Designated for Assignment

Designated for assignment is a contractual term used in Major League Baseball. When a player is designated for assignment, he is immediately removed from the club's 40 Man Roster. This gives the club 10 days to decide what to do with the player while freeing up a roster spot for another transaction, if needed. After designating a player for assignment, the club must make one of the following contractual moves:

• Place the player on waivers (which can only be done within the first 7 days of the 10-day period)
• Trade the player
• Release the player

Place the player on waivers

Typically a player is placed on waivers after being designated for assignment for the purpose of outrighting him to one of the club's minor league teams. 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. However, a player must clear waivers (that is, no other team may place a waiver claim on the player) to be sent to a minor league team. Also, if the player has five or more full years of major league service, he must give consent to be assigned to the minors. 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.

Release a Player

If a player is not traded, and clears waivers, he may be released from the team. The player is then a free agent and may sign with any team, including the team that just released him. The team that releases him is responsible for the salary the player is owed, less what he is paid by the team that signs him. In practice, that amount is usually a pro-rated portion of the Major League minimum salary.

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.

Free Agency

If a player is drafted and is offered a contract by his drafting team (or any team he is traded to) each year, he may not become a free agent until:

1. His contract has expired with at least six years of service time on a major league 25-man roster or disabled list.
2. 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 in the second week of December). Such players become non-tender free agents.