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Sufficient Consideration? The Implications of the Latest Waiver Movement in MLB

In the weeks leading up to MLB’s August 1st trade deadline, there was much intrigue as to whether the Los Angeles Angels would trade pending free agent Shohei Ohtani. Instead of selling and potentially netting a significant prospect return from the two-way superstar, the Angels went “all in” and make one last push at a postseason run before Ohtani hits free agency. The team traded some of their best prospects for a handful of players including Lucas Giolito, Reynaldo Lopez, Randall Grichuk, and Dominic Leone. By doing so, the team exceeded MLB’s Competitive Balance Tax, commonly referred to as the “Luxury Tax.”

Long story short, the Angels all in effort came up well short. The club struggled heavily in the month of August, losing 18 of the 26 games and falling completely out of both AL West and AL Wild Card contention in the process. In addition, Mike Trout returned to the injured list after only returning for one game and Ohtani suffered a torn UCL, ending his season on the mound.

So what did the Angels front office do in response to their disastrous August? Well, they basically “undid” most of their trade deadline moves by placing nearly a quarter of their roster on waivers, including the four aforementioned players listed above. What was the incentive for the team do this? How will this affect the pennant race this season? Are there any big picture ramifications the league might want to look into regarding waiver moves? Let’s dive in.

By placing Giolito, Lopez, Grichuk, Leone, and reliever Matt Moore on waivers, the Angels now appear to have gotten their payroll under the $233 million luxury tax. Although the tax calculations are not official until December, all signs are pointing towards the team being shy of the threshold. This is important for a couple of reasons. The first one being it will save Angels owner Arte Moreno some money, which isn’t a reason many fans will want to hear. However, the other reason is a little more notable. Now, if the Angels lose Shohei Ohtani as a free agent after making him a qualifying offer this winter, they will receive a compensation pick after the second round. It would have been after the fourth round if they were over the threshold.

While the MLB Draft is largely considered somewhat of a crapshoot where first round picks fail to reach the majors and tenth round picks can become all-stars, getting an additional second rounder instead of a fourth rounder is still significant. While Angels management has certainly dropped the ball over the years by failing to field a .500 team with two generational players on their roster, it’s hard to criticize them for this move because it both falls within the rules and provides the franchise a benefit. However, just because it falls within the rules doesn’t mean it doesn’t bring up competitive integrity issues.

First of all, by cutting ties with nearly a quarter of their roster, the Angels will undoubtedly be a far worse team on paper in the month of September than they otherwise would’ve been. Therefore, anyone who has the Angels on their schedule this month will likely benefit. Teams like the Orioles, Guardians, Mariners, Rays, Twins, and Rangers, who are all fighting for division championships or wild card berths, will face the Halos in the coming weeks and could bank some much-needed wins to get themselves into a better postseason position.

But teams trade away some of their best players and weaken themselves at the trade deadline every season, so the Angels shedding some of their contributing players isn’t unprecedented by any means. How they went about shedding them is though.

When “sellers” trade away players at the deadline, they don’t just give them up for salary relief. They give them up for prospects that will help them in the future. In order to acquire players that play key roles in a pennant race, “buyers” have to outbid other suitors with prospect capital to do so. The consideration of acquiring players for the future offsets the downside of trading away from the present roster.

But what the Angels did doesn’t fall into that category. They essentially let the Cleveland Guardians take Gioltio, Lopez, and Moore for essentially nothing. The Guardians, who for all intents and purposes sold at the deadline in trading Aaron Civale to the Tampa Bay Rays, benefitted from being in an advantageous waiver position. Instead of being required to shell out any of their top prospects like their contending counterparts did at the deadline, the Guardians walked away with players that could help them push the Minnesota Twins for the AL Central crown for pennies on the dollar.

While it’s unknown if MLB or the MLBPA will do anything drastic to stop a team like the Angels from putting a significant number of players on waivers in the future, I bet it will be a talking point at this offseason’s Owners and GM meetings. The Twins front office can’t be happy that a team chasing them for the division got to pick up a collection of players for essentially nothing. Buyers like the Rangers or Astros can’t be happy that a team didn’t have to give up any of their top prospects to acquire talent when they had to just weeks earlier at the deadline.

What the Angels did was largely viewed as unprecedented and surprising in the baseball industry. Whether or not they were technically allowed by the CBA to place five players on waivers to avoid luxury tax penalties is one thing. But preserving the competitive integrity of postseason races is another and should at least cross the minds of the league’s executives in New York. A potential solution could be pushing back the trade deadline to mid-August or bringing back the waiver trade system that allowed trades up until the end of August where teams would have a little more clarity on their postseason prospects before making drastic moves. But regardless, it’s not the best look when a team potentially shakes up the playoff race to get under the luxury tax.

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