Tanaka Update: NPB Willing to Accept Maximum Bid Structure, and Posting Fee Might Not Be Issue for Cubs

masahiro tanakaYesterday, we discussed at length the possibilities for a new posting system between MLB and NPB for Japanese players, which included the possibility that the system could involve a “maximum bid.” (The piece also digs into the Cubs as a stealth candidate for Masahiro Tanaka, according to executives from at least two teams. (Which calls into question just how “stealth” they could be.))

Now, Jon Morosi reports that NPB is indeed willing to accept a new posting system that features a maximum bid. In such a system, multiple teams could bid the max amount, and it remains to be determined how the at-issue player’s negotiating rights would actually be determined. It’s possible that the player will be able to negotiate with all teams that bid the max, or could choose only one team with which to negotiate (of course, if teams use back-channels, the effective difference between those two things could be minimal). MLB and NPB are still negotiating just how high the max bid would be.

This is all exceedingly important to the possible posting of Japanese righty Masahiro Tanaka, the 25-year-old who has dominated in Japan for years. Without a posting deal in place soon, Tanaka will not be posted this year.

It turns out that could bad news for the Cubs, who are increasingly linked to Tanaka. The expected giant posting fee? It really might not be a problem for the Cubs.

To wit: Gordon Wittenmyer reports, among other things, that Joel Sherman’s suggestion yesterday about the posting fee not being an issue with respect to the Cubs’ spending restrictions is accurate. In other words, for whatever reason, the (reported) restrictive covenants tied to the loans the Ricketts Family took on to purchase the Cubs do not apply to a one-time outlay of cash like a posting fee. Confirming that fact, Wittenmyer says that some on the Cubs’ business side are already “boasting” that the Cubs might land Tanaka. I doubt whether anyone can have that level of confidence right now given all of the uncertainty tied to the posting process, but the mere fact that anyone on the business side is telling other folks that the Cubs might land Tanaka is a good sign. It means that the Cubs do believe they’ll have the money to make it happen – and who better to know that than the business side?

Knowing all of that … do we even want a maximum bid system put in place? If Wittenmyer’s and Sherman’s sources are correct, and if the Ricketts Family is willing to do what it takes to land Tanaka, then the Cubs are suddenly in the same position as the Yankees: the posting fee has nothing to do with any payroll restrictions (the luxury tax cap, in the Yankees’ case), and there is a unique incentive to bid high. In a blind system, maybe the Cubs actually could win after all. (And the Yankees sure are getting close to their maximum payroll level.)

It’s mostly an academic discussion, because it seems like a max bid system is going to carry the day. I guess we just hope that the max level is fairly high, since, going forward – not just for Tanaka, but for all players – the Cubs project to be one of the more financially-able organizations (eventually).

I won’t say that I’m feeling confident about the Cubs’ ability to land Tanaka, but, for the first time, I now really do think it’s a strong possibility. As a 25-year-old pitcher who can be had in his prime for only money, Tanaka has always made a ton of sense for the Cubs. If the money isn’t a problem, why wouldn’t the Cubs be aggressive?

Now we just have to see if MLB and NPB can come to an agreement.

Brett Taylor is the editor and lead writer at Bleacher Nation, and can also be found as Bleacher Nation on Twitter and on Facebook.

223 responses to “Tanaka Update: NPB Willing to Accept Maximum Bid Structure, and Posting Fee Might Not Be Issue for Cubs”

  1. The Logos

    I have to say, I want the Cubs win just as much as the next person. But, I also think that one’s personal belief system should not change based on what is best for one person, family or team.

    That being said, I like this max bid posting system, but I do not want it to be a high amount. Small-market teams should have access to players as much as big-market teams, even if it hurts the Cubs in particular scenarios.

    I want a fair game, and I want the Cubs to figure out a way to win within those parameters that even the playing field for everyone.

    1. WGNstatic

      I agree with your sentiment, the rules should be in place for the best interests of MLB, all teams, not just the Cubs.

      However, one side of this discussion that I feel for are the NPB teams. They are, in essence, trading away their elite level talent. Imagine our feelings if the Cubs had been told there was a maximum value they could receive last summer for Matt Garza, and that maximum was considerably less than what the Rangers were willing to pay. The low maximum bid doesn’t seem quite as fair in that regard.

      I will say, the one party in these negotiations that I really don’t sympathize with are the players (and agents of course) who are hoping that more of the total $$ will head their direction. I am a huge pro-labor guy, and I believe whole-heartedly that players should reap the benefits of their unique skills. That said, the NPB players are under contract in Japan, and are well paid. Tanaka is two years away from free agency, if his goal is to maximize his earnings, take the same risk that Samardzija seems willing to take, play for two years then cash in.

    2. Funn Dave

      Agreed on all counts.

  2. Coldneck

    But is Tanaka any good? That seems to be lost in these discussions.

    1. wilbur

      I’m of the opinion you do not want two pitchers on your staff with the same speciality or gimmick pitch. Both tanaka and shark are splitter pitchers, having them both face an opposing team in the same series could diminish the cubs pitching staffs effectiveness. I think this is also true for curveball pitchers too but maybe to a lesser extent. Major league hitters can adapt and fast, So if the cubs are to sign tanaka, then they should trade shark. If they resign shark, don’t sign a pitcher that is going to reduce the effectiveness and value of the guy you just signed. Do you know of any major league team with two starting pitchers who relied on the splitter? I don’t and I think there is a good reason for that.

      1. Edwin

        Hmmm. Interesting. I know I just read an article somewhere about the effect of having a knuckleball pitcher can help the rest of the staff, but I’m not sure the effect would be so large for “normal” pitchers/pitches. Definitely not large enough that the Cubs would feel forced to trade Shark.

        Not many pitchers throw a splitter, so its tough to find a roation that has two in it. In 2012 Dempster and Samardzija both threw splitters for the Cubs.

      2. Edwin

        Even with curveball pitchers, I don’t think it rings true. The Chris Carpenter and Adam Wainwright are basically the same pitcher in terms of what they throw, and they had plenty of success. Shelby Miller is a fastball/curveball pitcher, Jamie Garcia is Fastball/curveball/cutter (similar to Carpenter and Wainwright).

        Or Look at the Rays, with Cobb and Moore.

        If there is an effect like you’re describing, it’s probably so small that it’s not so important, compared to the actual talent level of the pitcher.

      3. Jim

        Well you don’t have to pitch them back to back. Put Travis Wood in between them to change it up.

    2. BenRoethig

      If you look at the NPB numbers, he’s as good as anyone who’s pitched in Japan in a while. Pretty much on the level of Yu Darvish. However, success in Japan doesn’t always mean success here.

      As for his stuff, he has a flat fastball in the high to mid 90s. That can be very hittable in the Majors, but he seems to have Greg Maddux -like control of his pitches. Where his FB might lack, his splitter and curve are said to be outstanding. He’s also been a workhorse for innings.

      My person feeling is that the Cubs should go all in. It’s going to take him a season or two to get accustomed to the hitters. He should slide into a solid 1A – 2 by the time the Cubs start getting good.

  3. Bonesinis

    Boasting? I hate counting the Chickens before they hatch. Feeling good about something is one thing but pride comes before the fall. Just shut up and do your jobs guys. Keep the course and let the chips fall where they land. Geez.

    1. Spriggs

      I wonder what the context was with the boasting thing. It’s hard for me to imagine them boasting about anything right now really.

    2. wilbur

      boasting on the business side? wasn’t that the source for wittenmeyers on the cubs landing girardi? Sounds like crane kenny has been in the eggnog early, again…

  4. Nate Dawg

    Looks like Wittenmyer was checking out the comments section here yesterday…

    1. CubFan Paul

      Rebuilding was right (if Wittenmyer was leaked false offseason info/rumors)

      1. Nate Dawg


  5. fortyonenorth

    I wonder if some of the FO’s offseason decisions–e.g. trades and FA signings–are predicated on how the Tanaka thing plays out. If they land him, they suddenly have a very nice rotation and, by adding a few key pieces, could be unexpectedly competitive. If they don’t sign him, then it’s business as usual for another year or two.

    1. cub2014

      41 north, i think you may be on to something
      if they get tanaka, they are a sneeze (a Choo)
      away from being competitive.

      we shall see what happens over the next month.
      now is the time to hope, in a month we will
      know what there plans are for 2014.

      Choo on a 5 year deal and Tanaka would both
      fit in with the long term plan.

      1. CubFan Paul

        Being competitive next year is all I ask for.

        1. Jono

          that’s it? I’m asking for long term sustained success.

          1. CubFan Paul

            As in, the last two years theo&Co purposely fielded below .500 teams to boost the farm and secure top Draft picks.

            I’m not saying field a 85plus win team in April but fix/add to the bullpen, sign/trade for an OF bat, & bring back upper level pitching in any Samardzija trade.

            But another protected pick in 2015 does sound good

            1. C. Steadman

              there have been tiny rumors of Cubs looking at Andrew Bailey to solidfy the pen

            2. hansman

              I think you grossly underestimate how close to competative last year’s team was. With just some better sequencing of hits, they would have been .500 on June 1. Last April was an anomaly for the ages.

              1. CubFan Paul

                “With just some better sequencing of hits, they would have been .500 on June 1″

                You stat guys kill me/cracks me up.

                1. hansman

                  Really, so April wasn’t an anomaly? The Cubs had the offensive talent to post THE worst offensive season in history?

                  1. aaronb

                    Yes….The 2013 Cubs had among the worst talent in recent baseball history.

                    The best offensive player on the team was a non-tendered platoon 4th outfielder.

                    1. caryatid62

                      They weren’t even the worst offense in their own league.

                2. Hookers or Cake

                  Wasn’t the cubs run differential even in June? On paper, yes the Cubs where a .500 team before they started flipping guys.

                3. wvcubsfan

                  Would you prefer “more clutch hitting”?

                  It’s true there were many close losses, and based on “projections” they should have had a better record than what the standings indicated. I do think much of that was certain players playing “over their head” and as such was not sustainable, but at the time we didn’t think that the slump Castro, Rizzo and to a lesser extent Barney were in would last either.

                  1. CubFan Paul

                    I prefer to watch the games.

                    1. Jay

                      You win 54 and you lose 54 before the season even starts. It’s what you do with the other 54 that count. Good teams win those close games, crap teams (like the Cubs last year) lose them. Being “close” doesn’t mean much.

                    2. Junior Q

                      Yeesh you actually watch the games? Not me, I only like baseball because I can pore over box scores on a computer screen. If you ask me, the perfect baseball game is none at all since the actual playing of baseball is only a means to provide us “stat guys” with our precious slash lines.

                    3. hansman

                      You “eyeball” guys crack me up.

                    4. Drew7

                      Right, since anyone that spends time learning that there fancy math don’t have time to watch no games.

              2. YourResidentJag

                So .500 is competitive. Huh?

                1. wvcubsfan

                  I would say it is competitive, not competing for a playoff birth, but I think this team needs to start taking some baby steps.

                  1. YourResidentJag

                    Kind of like signing a big FA in any yr before any of the core comes up and winning 80 ballgames. Most on here would tell you that’s not competitive. Not necessarily disagreeing with that, though.

                    1. wvcubsfan

                      I still think if the right FA is available they will sign him regardless of when the so called core is ready. Even if all of the kids people are clamoring for make it to the bigs there is still a need for pitching and a catcher. This is assuming that Olt/Bryant 3B, Baez/Castro SS, Alcantara/Baez/Catro 2B, Rizzo/Vogs 1B, Almora CF, Soler RF, Bryant/Rizzo/Lake LF; which if anyone thinks that’s going to happen well as George Strait sang I’ve got some ocean front property in AZ for you.

                    2. YourResidentJag

                      I don’t think that’s my point though.

                  2. cavemencubbie

                    No one can tell me the FO seeing the Cubs out of contention for a playoff spot, didn’t tank the season by flipping what talent they had for draft picks. Was it wrong? Who knows, but don’t give us all that crap about not tanking a season. BS someone else.

                2. Jono

                  “competitive” is subjectional. Some people consider a .500 team competitive b/c there’s a 50/50 chance of winning on any given day. Some people think that being competitive means being in a playoff race.

                  I’ve used the term in both ways, before.

                  1. YourResidentJag

                    So, then I could think being a .500 isn’t competitive, which reaffirms what I’ve said in the 1st place.

                    1. Jono

                      I don’t know what you said in the first place, but I wouldn’t be too quick to think that your opinion reaffirms your opinion

                    2. YourResidentJag


                    3. Jono

                      haha, heh? You claimed that your opinion of what competitive means reaffirmed what you said in the first place. Normally, one’s own opinion isn’t used to reaffirm one’s own opinion. Normally people use objective evidence to reaffirm an opinion, not more opinion.

                    4. YourResidentJag

                      No, I was merely agreeing with you on competitiveness being a subjectively misguided term.

                    5. Jono

                      ok, got it, sorry. Another misinterpretted comment.

                  2. frank

                    You may have meant “subjective” but I kind of like “subjectional” . . .

                3. josh ruiter

                  Yes, .500 may actually be the very numerical definition of competitive. “as good as or better than others of a comparable nature or sport.” By that definition .500 is essentially the median by which all else is formulated and therefor would be deemed…competitive. IF they are better than half, and worse than half, that means, by lanuage, that they are capable of winning every game 50/50. That is competitive.

                  1. YourResidentJag

                    I just don’t see it that way. If you do, that your thing.

                    1. Funn Dave

                      Well, that’s what the word means….

            3. Jono

              I think I misinterpreted your comment.

        2. WGNFAN

          Wont happen, we are in need than more one good SP and a few parts.
          Becoming buyers because they got a 25 yo, possibly with a long term contract, unproven, never thrown a ball at MLB SP, is WAY too risky.

          Goes with the plans, if he does well, as the prospect come up, then you can start filling holes with FA.

          1. Jon

            keep drinking that kool-aid man.

          2. Rebuilding

            Signing top of the rotation talent when they are about to hit their prime is THE PLAN

      2. Sacko

        Choo connected to Tigers Iv heard

        1. D-Rock

          I’m sure we are kicking the tires on Choo, but the Tigers or Rangers will probably overpay for him like the Yankees did on Ellsbury.

    2. Funn Dave

      I doubt it. Besides, the rotation wasn’t our issue last year; offense was.

  6. Blackhawks1963

    Unless Theo Epstein, Jed Hoyer and Jason McLeod are 100% convinced via their scouting analysis that Tanaka is the real deal and can become a true frontline starting pitcher in this league, then I hope we lose out in the bidding process. Unlike the Yankees or the Dodgers, we cannot afford a monster swing and a miss on Tanaka. We are talking about a humongous amount of money that can be used in other places, especially since the Ricketts seem to really being putting the financial clamps on.

    So again, I trust Theo and company on this one. If they think Tanaka is worth it, then I expect we have a fair chance to get him under the new rules. But if they take a pass on being the highest bidder then I will be very okay with that as well, because that will mean they just aren’t sold on Tanaka being the wondrous special player.

    Just don’t mess this up please. Can’t have this kind of mistake.

    1. noisesquared

      I think if they bid, they will be very confident in his success. At this stage, I really don’t see blindly throwing money at questionable players as this FO’s MO.

      However, based on everything posted above, this maybe one of the rare opportunities where the Rickett’s can flex their financial muscle and spend like a big market team, regardless of the outcome.

      1. Funn Dave

        Rizzo…Jackson…Soler…Castro (although he didn’t seem all that questionable at the time)…I don’t know, blindly throwing money at questionable players just might be their MO after all.

    2. Chad

      Garza (ha) and Jiminez are still out there. Choo still is, an extension for Samardzija is a possibility. What if they trade for Anderson? What if they trade for x y z?

      Lots of unknowns and it is not even the winter meetings yet. Chill out man. Not every team lays out their plans for an off-season to their fan base. You are not in the “need to know” ring.

  7. TulaneCubs

    For the purpose of the Cubs and this particular player, the system that would seem to benefit them the most is a max posting fee in the ballpark of $50M. Reason being is that it’ll weed out some of the smaller teams from hitting that, while still leaving lots of money left for the contract negotiations. The Yankees have seen Tanaka as a way to get around the luxury tax, but if they still have to negotiate after the posting fee, it’s likely the Tanaka contract will start to get up there. If the contract ends up being 6 years at $84M, that could be a problem for them with the luxury tax (again, depending on how the rest of the offseason shakes out).

  8. mjhurdle

    “It means that the Cubs do believe they’ll have the money to make it happen – and who better to know that than the business side?”

    Well, I personally trust all the posters that constantly repeat that the Cubs are broke and do not have the money to land Tanaka over someone that actually works for the Cubs.

    1. beerhelps

      Absolutely the way to go. I may start taking suggestions from posters here on all of my life decisions.

      1. Fishin Phil

        I think I would go with a Magic 8-Ball instead. Much safer.

      2. hansman

        I already did that. I now own 17 cars, traded my brazillian supermodel wife for Honey Boo-Boo’s mom and 10 cases of Mt Dew, traded my Ferrari for 3 Nissan Cubes and burnt my couch for something to do yesterday.

  9. ETS

    It’d be nice (for the cubs, for this year anyway) if they went to the worst record of the max bids gets negotiation rights system.

  10. Featherstone

    Despite the Yankees recent signings Tanaka could still pretty easily be had and still remain under the luxury tax with or without an A-Rod suspension. SInce the posting fee is not counted against the luxury tax and only the contract is counted it wouldn’t be all that hard to envision a scenario where signing Tanaka counts pretty minimally against the imposed threshold.

    Darvish got $56/6 on his contract with a $51M posting fee.

    Let’s say the Yankees post $100M on Tanaka, he probably only gets a touch higher than Darvish did. Say maybe, $60/6.

    That only means $10mil per year against the Yankees luxury tax calculation which is quite doable even with A-Rod counted against them.

    Since the Cubs are not trying to get under the luxury tax threshold you would imagine they would want a scenario where the maximum posting bid is high (say $50M) but capped so that they can shift more of the total outlay into the contract further dis-incentivizing the Yankees.

    This is all moot if the A-Rod suspension happens because then the Yankees can go crazy under any scenario.

    It certainly is a little exciting to see that the Cubs really may have a shot at a player to help them now and in the future. While also starting to see them leveraging their big-market advantage when the opportunity arises.

  11. Eternal Pessimist

    “the posting fee has nothing to do with any payroll restrictions (the luxury tax cap, in the Yankees’ case”

    Brett…I’m not sure if I’m reading this right. Does the posting fee now count against the salary cap? If so the Yankees lose the advantage they were looking for in signing him (vs signing some other MLB FA…except they could lose a pick depending on who they sign).

  12. itzscott

    Any team that’s serious about signing this guy would do the math to figure out what amount would put the Yankees over the luxury tax threshold, act to freeze them out and submit a bid above that number.

    Although here in NYC, Yankee fans feel it’s a birth right to be able to sign anyone they want and the opinion is that in order for the Yankees to be competitive, they’ll need a pitching staff that includes Tanaka.

  13. Ballgame

    It’s hard coming to the realization that Ellsbury is off the list of possibilities, but there’s no way we’d be content with those dollars/years. If the Yankees sign Cano, that’ll put the Cubs in the driver seat for Tanaka so let’s hope for that. I don’t think theo/Jed would put all of this financial risk in a guy they aren’t sure about. I think he’d be a big addition to the rotation and I’m still wondering what it’d take to get Kemp from L.A. We should offer something now while they’re still willing to trade him. Tanaka and Kemp would change a lot of people’s outlook in a positive way (obviously). I don’t believe it’d take one of the Big 4 to get Kemp…

  14. W_Francisco

    I thought if multiple teams bid the max amount, the team with the lowest winning percentage would have full rights?

  15. Jose's Eyelid

    Would like more info on this statement:

    “the (reported) restrictive covenants tied to the loans the Ricketts Family took on to purchase the Cubs.”

    I’ve seen this now a few places recently, and don’t recall it ever being discussed previously. Are the details of these so-called payroll restrictions public knowledge, or is it all innuendo, guesses and conjecture?

    Anyone have details? Thanks

    1. DarthHater

      The existence of the restrictions has been frequently reported. The details are not public knowledge.

    2. aaronb

      There are no details…

      It’s complete fiction people use to excuse the Ricketts extremely cheap ownership. If it was true then we would have never seen a 145 million dollar opening day payroll in 2009.

      1. DarthHater

        The sale of the Cubs to the Ricketts was not even approved until October 2009.

      2. CubFan Paul

        “we would have never seen a 145 million dollar opening day payroll in 2009″

        This makes sense for the 2010 & 2011 payrolls.

        1. DarthHater

          The loan agreement obviously could not prohibit the Ricketts from paying out on pre-existing contractual obligations. But it could put limits on new obligations.

          1. CubFan Paul

            They could of had a fire sale before 2010 if the restrictions are true

            1. aaronb

              Also the Ricketts family owns a good chunk of the subordinate debt. So the thinking that the Ricketts family loan covenants are preventing the Cubs from spending seems really flawed.

              Sam Zell sure didn’t seem to have a problem spending money on payroll. Why would he care now that he has sold the team?

              1. CubFan Paul

                Zell wanted the sale through a trust so that he could avoid paying taxes on the sale.

                I think the restrictions are false and Cubs revenues are being funneled into the trust to pay for the trust-loan.

                The ‘restrictions’ sound like another spin job

                1. cubsfan08

                  So? Then we should wait to complain until the loan is paid off. If we owned stock in the Cubs that what we would want them to do as a company. We have to stop thinking like we are politicians or something – budgets are budgets. Stick to them – please

                  I will not complain about the budget they have in place unless they start bailing on home grown talent ala the Marlins and other small market teams of the past (aka – refusing to resign them once they are FA eligible etc). That’s when I will put pen to paper and crunch some more numbers to find out whats going on – THEN make a decision if I deem the budget to be too low.

                2. hansman

                  So completely ignore what is being reported because it doesn’t fit your views.


                  1. aaronb

                    Where has it been reported? Its been nothing but passing conjecture as far as I can tell.

                    1. Rebuilding

                      Well, it was just reported in the Wittenmeyer piece you are commenting on for starters. And in about 20 other publications before that if you’ve been paying attention. Not to mention that is standard operating procedure for all bank loans of that size. They protect their loans through restricting what organizations can do

                    2. aaronb

                      The Ricketts family trust owns most of that debt. Zell has absolutely NOTHING to do with how the Ricketts are financing the deal.

                      It’s a red herring.

                    3. BT

                      Right, THEIR reporting is passing conjecture, your opinions on the matters which you have exactly ZERO access to the financial documents is absolute fact though, right?

                    4. Rebuilding

                      No, the Trust does not own “most” of that debt. There is probably about a $500 million loan outstanding to a syndicate of banks. There is no possibility that they made a loan of that size w/o certain restrictions. And the Cubs business side has leaked the nature of the restrictions if not the exact amounts. I’m sorry aaronb you are just wrong.

                    5. hansman

                      The Ricketts Family Trust does what is best for the Ricketts Family Trust, not what is best for the Ricketts family or the Cubs.

                    6. Rebuilding

                      @BT – I’m just telling you that I worked on syndicated loan deals of this size for years (representing the banks who loaned the Cubs the money). I pointed out long before it was reported that it was almost certainly structured that way. Then multiple reports have confirmed it – that is an awfully advanced subject for Chicago beat writers to just pull out of thin air

                    7. BT

                      @rebuilding. I was talking to aaronb. Hence the “passing conjecture” remark.

                  2. CubFan Paul

                    Cubs revenues being funneled into the trust to pay for the trust-loan is what has always been reported.

                    Nice of you to ignore that.

                    1. aaronb

                      Cubs revenues being going directly into the Ricketts family trust? What does that have to do with Sam Zell?

                      I agree that is what is happening….But why does that make Sam Zell a bad guy?

                      It should be an indictment on the Ricketts ownership.

                    2. hansman

                      I’ve never ignored it. I may have thought that amount didn’t impact payroll but I have never ignored that there were loans being paid back.

                      Now, could the trust have put restrictions on the Cubs business operations for that loan? Quite possible. The trust will do what is best for the trust.

              2. aaronc

                Is Aaronb really Terry Boers? Bc he sounds alot like him… lol

    3. wilbur

      It’s mostly bs regurgitated by a crappy columnist. any partnership contract has some such covenants in it designed to protect the minority partners. When the minority partners are the sellers on contract to the majority partners of the business, there are also covenants to provide assurance of payments for the sale. If the ricketts wanted out from under any of these supposedly restrictive contract covenants, they could go to the tribco current controlling owners, the banks holding the trib debt, and buy their way out from under them in about an hour. But there is no reason for the rickets to do this since these covenants aren’t currently restricting the ricketts or the cubs from doing anything that they have planned or are currently doing. They are a non factor and a non story. Majority partners usually run the business they way they see fit. And a buyer on contract can always get the terms changed to be more favorable if they are willing to pay or provide sufficient guarantees in another manner.

      1. Rebuilding

        The Trib isn’t the problem, the banks are. They have approximately a $500 million loan outstanding and so they have built in some financial covenants. From what we have heard and what I would suspect at the least there is a “Payroll as a Percentage of Revenue” covenant. That makes sense – until they are paid down some they don’t want the Cubs running a $150 million payroll jeapordizing their ability to get paid back fully. My guess is that the restriction loosens as the Cubs pay down principal. For instance it might be 33% when they owe $500 million and 36% when they owe less than $400 million and so on

  16. cards suck

    Ricketts is cheap only get other teams trash like the days when cubs owned by Wrigley himself tom wrigley ricketts.they sell gum also

    1. Blake

      Thank you for this insightful comment.

      1. college_of_coaches

        Not only insightful, but also well-written.

  17. CubChymyst

    The maximum bid is the best outcome. It allows more teams to get a shot and will cause Asian players to get salaries that are closer to market price. Both Darvish and Ryu make less than EJax.

    1. wvcubsfan

      I agree with this as well. It seems to be the most fair way to put the money in the players pockets while also giving the team that is losing control pf the player something more than the middle finger salute.

      1. Eternal Pessimist

        They could just have an open bid system with the Japanese team getting a percentage of the winning bid, a starting minimum bid and make the whole dollar amount count against the cap (as it should)…how hard is it for them to figure this thing out?

  18. Sacko

    Forget about the Yankee’s if we are going to operate according to their success or fail we are screwed from the start. Now that is stated that the posting comes from a different Ricketts account per say that money wouldn’t be used for a different player or players anyway.
    So now I’m for getting this guy. In addition I would hope they put a supporting cast around him which I think would influence Shark to sign an extension.

  19. Blackhawks1963

    The Ricketts have not been transparent when it comes to the level of payroll this team will have in 2014. They just haven’t. From everything I read the Cubs currently have around $75 M of true salary commitments on the books for 2014. I keep hearing and hearing how the payroll will wind up in the $100 M range. But is that really true?

    So lets assume for a moment the following.

    A. The Cubs are completely sold on Tanaka from a scouting and evaluation perspective
    B. The Cubs are prepared to submit a “max bid” on Tanaka

    So lets then assume the Cubs win the bid. That means we can assume a rough 2014 salary of $10-12 M for Tanaka, taking the overall 2014 payroll up to $85 M or so. That leaves $15 M of salry headroom IF we are to believe the Cubs will carry a $100 M payroll.

    On the other hand, lets assume the Cubs do not win the bid. That means the Cubs still have roughly $25 M of salary headroom for 2014. SO ON WHO IS THAT MONEY GOING TO BE SPENT ?!? First, the Cubs are NOT going to trade top prospects to acquire quality veterans that make a good salary. That would sabotage the farm system building strategy. Second, the free agent market is rapidly drying up of any good signing opportunities.

    ?!?! What am I missing here?

    1. hansman

      “The Ricketts have not been transparent when it comes to the level of payroll this team will have in 2014. They just haven’t.”

      So, do all teams tell the world how much they are going to spend? I guess I must have missed those press conferences.

      1. DarthHater

        If they would just join the 21st century and allow all spending decisions to made by internet voting, we would already be celebrating multiple championships.

      2. Blackhawks1963

        I’m growing weary of your trolling. If you want to be a personal hemorroid to everything I post, then go for it. You are on ignore.

        Indeed YES, most every major league club telegraphs strongly the level of payroll it intends to support for the upcoming season.

        1. wvcubsfan

          Where can I find these telegraphs?

          1. Jose's Eyelid

            There is a sense where most teams are in terms of dumping salary, spending money, or staying about the same. For example, this off-season the Mets and Mariners have “telegraphed” that they’ll spend. So have the Yankees. The Tigers are neutral.

            I’m sure fans that closely follow their teams have a sense as to what they will try to do. As a Cubs fan that reads this blog daily, as well as a few others, I have no idea if the Cubs are willing to spend some money this off-season, try to keep the payroll around 75-80 million, or dump. I would like to think they have some money to spend, but outside of the rumor we here about Tanaka (who may not even be available), the Cubs have been connected to no free agent this off-season.

            Now, I am not in favor of spending money willy-nilly on sub-standard players, but it seems to me the Cubs should be all over Choo on a five or six year deal. Why? Because his value should hold (he has “old player” skills), he is at least an average defender at a corner, and is a great lead-off guy. We have no lead-off guy on the roster or in the system. He is worth 16-18 million a year and a 2nd round pick, and would still be a core player when the younger prospects mature.

          2. Hookers or Cake

            The Colorado owner has been pretty transparent. We all know the Yanks plan to spend 189. The Dodgers won’t quit until everyone on the 25 man is making 25 mil.

            I do understand that if the Cubs are handcuffed by loan agreements that it may not be to their advantage to reveal how much they are. I’m sure it’ll all come out after the fact.

            Question. Would people rather the Cubs start the season at 85 million or so and use the surplus to payoff debt or renovations. Increasing the limit time table spending in 14-15? Or just sign a Granderson or Cruz on a 2-3yr?

            1. cubsfan08

              To answer your question – depends on who is available. I’d rather the money stay in house to start the season. Who knows, maybe an impact player can be had at the trade deadline for prospects and we need the extra cash.

              Even the way you wrote your last sentence (not saying you are for that move) you imply that you’re just kind of throwing that money away to sign them just for the hell of it

        2. Sacko

          I confer

        3. mjhurdle

          I love that you finish your post with a question, and then freak out when someone replies.

          1. Funn Dave

            To be fair, he wasn’t responding to the question; he was referring to a point earlier in the post.

            1. hansman

              The question was fairly open ended.

    2. Jose's Eyelid

      Blackhawks 1963 I’ve been wondering the same damn thing. What is the strategy for this off-season?

    3. cubsfan08

      I think the delay in figuring out posting is not helping the FO plan – whatever it is

      I think they are all in on Tanaka and we can debate both sides of that till we are blue in the face but until the process happens none of us will know. As Brett and others have stated numerous time – Tanaka is a situation this FO loves. A solid pitcher that costs nothing but money.

      Just because we have money to spend doesn’t mean we have to spend it. I am sure Jed/Theo have an acceptable price on every free agent out there. They won’t go over what they think they are worth. If the Yankees overspend on the guy, so be it. Work on another target. I don’t get the panic with everyone recently. I understand this team is not good right now, but just signing free agents for the hell of it doesn’t guarantee any success going forward. That sounds like the old way and that way didn’t work at all. And I was sick of the old way. A team full of 30+, underperforming, sulking millionaires that got swept in the playoffs sucked. I look forward to young and improving. The crappy part is having to wait…

      1. Rebuilding

        I think the delay is helping the Cubs position. I firmly believe that Tanaka is the only major free agent we intend to sign so timing is irrelevent to us. That’s not so for the Yankees or the Dodgers. The longer the better assuming he gets posted this year

        1. cubsfan08

          I actually agree with that – I guess I should have said the delay in Tanaka isn’t helping the FO with the “we are cheap” clan. If Tanaka is the only free agent they sign, I’m totally fine with that. However, I can see it now. Dodgers offer $300 million (exaggeration font) for Tanaka. We don’t offer 301. Now the FO is cheap and incompetent. I think they have a perceived value for him, and would be willing to raise it slightly due to the favorable situation – coming into his prime, doesn’t cost prospects, etc – but they aren’t going to be wasteful…and I’m ok with that

    4. Eric

      I agree that when compared to say, the Yankees, we don’t have a clear picture of what the payroll is going to look like. I’m not sure if that’s Ricketts playing things close to the vest, or if the team is just that un-projectable right now.

      All of that said, I haven’t seen any of the top FA in this particular class that I would spend 100 million on. It goes back to whether or not we should be making moves just to be making moves. I’d like to see us go hard after Brett Anderson not only for his (what I believe) under-valued skill set, but also to preserver the Shark-trade market.

      1. Voice of Reason

        Anderson gets hurt every year. He has been hurt every year except his first year in the bigs.

        If u know that then why would you trade for him?

        1. Norm

          Because maybe he won’t get hurt?

        2. Rebuilding

          He had a broken foot last year. If he would have had arm trouble again then I would agree with you. A broken foot is just a dumb injury that could happen to anyone and says nothing about his health going forward. By all reports his arm is sound now 2.5 years removed from Tommy John

          1. Voice of Reason

            Let’s just stay away from injury prone players.

            The kid is always hurt. Whether his arm, leg or tally whacker.

            If anderson is the bomb then why did the a’s go out and sign kazmir when they have Anderson at such a great price?

            Cone on….

          2. Voice of Reason

            Let’s just stay away from injury prone players.

            The kid is always hurt. Whether his arm, leg or tally whacker.

            If anderson is the bomb then why did the a’s go out and sign kazmir when they have Anderson at such a great price?

            Come on….

  20. Hee Seop Chode

    I think Blackhawks has a legitimate point here, but it should be more exciting than frustrating.

    1. CubFan Paul

      Payroll flexibility does get me all tingly on the inside.

  21. cubzfan

    So Wittenmeyer quotes sources on the “business side.” In other words, Crane Kenney is opening his big mouth again and commenting on player acquisitions, which is none of his business. Even if the posting fee doesn’t count against the debt covenants, Theo and staff have an amount in mind to acquire Tanaka and they have alternative plans in place. If the Cubs lose out on Tanaka, they will have “been in on it” like Jed said, but will claim they never put all their eggs in that basket. Kenney’s big mouth will make fans more angry than necessary.

    1. aaronb

      Cubs Tanaka contingency plan is………Scott Baker

    2. Jon

      Why does Clown Kenney even have a job with the Cubs?

    3. Rebuilding

      My guess is that the business guys are getting tired of being beaten down and thrown under the bus by Epstein. I think they are just making it clear to anyone who will listen that if the FO wants Tanaka the money is there. If we don’t get him it will be the FO’s decision – not a restriction from th business side

      1. Mike F

        Sorry Brett I think that is overly simplistic and an excuse being manufactured by the organization for what appears really cheap profiteering. First, yes I do agree there could be restrictive covenants. But unless the family is very mentally challenged, they would have had up to the task legal council. As part of that they would have I would hope fought and won for their client the right to restructure and prepay. Frankly given the cost of money since they bought the cubs and the inarguable equity appreciation it would be in their interest to renegotiate the loans and any such restrictive covenants that aren’t in their organizations best interest.

        It think this is one of those interesting yes and no things. Yes their are covenants and no they are nothing more than an excuse when work through the reasoning for not restructuring the debt the Cubs aren’t spending. They aren’t spending because it makes sense at the moment as Cub fans are not demanding winning. When winning becomes good business, as long as the markets both in terms of equity and in terms of interest rates aren’t prohibitive they will not take the easy way out.

        Sorry on this one, but if all of this is true, when Ricketts in 2010,2011,and even 2012 said they would compete, they could spend, they would spend and on and on he would be a huge liar. And frankly it ignores that the payroll was excessive then and they would be violating said covenants. It’s all an elaborate amount of gorilla dust.

        1. mjhurdle

          “When winning becomes good business, as long as the markets both in terms of equity and in terms of interest rates aren’t prohibitive they will not take the easy way out.”

          When exactly did winning become bad business? And if Cub fans aren’t demanding a winner, why is attendance consistently dropping?

          I think there are a few good points in your rant, but the overall point is way off base in my opinion. If all the Ricketts cared about was profit, then they would be spending and spending heavy, because a 83-79 team makes more revenue for ownership than a 62-100 team.

          1. Mike F

            Not exactly. And my point is simple. Covenants are an excuse as is the argument made media leaks about just about everything they have done and said in the last 18 mos. In fact, they have stopped all the contradictions with the silence in the last couple of weeks, in their case a good thing.

            Perfect example, Gordo’s hit piece, On the one hand is spoon fed about the covenants by Kenney who shouldn’t be there. On the other, they continue to feed Tanaka mania. Look I’ll be direct, I sure as hell would have preferred Ellsbury who fits a huge need, but they can’t afford Ellsburry and now the media are feeding the expectation they will be in on in a big way Tanaka. The Cubs will be in on Tanaka is just not going to happen, even if they want. LA and NY will blow them out of the water as they have on everything in the last couple of years.

            We need to admit to ourselves something is wrong, whether it s JG, the Yankees laughing at us over Soriano or DeJusus being traded to the Nationals for nothing and they turn a week or two later and flip him for a player. Our guys are missing a beat and something is wrong. The front office and business side are not on the same page and the Cubs are sitting tight and that includes everything but lip service on Tanaka.

            1. mjhurdle

              “The Cubs will be in on Tanaka is just not going to happen, even if they want”
              Sounds to me like you have made up your mind regarding the Front Office and their moves.
              I am all for your right to have whatever opinion you want, but it is hard to take anyone seriously when there is that obvious of a bias in place. I have no clue how hard the Cubs will go after Tanaka. They may land him, or they may not. But i won’t pretend that I know what they will do, and then complain/cheer them based on the made up scenario that i foretell happening.
              Whining about not signing Tanaka before anything has happened is as ridiculous as applauding the Front Office for signing Tanaka before anything has happened.
              I understand your frustration (i think every Cub fan feels that to some extent) but i just can’t get into the desperate need to complain about something, even if it means prophesying what will happen in the future just to have something to complain about.

          2. Whiteflag

            In certain markets winning can become bad business, Chicago just isn’t one of those markets.

  22. Blackhawks1963

    So if I understand this “new” posting system, then it means the 3 teams ahead of us in the loser standings….Houston, Florida, Chicago White Sox….all have a chance to submit a max bid on Tanaka and therefore have the chance to sign Tanaka ahead of the Cubs.

    Houston is FLUSH with cash according to all these new reports bashing them, and their owner has come out on the defensive saying that the Astros will definitely have a “healthy” payroll once their building strategy pays dividents (i.e., the same thing we hear from the Ricketts). But would the Astros go after Tanaka????

    Florida has always been rumored to have interest in Tanaka. Is that true?

    And the White Sox removed a ton of payroll when they shed Peavy, Floyd, Thornton, Crain, Rios…and Konerko just went from an $11 M salary down to a $1 M salary in 2014. They clearly need to make a splash or two beyond their big signing of Abreu to generate attendance, hope, etc. Especially since their farm system is in tatters.

    So there are 3 teams ahead of the Cubs who could all presumably submit a max bid and win Tanaka before we get a bite of the apple.

    1. Featherstone

      That proposal to have it based on record was just a suggestion and is very unlikely to be agreed upon.

  23. [Not] aaronb

    [Ed. - Impersonating other posters, and personal insults are both against the Terms of Service. Be a big boy and knock it off.]

  24. Rebuilding

    As I said last night – I will now be very surprised if we don’t land Tanaka. He’s what they want and they’ve created plenty of space for him. It’s the start of the Titanic slowly turning around

    1. DarthHater

      ” It’s the start of the Titanic slowly turning around”

      You mean we’re going to end up with a shipwreck on the ocean floor facing the opposite direction? ;-)

      1. Rebuilding

        Ha. Hopefully this Titanic turns faster

        1. DarthHater

          Ahh, okay. You were talking about turning around BEFORE hitting the iceberg. My bad. :-D

    2. Mike F

      You are going to be sorely disappointed. You and the media are reading too much into comments and hopes and wishes. They will not land Tanaka. They just won’t in any system and in any situation. They will not be able to bring themselves even if they have the resources that you simultaneously say they don’t but do, to do it. It isn’t happening.

      Best case they extend Jeff and I am not sure that is happening. There just aren’t any agents or even hints of the Cub Regime talking to fa even low dollar ones and I am starting to believe Boras was fed info by Theo that led to his diatribe.

      I think we have to brace for trades of some of the younger talent and frankly anything that moves. It will all be trades or nothing and then fill in with junk of the junk rubble. That is pretty obviously how it is shaping up.

      1. aaronb

        Agreed that they won’t land Tanaka.

        What we WILL see is the front office talking about how strong a bid they made. Once Tanaka starts negotiating elsewhere.

  25. Patrick W.

    I think the posting system should work like this: mid level max posting fee (say $40MM), all teams who post that get a shot at negotiating with player, signing team pays posting fee, and an additional fee of 20% of whatever the contract negotiated total value is, which counts towards the luxury tax.

    So if Tanaka gets posted and the Cubs sign him for 6/60 the NPB gets $52MM from the Cubs and the annual luxury tax cap hit is $12MM for the Cubs. The better the player the more money the NPB team gets, the lower the posting fee the more teams negotiating for with the player the more money the player gets. The lower the posting fee, the less total cost for the winning team.

  26. johnny chess Aka 2much2say

    Tanaka will cost 50 mil post plus 20 mil per year

    1. Rebuilding

      Probably. The max posting fee might be closer to $40mil from what I’m hearing

      1. Rebuilding

        I also think you will get a slight discount on the contract due to the “unknown”, comps to Darvish and the fact that you did have to post. Say like $18 mil a year over 6

  27. Ballgame

    First off thank you “Rebuilding” for helping me understand the loan constraints a little more. The way you’ve explained it makes somewhat sense to me.

    **Matt Kemp has 6yrs/130mil (21.66/season). Let’s say the Dodgers pick up $40mil, making Kemp 15mil/season, what would Cubs have to offer?? Kemp is expensive, but a solid “buy-low” candidate and he’s still 29yo. C’mon Cubs, this and Tanaka would be a HUGE step and provide room for some optimism!!

  28. Kyle

    I’m definitely more optimistic about Tanaka than I was 48 hours ago.

  29. 70'scub

    Cubs need to move in on Tank he has more value to the Cubs. As a line one for the Cubs compared to line 3 for LA and line 2/3 for the Yanks you think the Cubs would offer more. The Cubs should also revisit Garza 5 at 60 million front loaded with full no trade after two years. Cubs have Tank-Garza-Shark-Wood-Jackson without slowing down the rebuild. Plus sign up some lefty pieces and try and see how to get that lefty from Billy boy Beane. At the deadline revisit shark situation and/or after the winter meetings. T
    he kid from the O’s start based on spring result’s ect.

  30. terencemann

    It looks like NPB is leaning toward accepting a $20M max posting bid per Patrick Newman’s sources.

    Pardon my posting but:
    Go get him. Go get him right now.

    1. aaronb

      If that is indeed the case. Look for about 15 teams to submit that bid.

      1. Rebuilding

        Doesn’t really matter if 30 teams make the max bid on the posting fee. Assuming he can negotiate with everyone who does there are only 3 or 4 teams that will be able to go up to what he is asking. If the posting fee is “only” $20 million I would offer him 6/125. Also, if it is a lower posting fee that is likely to up the contract AAV which hurts the Yankees

        1. aaronb

          Why would it hurt the Yankees? When have they ever had an issue paying a player?

          It would hurt the Cubs in my opinion. Since they haven’t shown a willingness to pay retail for anybody. (Unless Tanaka has a blown elbow? Then we might make a real push).

          1. Rebuilding

            Because they have stated that they want to stay under $189 million in payroll. They are not too far from that number. If the posting few is lower the contract will likely be higher. Posing fees don’t count against the salary cap and contracts do. That’s the short version

            1. aaronb

              They have exceeded the tax before. I could see them doing it again if the right player came along.

              1. Rebuilding

                Maybe. They’ve explicitly stated on a number of occasions that they want to get under the cap. If they aren’t under by this year their fines increase drastically

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