MLB Fixes Japanese Posting System

MLB and Japanese baseball have entered into an agreement that drastically alters the posting process. Now it is fair, instead of the old system that only benefited the Japanese teams.

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Masahiro Tanaka could be first beneficiary of new Japanese posting system.

Japanese players are bound to their teams for nine years, then they become free agents. Under the old system, if a player who had not yet reached free agency wanted to play in the U.S., his team would basically put him up for auction, or “post” him. MLB teams which were interested would submit a closed bid, and the highest bidder would get the right to negotiate with the player. The Japanese team got to keep the posting fee.

So when the Rangers desperately wanted Yu Darvish, they won the bidding at a stunning $51.7 million — and that was before they signed him to a $56 million contract. It turned out they outbid the second place finisher by $35 million. Nice payday for the Japanese team.

Seeing how unfair this system was to the U.S. teams and the Japanese players, MLB demanded changes. After a lot of back and forth, the Japanese league caved and agreed. Now there will be a maximum bid of $20 million. If more than one team bids the maximum, the player will be allowed to negotiate with all of those teams to get the best deal. In essence, he will be a true free agent.

So the Japanese teams get less and with more teams trying to sign them, the players will likely end up with more. That seems about right.

This is expected to have immediate ramifications. Masahiro Tanaka, who finished 2013 with an impossible record of 24-0 with a 1.27 ERA, was expected to be posted with a winning bid of around $75 million. Now, his angry team (the only Japanese team to vote against the changes) may not post him at all. If he is posted, expect a dozen teams to put in the maximum bid, allowing Tanaka to pick his team and his deal.

I have written in the past how insane it is to give a combined $100 million or so for an unproven Japanese player. It backfired with Daisuke Matsuzaka, but Yu Darvish looks good so far. With the new changes, the combined price tag should come down. It will still be too high, but at least it will be more reasonable.

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