Inside Baseball: How MLB Transactions Actually Get Done

Sometime late in the afternoon of March 11, word broke on Twitter that the Phillies were “moving close” to a deal with then-free agent Jake Arrieta. In the hours that followed, several national and local writers confirmed that the two sides had reached a verbal agreement on a complex multi-year contract, though all involved cautioned that no deal was official yet.

And indeed it wasn’t. Before any major- or minor-league transaction can become officially official—before, indeed, a player can appear on a team’s roster or begin receiving paychecks from said team for their services—team, league, and (mostly in the case of free agent signings) agency officials have to work together to confirm each and every minute detail of the transaction in baseball’s system of record: the Electronic Baseball Information System (eBIS).

The gap between when verbal agreement is reached and when a deal is finalized in eBIS is most familiar to us as the interstitial period that comes between word of a big deal breaking in public and the team making that deal official. But the same process applies to thousands of transactions every year, big and small, and when we speak of a deal becoming Official—or, for that matter, a player being placed on waivers or reassigned to the minor leagues or drafted—what we really mean is that that transaction has been recorded and approved in eBIS.

It’s possible that the details of how this system works are only interesting to me, A Known Process Nerd. But on the off chance that might also be interesting to you, I spent some time talking about how the system works with Morgan Sword, the league’s Senior Vice President for League Economics & Operations, and Ned Rice, one of three Assistant General Managers for the Phillies, and the man mostly responsible for that team’s eBIS interactions (you may also recognize him as one of the men who greeted Arrieta’s plane on the tarmac in Florida on the evening of March 13th—the two men have known each other since their time in Baltimore).

First things first—what is the eBIS, exactly? Technically speaking, it’s probably best described as a cross between a standard database and a workflow management system. But there’s a simpler way to describe it, too. “If you’ve ever played fantasy baseball,” said Sword, “eBIS is sort of like a really, really souped-up version of that.”

He’s not kidding. eBIS is where the entire universe of information relevant to the day-to-day management of major- and minor-league baseball is stored. It contains the official record of every big league team’s 25- and 40-man roster, the roster of every affiliate, a roster of all active free agents and their information, copies of every single player, coach, and managerial contract, some limited medical information stored directly by the league, the details of each player’s waiver and option status, and quite a bit more proprietary information besides. It’s also, not incidentally, the system that contains the official record of the first-year player draft.

And no deal becomes official until it’s official in eBIS.

The path to formal approval can be winding. The first thing that happens, of course, is that two or more teams (or a team and an agent) informally come to terms on a trade or free agent signing. This generally happens without the league’s involvement (often as not, via text), but in some cases—when there are especially large sums of money involved, or especially thorny contractual provisions in play—teams or players will bring the league on board early in the process. In most cases, though, the first time the league hears of a deal is when a notification pops up on a computer screen belonging to a man named Jeff Pfeifer at the league offices in New York City. That notification prompts the Commissioner’s Office to review and approve the deal.

“Jeff is probably the person on the face of the earth,” said Sword, “who knows the most about all the nitty gritty of moving players around.”

Unfortunately, Jeff was also a person I was unable to reach for this piece, so we’ll have to rely on Sword’s rundown of his responsibilities for a sense of what happens next. It’s pretty simple in theory, though it can become complex very quickly. Once notified of the deal, the league runs through a series of procedural checks—whether the player is eligible to be traded in the first place, whether every team receiving players while running a full 40-man roster has established a corresponding move, whether any provisions in the player’s contract call for the payment of bonuses, or the vesting of options, in the event of a trade, and (perhaps most importantly) whether the teams in question agree on the particulars of what the trade is.

I was surprised to learn that this last point was something the league had to check—for most transactions, the workflow moves from one team to another for approval within eBIS before it ever gets to the league—but during especially busy periods like the trade deadline or winter meetings, deals may reach the league directly via email or phone, meaning that certain specifics—the schedule and amount of payments to be made, for example—may not have been fully worked out yet. These details rarely scuttle a deal, but they can slow them down some.

“If we agree on a trade with a team,” said Rice, “and when they send it over to us on eBIS something in it isn’t what we agreed to, we generally just call back and say, hey, I think there’s a misunderstanding here, or maybe a typo, or whatever. We’ll generally work through those things before the league would ever know about it. It almost never turns into a big deal.”

There are, generally speaking, three ways a trade might fall through after it’s been entered into eBIS by both teams. One team could jettison the deal after verbal agreement in favor of a better offer; ownership could veto a trade approved by a GM; and one team or another could see something in the medicals they don’t like. The first circumstance almost never happens—the reputational risks are too vast. The second circumstance is, similarly, one GMs try to avoid, for the same reasons. And the third circumstance, of course, happens all the time.

For free agent signings, meanwhile, the final hurdle to clear is generally language relating to the circumstances under which a deal converts from guaranteed to non-guaranteed. That’s something each team negotiates independently with each agency, meaning that if a team hasn’t worked with a particular agent before it can occasionally mean delaying a formal signing for a few days or even weeks while those terms are worked out. In most cases, however, players are represented by a major agency that has established language in place with each of the 30 teams. Unlike the terms in the uniform player contract, which is standard for all players, language surrounding guarantability is not collectively negotiated.

Once all the terms have been agreed to in eBIS, and each team has signed off on the medical reports provided to them under the terms of the deal, the player is free to sign his contract and move the transaction to “confirmed status,” which means the player is eligible to appear on an active roster. In years past, contract signing had to take place in hard copy, and two copies of the contract had to be sent to New York to be stamped by the Commissioner’s Office. No more. These days, most contracts are signed on the iPads that are ubiquitous around big-league clubhouses, and official rosters update automatically shortly thereafter. Not bad for a league that until recently had a single couple in Staten Island scheduling its entire season on pen and paper.

That’s not to say there haven’t been a few hiccups.

“We always code players eligible for the draft into eBIS well in advance of Draft Day,” said Sword, “and a few years back what we’d do was uniquely identify them by a combination of their last name, their date of birth, and the school they were coming from. That worked great for a while. But then one year we had a set of twins, both eligible for the draft, and obviously they had the same last name, the same date of birth, and the same school. After that, we then had to add a feature that signified whether a player that gets entered in there is a twin or not.”

I’m pleased to confirm that eBIS is not currently equipped to handle triplets.

The waiver process, too, is open to human error. The names of players to be placed on waivers are due to the league by 2 o’clock eastern time. An email goes out a few minutes later with the names of the players available on waivers and a request to submit claims by 1 o’clock two days thereafter—47 hours later. The claims received by email are manually entered into eBIS and the league office and the winning teams are notified shortly afterward. This down-to-the-minute timing has led to some problems.

“I don’t know if people would admit to it if they did,” said Rice, “but I’m sure at some point somebody meant to claim somebody and forgot because they were at lunch or something. That’s why you set a reminder on your phone, and then an alarm too for good measure.”

For most teams, the person (or people) responsible for entering deals into eBIS is somewhere at the AGM level—this isn’t an entry-level job, although it isn’t complex, either. You don’t want an intern deciding to trade Aaron Judge over lunch. And so for the Phillies, Rice is one of three or four individuals with edit authority over eBIS, even as read access to the full system (or specific portions of it, depending on level) is integrated into the Phillies’ in-house data system.

“In a given transaction, there’s just a lot to do,” said Rice. “None of it’s a huge deal and it’s not that hard, but there’s just a lot to coordinate between the time that a transaction is done and agreed upon and when it gets announced. You have to exchange medical records, your trainer needs to be able to look at the players, a doctor needs to look at them, and you’re trying to coordinate with your PR group about what time you’re going to announce, what’s the corresponding move, have we contacted all of the involved players? It’s nothing super complicated or difficult, but just a lot of little, small items, boxes to check on any transaction.”

And it happens thousands of times a year. “In addition to all of the major-league teams’ roster moves that get media coverage and are fairly well-publicized,” said Sword, “we have five or six times the amount of transactions and player contracts going on at the minor-league level that are less interesting for fans but equally intensive on processing power and IT infrastructure. We’re keeping track of every affiliate of every team every year, and every contract a player’s signing, every move from Low-A to High-A, every minor-league DL placement, immigration issues for international players, visas, and investigations of age and identity.”

Of course, the most exciting things about baseball right now are happening on the field, followed by the pre-draft happenings in team offices, as interns, scouting directors, and GMs huddle together to plot out the next five years of their teams’ stories. Fans cheer for those things, or at least pay attention to them, and rightly so. By contrast, the workings of the league office as it manages and executes thousands of deals a year go largely unnoticed. Except by me, I guess. And now maybe, by you.

Anyway, the next time your team misses out on a waiver claim you were hoping for, make sure to ping the team twitter, and remind the AGM to set a reminder on their phone, with an alarm for good measure.