NEWSLETTER
The world of Major League Baseball awaits a decision on the currently-non-existent posting system between MLB and Nippon Professional Baseball, which would provide for Japanese teams to sell their players’ rights to MLB teams. The two sides have been negotiating for weeks, and Jon Morosi says a deal isn’t close.
Among the proposals on the table, there is the possibility that posting bids – historically, the blind bid for the rights to negotiate with the Japanese player – will be capped. In such a system, there would be a pre-arranged maximum bid, and several teams could agree to meet that maximum bid. How the rights would then be sorted out is a matter of continued discussion. Tim Brown reports that, if that system takes hold, the winning teams (i.e., the teams that agreed to meet the maximum bid) would “vie in negotiations for [the] player.” I take that to mean that, if six teams won the post, then those six teams could make offers to the player, who would choose from among them (that would certainly have the effect of transferring way more of the dollars committed in this process to the player). Presumably, then, only the team that actually signs the player would be obligated to pay the posting fee to the Japanese team. Under a system like this, it is reasonable to assume that the Cubs would be one of the teams meeting the maximum bid (unless it was insanely high, but odds are that it would be fairly reasonable) for Masahiro Tanaka. From there, they’d have to out-negotiate the other involved teams – a tall order, given the financial depths of the Yankees, Dodgers, Red Sox, et al – but at least they’d have a seat at the table.
A separate maximum bid proposal (per a report out of Japan) would award the rights – in the event of multiple max bidders – to the team with the worst record in the previous season. Brown says this proposal isn’t going to fly, but you can see the obvious appeal there for the Cubs. They would get Tanaka if the Astros (money troubles tied to flailing network), Marlins (poor fit for a number of reasons), and White Sox (debatable) refused to meet the maximum bid. Heck, I wouldn’t be surprised to learn that the Cubs are aggressively pushing for that proposal (which, in terms of precedent-setting, would be about competitive balance, not rewarding the Cubs – for that reason, in the long term, maybe the Cubs actually wouldn’t want to support that proposal).
Hopefully a system is in place within a couple weeks, because it is possible that, if the process drags on too long, Tanaka’s team will decide there won’t be enough value in posting him this year (because a number of MLB teams will have moved on to other options).
As for the Cubs’ involvement in the Tanaka process, something Cubs GM Jed Hoyer has repeatedly confirmed will be a thing, Joel Sherman reports that the Cubs are viewed by other teams as a serious contender to land Tanaka. Although the Yankees and Dodgers remain the favorites to win the rights to Tanaka once a posting system is put in place, executives from two involved teams told Sherman to “keep an eye out for the Cubs.”
More importantly, Sherman includes this bit: “But there are officials who say the sale contains provisions that financially handcuff Ricketts that would not be a factor for a posted player.” If I’m reading that correctly – and, with all appropriate love to Sherman, it’s an ill-written sentence surrounded by context that makes its meaning a little unclear – Sherman is saying that he’s heard whatever financial limitations the Cubs currently operate under would not apply in this situation. Those financial limitations, in short, are believed to be loan covenants that restrict the Ricketts Family’s ability to spend more than a certain percentage of Cubs revenues on the Cubs in any given year, so it’s hard to see how a posting price wouldn’t have the precise opposite effect (i.e., having to outlay a huge amount of cash in a single year would violate those covenants unless the Cubs’ other spending dropped dramatically for the year).
But Sherman has clearly heard something, and I’m intrigued. I don’t really want to speculate (the obligatory precursor to speculation), but maybe the Ricketts Family (as Cubs owners) could borrow the posting price from the Ricketts Family Trust (at a reasonable interest rate), and then pay it back out of Cubs revenues over the life of the contract Tanaka actually signs? Seems like that would avoid any single year budgetary concerns, and would allow the Cubs to land Tanaka even if the Ricketts Family didn’t want to go out of pocket to get him. I’m just spit-ballin’.
Circling back …
If there is a maximum bid put in place for Tanaka – something in the $20 million (the low end of the proposal, according to Sherman) to $50 million range – I fully expect the Cubs to meet that maximum bid. A 25-year-old pitcher with the potential to be a top-of-the-rotation guy that you can get for only money? It’s a perfect fit for the Cubs, and, with a capped posting system, there should be no reason they can’t dig deep enough to be involved. If, however, the system remains a blind bid with no maximum (and if the posting price is still not applied against the luxury tax cap), I’m just not sure I see the Cubs mustering the resources to win, particularly with the Yankees and Dodgers involved.
In the end, even in this market, and even at his age, you’d not like to see the total commitment to Tanaka exceeding six years and $120 million. There’s a ton of risk involved, and, at that price point, not a ton of upside. If Tanaka will insist on a contract in the Yu Darvish range – approximately six years and $60 million – that puts a reasonable top posting bid at about $60 million. I tend to think Tanaka’s post will be higher, making the total final financial commitment a possible albatross. Remember: most scouts do not believe Tanaka is quite as good as Yu Darvish. Although Tanaka’s total commitment will probably be higher, thanks to market forces, there still must be a limit.
