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masahiro tanakaAccording to a report out of Japan, NPB is prepared to accept MLB’s proposal for a new posting system that would cap the bids teams can make for the rights to a Japanese player whose rights are controlled by a team in NPB. That cap – or maximum bid – would be just $20 million. A number of Stateside reports suggest that the Japanese report is legitimate, and a deal will be approved tomorrow. We’ll see.

The obvious question? If there’s a maximum bid, what happens when multiple teams bid the maximum? Well, according to Joel Sherman and Bill Shaikin, the Japanese player will have the right to negotiate with all teams that make the maximum bid. Translation? With a mere $20 million refundable maximum bid in place, there will be a lot of teams involved in Masahiro Tanaka’s process.

If the system ends up being a $20 million maximum bid, wherein only the team that actually signs Tanaka pays the post, and wherein all teams that make the maximum bid get to negotiate with him, I don’t really see any reason why every single team would not bid the maximum amount. There’s nothing to lose, since you pay the fee only if you sign him. In essence, such a system would usher Tanaka into free agency – albeit one that comes with a $20 million markup.*

*(As for Tanaka, specifically, this system might take the Yankees out of the picture, given that his salary will be much closer to a free market salary. If they’re still hoping to stay under the $189 million luxury tax cap, it would seem much more difficult for the Yankees to do it while still signing Tanaka (and Robinson Cano).)

That system probably accomplishes what MLB is looking for (driving posting fees down; though contracts will go up), and definitely accomplishes what the NPB players are looking for (more money from MLB teams (sorry, Yu Darvish, you just lost about $50 million)). NPB teams are probably not too happy about this system, unless there are other details that haven’t yet come out (and there very well might be).

The system feels, overall, like an acceptable one for the Cubs, who will be able to pony up $20 million for the Japanese players they want, and who – in the future – will have the revenues to support large offers to those players. As for Tanaka, the Cubs could find themselves in a bidding war with the Dodgers, Yankees (but see the note above), Red Sox, and many others. I suppose that was always going to be the case, but now there’s no chance to simply lap the field with your posting bid. You’ve actually got to negotiate with the guy, and beat the field that way.

My suggestion would have been (and has been in the past) a non-refundable posting system. The NPB team posting the player gets to collect all bids, and no maximum bid is necessary. The highest bid wins the rights to the player, but pays only 50% of their bid if they can’t sign the player. In this system, bids are reduced organically, but the total payout to the NPB team could be higher. The Japanese player has more leverage (because the winning team loses 50% of their bid if he doesn’t sign), but not nail-their-balls-to-the-wall leverage (because it’s only 50%). Costs down, more money to the Japanese player, maybe as much money to the NPB team. Everyone wins.

It’s important to keep in mind that the decisions being made about the posting system are broader than Masahiro Tanaka. The posting system has to govern the relationship of the parties, and dozens of players of varying abilities, for a long time. A system that makes sense for the Tanaka situation, but no other future situations, isn’t going to be a system the parties want.

  • North Side Irish

    Bob Nightengale ‏@BNightengale 2m
    The #Cubs signed left-handed reliever Wesley Wright to a one-year contract believed to be for $1.425 million.

    Finally got a second lefty out of the pen…

    • Kyle

      Is he hurt or something? Those are great numbers.

      • Serious Cubs Fan

        He only a lefty specialist. a very similar pitcher to james Russell. LOOGY reliever

        • Kyle

          His stat line is way better than Russell. I wish Russell K’d a guy per inning.

      • Serious Cubs Fan

        Great signing though

      • hansman

        I like how the Cubs do good on a FA signing and your first thought is there must be something wrong.

    • Ruh roh

      And so soon on the heels of the Kottaras signing. Wow what an offseason so far! Buckle up Cub fans !!!!!!

      • ClevelandCubsFan

        Hahahahahahahaha. Wait that was the all too expected snark at a low level Cubs move. It’s not really funny at all.

  • Mike F

    Nice little signing. Just saw that…..

  • Assman22

    Tanaka is likely to still be posted…NPB wants to keep positive relations with MLB going forward…if Rakuten does not post Tanaka in spite of new rules, NPB will lean on Rakuten to do so anyway…best case scenario in the eyes of Cubs FO: sign Tanaka, let Price trade go it’s course, and then trade Shark for SP prospects to compete in 2015 and beyond…

    • Tony S.

      Thanks for the words, always appreciated!

    • http://deepcenterfield.blogspot.com Jason Powers

      I guess if I were Rakuten, I’d have problems with someone telling me to take a 60%plus discount (20M/50M+) for my asset.

      What is in it for them?

      If someone told you we must take lower value for Samardzija, would we be so happy?

      Especially after he went 24-0?

      • YourResidentJag

        I think this is trickier that Assman is making it as well. He may post but it may not be until mid January.

        • Mike F

          I think you are reading too much into comments. Assman is not wrong and it a pretty bright, connected and intense dude. I have a lot of respect for him. He has pretty good insight in the way Japanese culture works from his comments as I see it similarly. And all he gave you was the of best case scenario, which I buy. I don’t see anything that states he says the Cubs sign Tanaka. I see him as likely right that is there best case, but getting it done in my view is highly unlikely.

          As far as Japanese culture it is not US based demonization welfare. There will be strong pressure for Rakutan to run with the pack……

          • Kyle

            What little I’ve read about the owner of Rakuten doesn’t make it seem like he’d be the type to give in to that sort of pressure.

            • Rebuilding

              The owner has 2 other problems if he doesn’t post Tanaka (1) Top Japanese amateurs will be reluctant to sign with them and (2) Tanaka is likely to just sit out because why jeapordize $100 million + for $3.8 million

              • YourResidentJag

                Really you think Tanaka will sit out? Hmmm…I don’t know. Secondly, it’s the owners discretion. It’s like saying no FA will ever sign with the Astros because of the recent reports of the ownership’s philosophy of austerity.

                • Rebuilding

                  I don’t know him, but if someone denied me the chance of making upwards of $120 million and wanted me to risk my arm for $3.8 million instead I would certainly sit out. He can make that much next year too.

                  Alternatively, what stops Tanaka’s people from kicking back $10 million or so additional to the owner for posting him?

                  • Kyle

                    I would assume that if he voluntarily sits out, he doesn’t accrue a year of service and his free agency remains two years away.

                    • Rebuilding

                      I assumed that was true when I wrote my post

                    • Rebuilding

                      If he makes it clear to them that he’s never pitching for them again – my guess is he’ll get posted

                    • hansman

                      He could pull a Soriano. Would give his arm a year of rest and he would still be in his prime.

                  • YourResidentJag

                    I think you’re assuming too much that all the bugs have been worked out between NPB and MLB.

                    • Rebuilding

                      What am I assuming? I don’t think it’s really an issue because I think he’ll get posted no matter what. But if the owner refuses initially there are plenty of ways for Tanaka to exert pressure. “Ouch my hamstring is tight, probably going to have to sit out the season”

                    • YourResidentJag

                      So, all the bugs have been worked out? I don’t seem to see that.

                    • Rebuilding

                      I don’t know what you’re talking about. Supposedly they are printing out the agreement right now, so I assume the bugs are worked out. Yes?

                    • YourResidentJag

                      @Rebuilding, I don’t get your points, either. You’re acting as though this is totally a win-win for everyone. The NPB and its teams still have businesses to run. The NPB could say something but personally owners in the NPB could hold back deals. It also makes no sense for Tanaka to stop pitching. This is because of what we know about SP in their primes and pitching related injuries unique to SP and because of Kyle’s take on service time related to Tanaka’s becoming a FA then if he should go that route.

          • YourResidentJag

            Never said they could or would. Concerned about the lowered max posting fee and how NPB continues to react to it, as they should.

          • Assman22

            Bruce Levine and Rosenthal broke it open this morning…great in depth article by Rosenthal…Cubs willing to go big on Tanaka…will trade Shark afterwards unless they’re blown away beforehand…

            • Kyle

              If we’re adding Tanaka, the team starts to look decent enough that I’d want to consider holding on to Samardzija until we’re out of it in 2014.

              • hansman

                If you add Tanaka, keep Samardzija and add Choo, next year’s team get’s interesting in a hurry.

                • Kyle

                  I mean, probably not good enough, but close enough that I’d want to see a couple of months to be sure.

                  • hansman

                    Hopefully get positive variance equal to the negative variance we saw last April

                • Assman22

                  Trading or extending Shark isn’t about 2014…”the plan” is all about 2015 and beyond as far as being competitive…Tanaka is entering his age 25 season and when trading Shark, Cubs will look for near-ready SP prospects that will contribute with him in 2015 and beyond…or Shark’s price will come down enough to get an extension as he strongly does not want to leave Chicago…Choo isn’t coming to the Cubs, doesn’t fit…

                  • YourResidentJag

                    Well, in that case….the only one I see is Skaggs. Great.

      • hansman

        Well, you could get $20M now or nothing when Tanaka walks in FA or gets hurt this year.

        It’d be like the Cubs, in 2019, not signing a TV deal because they didn’t get the Dodgers deal. You take what you can when you can.

        • sans

          You’re struggling.

          • hansman

            I encourage you to point out the flaw in my reasoning. If I am wrong, I will gladly admit and rethink my position.

            • Bwa

              The flaw in your reasoning is that they can let him pitch for them and help them win, which brings fans to the park and makes them money while they control him for the next two years. He won’t increase their revenue by 20 mil but is be surprised if he didn’t help get them 5 mil a year

              • hansman

                If it’s only 5M, you sell him now.

        • Kyle

          Well, we don’t know for sure that he’s going to get hurt in the next two years before he’s an FA.

          And there’s the little side note they are a baseball team and they may want to keep their good baseball players for the purpose of winning baseball games (foreign concept to Cubs fans, I know).

          I suspect they’ll take the $20m, but it’s not like they get nothing from keeping the star player of a championship team.

          • hansman

            Ya, I guess if you want to debate just to debate then we could hash out a lot of different things.

            • Kyle

              You asked for the flaw in the logic to be pointed out.

              The Cubs going without a TV deal gains them nothing.

              Rakuten holding on to their best baseball player is definitely not nothing.

              • hansman

                It was an imperfect analogy but aren’t they all?

              • hansman

                You could just swap out not getting a TV contract with holding on to the contract they have. I am sure CSN wouldn’t mind going year-to-year on an undervalued TV deal.

          • roz

            “they may want to keep their good baseball players for the purpose of winning baseball games (foreign concept to Cubs fans, I know).”

            Yes, because no MLB team ever has traded away a great player before their contract was up because the player would leave in free agency and the team would get nothing. Please try harder next time.

            • Kyle

              Whatever that was, it wasn’t a response to anything I said, although I think that’s what you intended it to be.

              • hansman

                I get his point, avoid the downside by getting what you can now (which is the same as what you would get next offseason, minus his production (factoring in for injury/ineffectiveness risk).

                • Kyle

                  I don’t disagree with any of that.

                  There’s something to be gained by keeping him, there’s something to be gained by letting him go. We can all discuss which we think is more valuable, but it’s not as if it’s black and white.

                  • hansman

                    Of course it is. We are discussing him on the internets.

                    Although I remember you not liking the gray middle in previous discussions.

              • roz

                It was a response to your cheap shot at the Cubs and the FO. You made it sound like a team that trades away a player because they’re going to leave in 2 years doesn’t care about winning games, and oh by the way that’s hilarious because the Cubs clearly don’t care about winning games. The shot at the Cubs was just pointless and didn’t add anything to your comment. There are always criticism that can be leveled at an MLB team but your comment just sounded immature.

          • Whiteflag

            I think they take the $20 million too, but wouldn’t be surprised if they decided to hold onto him for a year. Even if he gets injured next year, some team will pay the $20 million dollar posting fee.

        • http://deepcenterfield.blogspot.com Jason Powers

          I think it is about the idea that I have to cede to the wishes of a foreign league (MLB) and set a well below market price on my return on a heavily desired asset, as his value is at its peak. (A perfect 24-0) If we are about free trade, the restrictions on what I (theoretically) do with my asset (Tanaka) would indeed, piss me off.

          That said, I am sure the owner will be pressured, and cede, if rational, based on internal discussions we are not privy to.

          But, if he does play hard ball, then whenever Tanaka’s contract runs out will determine it. And the owner will use his asset as he sees fit – some people will do irrational things when forced to do things they find objectionable to their sense of fairness. (If he’s a billionaire – 20 million is 2% of his wealth. He could make that up with stock rises alone.)

          And he’ll face repercussions within the NPB.

          But as I said, if the tables were reversed, we would be pretty peeved not to achieve a maximum return on Shark.

          Depends on what side of the discussion you are sitting from.

          Cubs: Are they ready to put 125M (20M post +105M) on the table? (As I think the price has gone up for pitching…)

          We will see. 4 months to we play games that count.

          • Mike F

            Yes the pressure will be on Rakuten but it is not just internal it is also cultural that seems to evade westerners. And of course Japan is not and has to been for a long time about free trade, they practice severe quotas and tariffs to import goods. They also strategically manage their currency as is in their best interest.

            The price has indeed gone up and I think all this will do is put years on the ultimate contract and backloading will be more extreme. I will not be shocked to see your numbers very light. No disrespect or lack of liking your stuff, I just think you are underestimating the Yankees, Dodgers and Red Sox appetite to pay to win.

            • http://deepcenterfield.blogspot.com Jason Powers

              I am aware of Japanese culture a bit…I responded to that on another post to Brett.
              http://www.bleachernation.com/2013/12/04/mlb-and-npb-reportedly-on-the-verge-of-a-maximum-bid-posting-system-and-the-max-is-just-20-million/comment-page-1/#comment-478148

              And no, I have NOT underestimated the Yankees at all. In fact, I think he’s a very plausible go there first, LA Dodgers are close, even the Tigers could find some use in him (younger than Scherzer – and he wants similar cash) – but honestly, LA and Detroit don’t need another arm.

              I did a very thorough analysis at 150M for both 20 and 30 WAR and the cost-benefit dependent on the time value of money factor. I had the posting factor much higher. But MLB negotiated it down to pittance. Everyone will best out their checkbook. What their pitch is to the pitcher, is another discussion.

              I think others are OVERESTIMATING the Cubs pocketbook. But hey, let them prove me wrong. It no skin off my nose.

  • ClevelandCubsFan

    According to this Tanaka made about $3.88m in 2013 (or 2012? not entirely clear). In any event, maybe $20m is worth it to an NPB club. They could get 5 Tanakas with that cash (assuming there are 5 Tanakas available. But you get the point, They can probably score 5 pretty darn could ballplayers with that cash. So $20m might be worth a lot more to them than to MLB clubs. But I’m still a little concerned.

    http://notanotherbaseballblog.wordpress.com/2012/12/03/what-do-npb-baseball-players-get-paid/

    • Bwa

      Don’t forget the 20 million is a one time thing. So you can only get 5 really good players for one year or one really good player for 5. Or you can keep tanaka another year and let him walk next offseason with one year left.

  • cubsin

    I can’t imagine why Rakuten would post Tanaka this winter when they could keep him for next year, win more games and sell more tickets, then decide whether to cash in for $20 million or keep him another year and let him leave as a free agent. I doubt he’d generate an extra $20 million in revenue in one season, but I don’t even understand the finances of MLB teams.

    Even if he’s injured next year, there’s a good chance at least one team would be willing to risk $20 million for him, then adjust their contract offer down significantly due to the injury. They’d only lose the $20 million if he blew up his shoulder or his arm fell completely off.

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