One of more intriguing free agents available this winter is 25-year-old RHP Masahiro Tanaka. Unless you’ve been living under a rock for a few months, I’m sure you’ve heard bits and pieces about him and his potential arrival in the United States. Just in case you’ve missed some of the details, allow me to fill you in.
According to a 1998 deal with Nippon Professional Baseball (NPB), MLB teams cannot just take a player from a Japanese team without compensating said team. That’s where you hear about the “posting fees” for Japanese players that hope to come to the United States. Until this offseason, MLB teams blindly submitted bids to the player’s NPB team. The highest bid won the right to negotiate with that player. If the MLB team was unable to come to an agreement, and the player stayed in Japan, the posting fee was returned. Since you had no idea what your MLB competitors were bidding, you had to submit an offer that would assure you landed the negotiating rights. To date, Yu Darvish has attracted the highest posting fee – $51.7 million – just edging out the $51.1 million bid the Red Sox made for Daisuke Matsuzaka. Remember, this money is before the team even establishes a contract with the player. (For example, the Rangers gave Darvish a six-year, $60 million deal on top of the high posting fee, meaning their total investment is around $111 million). I should add that these posting fees do not figure into a team’s salary cap figures. So teams like the Yankees, who were rumored to want to be under the salary cap (even though that plan may be out the window now), would have liked the fact they can make an absurd posting bid that does not take up cap space.
However, this offseason, MLB and NPB rewrote their former agreement and put a cap on the posting fee at $20 million. This obviously upset the owner of Tanaka’s team, the Rakuten Golden Eagles, who had been looking for a huge payday this offseason from Tanaka’s likely record posting fee. There was some debate that he may choose not to post Tanaka because of this, but that decision carried some risk. In the relatively near future, Tanaka would be a free agent and his team would get exactly $0, because at that point he could just come to the U.S. without a posting fee. Even though the Eagles had been looking forward to a posting fee north of $50 million, $20 million is better than nothing. At one point, there were theories that Tanaka and the Eagles may try to circumvent the posting fee. The owner made a throwaway comment about how Tanaka would help pay for improvements to their stadium (which was heavily damaged in the 2011 earthquake and tsunami). MLB said they will be keeping an eye out for deals such as this, and that $20 million is the limit.
So what does any of this have to do with the typically thrifty Indians? The Indians have supposedly expressed interest in Tanaka, although to be fair, probably every team in MLB is interested. He’s had an ERA of 2.50 or lower over the past five seasons (he went 24-0 last year as Rakuten won the NPB championship), and two of the past three years he’s had a WHIP under 1.00. When you take his success, and his relatively young age, he’ll be an asset to any team, even if his stuff doesn’t translate as a number one starter in MLB. The posting fee cap actually means that pretty much any team can say “Hey, I’d pay him $20 million to talk” and can talk to his agent about a potential salary. There are a number of theories that this low posting fee will help smaller market teams. Obviously, it will help them through this posting fee stage, since they don’t have to make a potentially risky, blind bid. I can’t see them having much of a chance after that point though. The fact that so many teams are interested will drive his asking price through the roof, likely far beyond what he’d receive under the old posting system when he could only negotiate with one team. Sure, that one team didn’t want him to turn them down and return to Japan. But now, teams will be drooling at the thought of his services. In my mind, this deal basically takes the money out of the hands of Japanese owners and puts it in the hands of the players. As I mentioned above, the total investment in Yu Darvish was around $111 million. If you look at it in current terms, minus a $20 million posting fee, it would mean that a team could pay Tanaka $90 million and still come out relatively even with the Darvish investment.
Even though the Indians are likely to be outbid on Tanaka in the free agent market, his signing still could have implications for them. A lot of teams (and free agent pitchers) are waiting to see where Tanaka lands before doing anything else. Free agents like Ubaldo Jimenez are hoping that teams disappointed they missed out on Tanaka will turn to him as a viable “Plan B.” Both Chicago teams, the Yankees, Red Sox, Dodgers, Angels and Diamondbacks have seemed to be the most serious about Tanaka thus far, although he supposedly favors Los Angeles, Boston, and New York. Only one of those teams can get Tanaka. If nothing else, the rest of the free agent pitching market will finally get moving once Tanaka signs.