Can Someone Explain Trades in US Sports?

Hi guys and gals, I was just wondering if anyone could the concept above to a Brit. I've seen that in American sports, players get 'traded' to different teams and this is a concept that I'm more than just a little confused by. In soccer (the only sport I really follow that involves this sort of player movement) players get transferred, but this works much more simply to me.

One club wants another's player, gets their valuation of that player, then stumps up the cash or not. Even then it's not a done deal though, as the player has to agree personal terms with their new employer. Usually the better the player, the bigger the transfer fee paid, sometimes ending up at ludicrous numbers being thrown around.

Anyway, I'd just like to know a little bit more about the trade system works, as I'd really like to know how star players move teams without the prospect of massive transfer fees to sweeten the deal.

I was told that in Ice Hockey you only get a certain amount of 'trades' you can make, that way you don't end up with billionaire Oil Sheiks coming along and buying all the good players up...

There's really not much to it. If there's a team that wants a player on another team, they can make an offer for that player and his contract by offering a player or players that they feel are of compensatory value. From this, there might be additional negotiations, as the second team may desire something other than the initial offer. The trade then has to be approved by the league to ensure that nothing fishy is going on.

However, trades are not just for players. It's also possible to trade draft picks. So if an NFL team could, for example, offer their second and third round picks in next year's draft in exchange for another team's draft picks or players. It's also possible for a trade to just involve a lump sum of cash. Like, I trade you my player, a draft pick, and an additional million dollars for your player.

Leagues also have trade deadlines, in which after a specific date, teams are prohibited from engaging in trades for the remainder of the season.

I don't really understand how you're describing soccer (football) trades. So teams just approach a player and put a wad of money in their hand, and the player can just leave and play for another team?

In basketball (NBA) it's just a business deal between two teams' management. A player is always on contract to play for a team, and that contract can be traded for another player's contract, cash, or both. That seems to be generally how it works in all sports over here, although salary cap rules can vary drastically.

I guess the real difference are salary caps. Salary caps exist to try and limit the talent one team can accrue. Some are hard, like the NFL, and some aren't, like baseball. That is why many baseball fans dislike the Yankees; they are able to pick up some of the best players and go over the salary cap through all the merchandise they sell. They just have to pay a fee.

It's not too different from what you describe in soccer (sorry), but often involves flashy sports agents and drama over the player's wants (see movie Jerry Maguire).

You'd have to specify the sport, as each is different. NBA and NHL (I believe the NHl does, anyway) have soft caps that allow for wiggle room with a luxury tax up to a slightly higher hard cap. NFL has a hard cap number and the MLB has no cap at all. As a result, the way trades are conducted in all four leagues are very different; the NBA and MLB are the main leagues for trade-happy fans.

You can understand the NBA's trading by using ESPN's handy Trade Machine.

I know nothing about Major League Soccer, but I'd be surprised if they played by the same rules as international teams contract-wise.

In trades in the US unless stipulated in the players contract the player has no choice in the matter. He is traded to the other team for compensation and has to report to his new team. In the US leagues usually do not allow players to be swapped/transferred for just straight cash. Since competitive balance is so important here the leagues feel that they should constrain the market so the more profitable teams can't just buy the best players like in European Soccer. If, one magical day, years from now there is enough talent to start other leagues we'll probably adopt the European system and allow big teams to just buy players.

@hailinel:

Thanks, that went quite some way to explaining it for me, so it's mainly about team A getting the best deal they can from team B for their leaving star. Kind of like when you traded Pokemon cards as a kid?

@jjweatherman:

Soccer transfers work more like business transactions, although it's all done through the management of the two respective teams. You legally cannot simply approach the player, or their agent, that's called 'tapping up'. So, for example Manchester United want to buy one of Aston Villa's players (let's use Christian Benteke for another example), they would have to contact Aston Villa themselves and offer an amount of money for Benteke. Then, Aston Villa could either refuse outright, or negotiate.

If/when the two clubs agree a fee, only then can Manchester United approach Benteke and discuss things like a contract. If Benteke says no for whatever reason, the deal is off.If the transfer is completed, Manchester United get Benteke and Aston Villa get the transfer fee the two clubs agreed. They can then spend this money however they like, be it on new fish tanks, or new players.

Also, just like in the NFL, there are only certain times in the season when you can make transfers.

@mikey87144: Thanks, I've always wondered about whether the players could turn it down or not. I watched Moneyball and that seemed really harsh on the guys getting traded to other teams, but I guess that's how it really is. Man, sucks for them.

To get a little more detailed, the NBA has a rule that the value of the contracts of the players involved in the trade between the two teams needs to be almost equal. For instance, you can't trade a guy that has a $60 million contract for someone that has a $5 million contract. There are ways around this by getting a trade exception which makes NBA trades even more complex.

NHL has a hard cap and is a trade happy league as well mainly because of roster and contract limits and the limited number of ways to get rid unwanted contracts and players.

Also in hockey "No Trade Clauses" and "No Movement Clauses" can also be put in a players contract when they sign. These can range from limited NTCs which the player gives a list of teams that he'll accept a trade to full on NMC which prevent the player from being sent to the minors or being traded without the approval of the player.

Can someone explain[...]US Sports?

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@brownsfantb: Can they trade, say, two guys with $10m contracts for a guy with a $20m one?

@jjweatherman: Nah, the explanation Gatehouse gives isn't great. The trades are between management - a team still owns a player's contract. Trades can only happen during transfer windows: a period of up to 12 weeks that is set up by what ever football association that a team is a part of. The FA in England has its transfer window between 9 June – 31 August and 1 – 31 January.

In most transfers, two clubs agree on a fee. Normally it's a bit higher than the players current valuation, or if the player is "transfer listed" is bit lower. Transfer listed means that the player is basically for sale. One reason a club may want to list a player is if the wages are far to expensive. When the clubs agree on the fee, the contract is terminated and the player negotiates a new contract with his new team. The buying club pays the sum to the selling club, and they all go on their merry way. The player negotiating a new contract is different than most American sports where contracts are merely transferred.

However there are many wrinkles to this simple system. Some times players want a part of the transfer fee. A lot of players have bonuses in contracts - like signing-on fees, goal bonuses, appearance bonuses, and other random stuff. Most contracts have buy-out clauses that stipulate that a if a club is approached with an offer of a certain amount that they have to let the player go. Christiano Ronaldo has a 1 billion Euro buy-out clause - so if a club offers Ronaldo's club Real Madrid 1 billion Euros, they have to sell him. The most confusing wrinkle is third-party ownership. The most famous example is that of Media Sports Investment, who own Man City player Carlos Tevez. That means there is a third party that needs to be paid. In football, a player can literally be owned by someone else.

Also, unlike American sports, football has a loan system. A team loans a player for a certain time frame to another club that pays the players wages. It's a way to let younger players that normally don't get a chance to play, get a chance to play. It's the equivalent of letting your youth players play in the minor leagues.

That's a basic coverage of football transfers - I really don't care how trades work. As long as my teams have good players, I'm happy...

@gatehouse: Yeah, that's normally how it works out. Usually, the team trying to acquire the higher paid player is a good team trying to get better so they'll trade 2 or 3 of their bench players for one star player.

@billymaysrip: Thanks, that was a bit better than mine. I didn't even want to touch on third party ownership, that's just a minefield.

@brownsfantb: Ahh, ok, that makes more sense. But, what's in it for the selling team? Why lose your star player, if all you're getting in return is a couple of pants players?

In hockey players are either entry level, restricted free agents or unrestricted free agents. It seems to me like soccer only has unrestricted free agents. Entry level players are typically drafted players. They are pretty much the property of the teams that draft them they reach a certain experience level (7 years pro or age 27), at which point they become restricted free agents. Once their contract ends then their team has to make them an offer in order to keep negotiating rights. If another team makes him an offer then the team with negotiating rights can agree to match it and then they get to keep the player, or they can decide to let the player go to the other team. They would receive draft picks from the other team as compensation based on the value of the contract.

Unrestricted free agents are the veterans who make the most money. They want to end their careers with a contender and all the contenders are going to make sizable offers to any available top veterans. Of course, if they are signed to a contract then they aren't really available for trade offers, unless the team wants to trade the contract.

For example, Jaromir Jagr was signed to a 1 year contract with Dallas last year. Dallas was probably going to finish in the last playoff spot or just out of the playoffs. If Dallas kept him for the entire season then he'd sign a contract somewhere else next year and Dallas would get nothing in return. They traded him (or rather, his contract) to Boston for 2 prospects and a draft pick. Boston made it to the championship but lost in game 7. Boston and Jagr almost got a championship while Dallas got 3 potentially good but inexperienced players.

Teams have a limit to how much they can spend on their rosters, so they are starting to sign longer contracts so that they have their top talent locked in. If other teams were making offers due to expired contracts then that would drive up the price.

There are lots of potential reasons. For example:

1. An unhappy star player's contract is ending, meaning he'll be able to leave and sign somewhere else soon. Best to get what you can for them in a trade before they walk and you're left with nothing.
2. Rebuilding. Sometimes a team will sacrifice the present for the prospect of a brighter future. Generally this involves dumping your big contracts on teams that are in better positions.

Probably lots of other reasons, but I'm no professional sports-ologist.

Also, the way @billymaysrip describes things, the basics really don't seem too different.

In a lot of cases, the seller just wants to get rid of a high-priced player to save money and/or rebuild, especially if that player is either past his prime or on a lousy team that wants to start over. This is quite normal in MLB where a top player making $10-$20 million per year is on a shitty team and is shipped elsewhere for a bunch of younger players in the farm system hoping one or two of those players pay off in the future.

A recent example of this would be the Houston Astros. They had a total payroll of over $100 million in 2009, but had a losing record that season and they hadn't been that successful previously. Their players got old and past their prime so over the last few years, they traded most of their veteran players to other teams for younger, cheaper players to the point where their payroll is less than the contracts of some players in the league.

So to answer to your question, the seller is buying a potential winning team a few years down the road and is saving cash.

You may be losing one star athlete but you're potentially gaining a greater number of young talented players. Ideally you're not just receiving "bench players" but potential future starters (you might hear them referred to as "prospects").

Take for example a trade that occurred this past season in Major League Baseball between the New York Mets and the Pittsburgh Pirates, that involved a player named Marlon Byrd. The Pirates, which up until this year had been perennially bad for the last 20 years, found themselves in very good position to make the playoffs about 2/3rds of the way through the season. But one thing they needed was a player who played in the "Outfield" and was also a better hitter than what they had currently. Enter the New York Mets who had were having a very middling season with no chance of making the playoffs, but had a player named Marlon Byrd, who at 36 (pretty old for a player) was having one of the best seasons of his career. He was only on a one year contract meaning that he would be a "free-agent" at the end of the year and allowed to sign with whichever team he could make a deal with. Instead of letting this happen the Mets and Pirates struck a deal that sent Byrd to the Pirates and the Pirates in return sent two young prospects to the Mets. The Mets received Victor Black (age 25) who profiles as a very good relief pitcher and is already playing at the major league level. And Dilson Herrera (age 19) who's defense at 2nd Base is about as good as it gets and could potentially be a good hitter as well, though he'll have to spend some time in the minor leagues to develop that ability.

This was likely a good deal for both teams, as the Pirates get alot help for the their playoff push. While the Mets, in the middle of a lost season, get some value back for a player they weren't going to have control over at the end of the season anyway. There were some complications with when this trade was done and how it was done, but I will spare you those details. I just hope that helps explain things better.

@dalai: @down_and_out:

Thanks guys, those couple of examples helped. Would I be wrong in thinking that in baseball, only the big, big teams hit the salary caps and everyone else is trying to save a few bucks where they can?

Also, it just seems so weird to me that a 36 year old can still be competitive at the top levels, in soccer, the ages are much much lower. But then again, baseball's a very different sport.

Overall, it seems the trade system's a lot closer to soccer transfers thanI thought it was to begin with. Thanks for all the answer's y'all.

Baseball currently does not have a salary cap, but you're right that most low-revenue teams do their best to save money where they can while the "big market" teams spend money willy-nilly.

edit: Heres a breakdown of each MLB team's payroll: http://www.usatoday.com/sports/mlb/salaries/2013/all/team/all/