Commentary

What it takes to make a trade

GM must negotiate with several parties before one transaction can take place

Updated: July 28, 2011, 2:28 PM ET
By Jim Bowden | ESPN.com

Editor's note: This is a free piece from former GM Jim Bowden, who writes "The GM's Office" blog for Insider.

As the trade deadline nears, the pressure and excitement are mounting in front offices across baseball because the next six days are the last time teams can make deals without waivers until the offseason. It is also the only time of year that clubs can maximize trade leverage because of a time constraint. Based on my experience as a major league general manager, here's a rundown of how trades get made.

While some deals come together instantly, others take months to consummate. Why? Because negotiations don't just take place with other clubs; they also take place with the following:

1. Ownership: GMs are actually working as the agent for their owner or ownership group in their negotiations with the other clubs. However, there is also always a separate negotiation going on with ownership in terms of the club's vision both short- and long-term. Certain owners will often nix deals because of prospects, financial ramifications or the club's makeup and character. GMs have to keep them informed on a daily basis so there are no surprises and they are completely informed of all aspects of a potential deal. GMs like to get deals approved from above in the shortest window possible, so keeping the owner in the loop allows them to make timely final decisions.

2. Team president: There has been a new layer added for many clubs where the GM reports directly to the president who reports to ownership or some combination. The president can have different philosophical views from the owner or GM, so he's part of the negotiating process, as well.

3. Agent: The agents for the players play an important role, as well. GMs often have to negotiate with agents in order to eradicate no-trade clauses or work out contract extensions for a trade to get done.

4. The commissioner's office: Bud Selig's office has to approve all transactions and give clearance for any deal that involves cash being moved in excess of $1 million.

5. Manager: He is the one who puts the lineup on the field, so the GM must make sure he is consulted when the GM is going to make a roster change. The GM and field manager always want to be on the same page.

6. Scouting department: Where to send the scouts on a nightly basis is a difficult balance, and an organization has several needs working at all times. Therefore, the GM has to organize his scouting staff efficiently in order to get the most out of it.

Trade ideas

The inspiration for trades can come from any number of sources. The idea could come from the GM himself, one of his assistants, a scout or a coach. Believe it or not, sometimes the idea for a deal comes from the media or fans.

Brainstorming sessions take place on a daily basis in the board room, on conference calls, on the field, by Skype, in person, on the Internet or by phone. Once a team comes up with a trade idea that makes sense, the next step is research and analysis. This includes studying the following:

1. Scouting reports: A historical view of the player's scouting reports from the first time he was seen in high school until the present. This could include hundreds of scouting reports, which discuss playing ability as well as character and makeup. In the end, you win with people, not just players.

2. Statistical analysis: This includes every statistic known to mankind.

3. Medical information: Every piece of medical history you can get your hands on.

4. Financial information: Past earnings as well as exposure going forward.

Now you're ready to commence a new trade discussion with another GM. The most important part of the beginning of the trade talks is knowing the other GM's negotiating style. It's the same as dealing with an agent. There has to be an understanding of the other GM's personality. Remember, you can only negotiate with 29 other GMs, and often maybe five have interest in your player. You can't alienate your fellow GMs or the pool will shrink even further.

Making the call

Let's go through a hypothetical trade. We'll use Carlos Beltran as an example since he's likely to be traded this week. When it all begins, the initial phone call can be as simple as this:

"We have made an organizational decision to move Carlos Beltran by the trade deadline. Do you have any interest in the player?"

Unless the club says "no chance," then every other answer should be interpreted as interest. The next step is to talk about each club's needs, wants and direction. In the next conversation one of the two clubs will give an initial offer. And the usual response is some variation of, "No, but I would do …" This can go back and forth for a year or an hour, depending on your needs and level of urgency. Remember, more than 95 percent of the proposed trades that teams discuss never come to fruition.

Once a deal is agreed upon, there are usually several approval steps remaining, including but not limited to the following:

1. Ownership approval
2. Team president approval
3. Medical approval (which often includes a physical by the team physician)
4. Accounting (budget) approval
5. Commissioner's office approval
6. Agent/player approval if he has no-trade rights

While you're waiting for approval, you inform the media relations department so it can get to work on a press release or, depending on the deal, a news conference.

Then each GM talks to his respective players. Once all of that has taken place, the GM officially calls a news conference, which by now means that ESPN's Buster Olney, Tim Kurkjian, Jerry Crasnick, Jayson Stark or Pedro Gomez has likely already broken the story, so it's old news.

Jim Bowden

Baseball, Insider