strictly to playing time. Simply put: teams trading for players want them around for more games and teams trading away players want leverage to use to get more in trades. The longer they wait, the less each side can gain from a trade and the smaller the deals become.

Another factor is the possibility for teams to play a game of chicken against each other. For example, let's say Cliff Lee gets placed on revocable waivers and the Red Sox really want him. The Yankees really do not want to see the Red Sox win and they know the Sox will put in a claim to try to get a deal done. The Yankees can put in a claim, which will end in one of three ways:

1) The Yankees and Phillies work out a trade and everyone is stunned.

2) The Phillies pull Cliff Lee back from waivers because they don't see the Yankees as a fit.

3) The Phillies decide they don't want to work out a deal, do nothing, and let the Yankees take Cliff Lee and his huge contract.

The first scenario is unlikely to happen--because the Yankees aren't claiming based on their own interest--so the Yankees are then faced with the second two scenarios. The second scenario is exactly what they want, because they want Lee to be pulled back. If Lee is pulled back, the Phillies will not want to put him on irrevocable waivers, so the Red Sox will not have the ability to trade for him. However, the Yankees don't have any interest and don't want to be stuck with number three. They are trying to stay under the 2014 luxury tax and are staring a Robinson Cano contract in the face.

The above may be a rare example, but it's a part of the possible process. More often than not, players go unclaimed and become eligible to be traded afterwards. As mentioned before though, most players that can realistically be traded have already been traded by the time the waiver period begins. If they haven't been, it's going to be harder for teams to work out deals as the acquiring team will not be getting as many starts from the player and the trading team will not be be getting as much in return. At that point, it makes more sense for the trading team to offer a qualifying offer and take the resulting draft pick compensation.

Alex Rios traded to the Rangers

Bryan Grosnick takes a peek at one waiver deal that actually went through after a claim.

Example: Elvis Andrus

So there may have been a slight uptick in activity on Twitter when Elvis Andrus reportedly cleared waivers on Thursday. Many people asked whether he would be traded, why he was placed on waivers in the first place, and what exactly to make of Texas putting a guy on waivers so soon after signing him to a big extension. Let's go through this one bit at a time:

Why did Texas place Elvis Andrus on waivers?

Multiple reasons. First, they don't have to actually do anything with him and can revoke him at any time. Secondly, they are probably still looking for any avenue to make their team better in the present and the future--and it's possible that there is an Elvis Andrus trade out there to be done. Lastly, they may actually have a genuine interest in trying to dump his contract on someone if he gets claimed. He's taken quite a significant step back in his fifth full season in the league, so Texas might just have some in-house reservations about paying him as much as they will be paying him--though this is not likely.

Will he be traded?

It is very hard to see him being traded this season, but I want to back track just a bit first. Elvis wasn't claimed, which is a sign that teams just don't have a huge interest in inheriting his contract. Even with Pete Kozma at shortstop, the Cardinals did not bother putting in a claim. To get back to the question at hand, it is very rare that players with as many years and dollars on their contracts as Andrus get moved in the waiver period. Andrus is even more unlikely to be dealt because his value is at its lowest in three years. He's got a big contract, is playing his worst baseball since 2010, and the Rangers just aren't going to sell low on him

However, do not let the waiver wire stop you from believing a trade is possible. After all, the Red Sox and Dodgers performed the Adrian Gonzalez trade as a waiver period deal. Contracts can be moved and deals can be made, but it takes some very special circumstances--like the Dodgers developing insanely deep pockets as a result of their sale and the Red Sox completely falling apart.

Adrian Gonzalez Traded to Los Angeles

Read Eric Stephen's account from True Blue LA.

What does this mean for Texas?

It means nothing more than that Daniels and company are doing their due diligence. There is no pressure on them to make a deal, they have the majority of the leverage, and they control who gets to be involved.

Should a team have put in a claim?

This is an intriguing question because there was a team that really seemed like a good fit for Andrus: the St. Louis Cardinals. Frankly, Pete Kozma isn't cutting it at short with his lack of a bat. Since he also doesn't have an elite glove to compensate, it would make sense for the Cardinals to seriously pursue an upgrade with prospect Ryan Jackson having a rough time in the high minors--and by the way, Elvis Andrus is younger than Ryan Jackson.

There a few possible reasons as to why St. Louis didn't make a claim. One is that if St. Louis claims then Texas is likely to pull Andrus back. If Andrus is pulled back, no trade is possible. If nobody puts in a claim then the Cardinals can negotiate a deal after he clears. Another reason is that St. Louis may not want to risk taking on the entirety of Andrus' contract. If this was the driving reason, then one has to ask whether that was a poor decision. Here's a breakdown of Andrus' contract:

2014: $6.475 million

2015-2020: $15 million***

2021-2022: $14 million

2023: $15 million vesting option

***= Andrus may choose to opt out of the contract after the 2018 or 2019 season.

Counting 2014 and the vesting option, that's $139.475 million owed to Andrus if he is healthy and plays enough for the 2023 option to vest. If the dollar were to not inflate at all--which is incredibly unlikely--Andrus would need to produce just shy of 28 wins in the next decade to be worth the contract. However, since the price paid per win will be significantly more than the current expected $5 million/WAR ratio, he will have to produce even less than that.

Elvis Andrus has produced 14.7 fWAR since he made his debut and is 24 years old. Even though he is a speedster--a skill set that doesn't age particularly well--he still would only be 34 in the season of the vesting option. If we assume 25 wins are necessary to fulfill the value of the deal, then that's 2.5 wins per season. However, there is a key place where Andrus' value becomes a bit fishy: a very large chunk of his value is produced through defense and base running. Value returns on defense and base running can vary quite a bit, so it's possible the Cardinals--and other teams--may not believe he's a four-win player like fWAR would have us believe.

Ultimately, the reason the Cardinals did not put in a claim could have been that they felt a fair trade was not possible. Andrus may have 10 years of control at a decent AAV, but there are two key things to remember:

1) If he's good, he can simply opt out after 2018 at 29 years old. He'd still be in his prime, and he'd likely hit the free agent market looking for a big contract. So really, the team trading for him would be faced with five years of control instead of ten.

2) If he isn't good, the team is stuck with him and his contract for ten years. While it may seem unlikely, it shouldn't be ruled out that 2013 Andrus might just be what Andrus provides for the foreseeable future.

Since Texas holds nearly all of the cards here--no horrible puns intended--St. Louis would have to pay a pretty penny to acquire Andrus' services.

Conclusion

The revocable waiver period is a largely dead and uninteresting period in the baseball season. Sometimes it serves as a beacon of hope--like after a boring 2013 trade deadline--but most of the time it is simply an afterthought. Most players who are on the market get traded by July 31st. If they aren't, trade negotiations become harder due to issues with playing time. At the end of the day, revocable waivers should simply be replaced with an extended non-waiver deadline--which would become a true "Trade Deadline" if revocable waivers are scrapped. The majority of the time, revocable waivers serve as nothing more than a dipstick to test just how much trade interest there is in a player after the deadline has already passed.

. . .

All statistics courtesy of FanGraphs.

Ken Woolums is the Transactions Editor at Beyond The Box Score. You can follow him on Twitter @Wooly9109

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