Home Safe: No-Trade Clauses and Player Salaries in Major League Baseball



In this study, we examine the wage effects of no-trade clauses in Major League Baseball. Using an accepted player salary equation and data from the 2003–2008 seasons, we find evidence that there is a trade-off between monetary compensation and the risk reduction provided by a no-trade clause. The results suggest that players may be able to simultaneously negotiate for a no-trade clause and higher salaries, but this is constrained when players also seek to guarantee their income stream with long-term contracts.