mlbtraderumors.com has been reporting during the last couple of days on the status of negotiations between MLB and NPB regarding a new posting system regime. MLB is demanding a cap of $20 million for NPB players, including the most currently desired player Masahiro Tanaka. Latest reports are that NPB is willing to agree to a cap in this amount.
This surprises me. Given how much past NPB players have commanded in posting fees, along with the facts that MLB revenues are increasing and amateur player costs have been successfully contained with new caps for drafted players and international player signings, I would have expected NPB to demand at least a $50 million cap, an amount a little less than the posting fees for each of Yu Darvish and Daisuke Matsuzaka, and then negotiate down to about $35 or 40 million.
A $35 or 40 million cap would still save MLB teams plenty for the most highly desired players and allow smaller market teams to compete for these players. Assuming NPB does indeed agree to a $20 million cap, I would expect NPB teams to hold on to their superstars until the last possible moment. For example, if the cap is $20 million, Tanaka is guaranteed, absent a major arm injury, to command the maximum amount a year from now no matter what he does on the mound in 2014. So why shouldn’t the Rakuten Golden Eagles hold onto Tanaka for one more season, since he isn’t yet even a domestic free agent?
The next question is, if a cap of $20 million is put into effect, wouldn’t at least half the teams in MLB make such a posting bid on Tanaka, who is reasonably projected as a Number Two major league starter and could well turn out to be a Number One? mlbtraderumors initially reported that the proposal was that if more than one MLB team bids the maximum amount, the team with the worst record the previous season would have the first shot at signing the NPB player. A more recent report says that the latest proposal would allow the NPB player to negotiate with every team that posts the maximum posting bid.
The NPB players’ union doesn’t have a lot of teeth, although it did successfully strike for two days nine years ago to prevent NPB from contracting to 11 teams (from 12) (this strike and its resolution are why the Rakuten Golden Eagles currently exist). Regardless, if I were a member or executive of the NPB players’ union, there is no way in the world I would agree to a system where such a player could negotiate only with the MLB team with the worst record.
Under the current system, only the team that most highly values the player can negotiate with him, resulting in contracts for the player that usually just beat the posting amount. Under the current system, Darvish, Matsuzaka and other posted NPB players have been under-paid. However, they still get far larger contracts than they’d get in Japan and probably do as well over the course of their careers as they’d have done had they been forced to wait until they became true free agents after nine full NPB seasons to sign with an MLB team.
Allowing only the poorest-record team to negotiate would give said team a lot of leverage to low-ball the NPB player. On the other hand, allowing all teams that post the maximum bid to negotiate with the NPB player would at least mean that big contracts handed out by the big market teams would count against the winning team’s salary cap for luxury tax purposes. The fact that $50 million+ posting fee bids did not count against the winning team’s luxury tax cap was a major issue for small market teams demanding posting system changes.
What I could see ultimately happening is an agreement whereby only the three worst-record teams posting the maximum bid would get to negotiate with the NPB player. This might be a compromise that all the interested parties could agree to.
Meanwhile, if I were a Rakuten Golden Eagles decision-maker, I’d be screaming bloody murder about the possibility of being forced to accept only a $20 million posting fee for Masahiro Tanaka. Only a month or so ago, the team was looking at a posting fee of at least $50 million, and the Golden Eagles are a small-market NPB team that unquestionably needs as much money for Tanaka as it can get.
If I were said Rakuten decision-maker, I’d announce to the world that the team is holding on to Tanaka for another season (Tanaka is already under contract to the Golden Eagles for 2014 season at a bargain price of 300 million yen, currently about $2.94 million, because the Golden Eagles signed Tanaka to a two-year deal before the 2013 season) unless (1) the new agreement doesn’t go into place until after the 2014 season, or (2) an exception is made solely for Tanaka, either allowing unlimited posting bids or setting a cap at some amount higher than $20 million acceptable to Rakuten. If (2), I’d demand at least a $40 million cap, since there’s no doubt in my mind that at least one team would happily post that amount for the opportunity to negotiate Tanaka.
One thing that MLB’s reported proposals say to me, in that they are likely to result in the very best Japanese players remaining in NPB longer, is that given the choice between getting the best players in the world onto MLB rosters and putting the best product on the field for its fans or maximizing MLB profits, MLB will make the latter choice every time.