The Chicago Cubs' Shohei Otani Problem

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The Chicago Cubs’ Shohei Otani Problem

Chicago Cubs

This weekend, an 18-year-old pitcher from Japan named Shohei Otani announced that he would be foregoing an opportunity to be drafted in the NPB (Japan’s professional baseball league), and instead would be coming straight to the United States. The announcement was unprecedented – there has never before been a candidate to be a top pick in the NPB draft who decided to forego that opportunity in favor of MLB.

Given Otani’s skills and stature – he stands 6’4″ and throws 99-100 m.p.h. – you can understand both his interest in seeking an earlier payday in the U.S., and MLB teams’ interest in landing the young righty.

Sounds like a perfect target for the Cubs, yes? After all, they are pitching starved and have money to burn at the amateur level.

If only it were that simple.

Because Otani has not played in Japan, he is considered a true international amateur free agent, which means his signing would be subject to the new rules regarding international signings. Recall, for the 2012-2013 signing period (begins in early July and ends in mid-June)

Per the new CBA, the penalties for busting your international signing pool are at once similar to, and starkly different from, the penalties for busting your amateur draft pool. The gist, from Baseball America:

Every team has a $2.9 million signing bonus pool for the 2012-13 signing period. Any team that spends more than $2.9 million will be subject to a variety of penalties:

• Teams that go 0-5 percent over will pay a 75 percent tax on the overage.

• Teams that go 5-10 percent over will pay the 75 percent tax on the overage and won’t be able to sign more than one player for a bonus of more than $500,000 in the 2013-14 signing period.

• Teams that go 10-15 percent over will pay a 100 percent tax on the overage and won’t be able to sign any player for a bonus of more than $500,000 in the 2013-14 signing period.

• Teams that go 15 percent or more over will pay a 100 percent tax on the overage and won’t be able to sign any player for a bonus of more than $250,000 in the 2013-14 signing period.

In sum, busting your pool doesn’t prohibit you from signing international players in the future – it just restricts the price tag of, and thus caliber of, the players you can sign. That said, it’s reasonable to believe that, if a team is going to go balls out to sign Otani, they’re going to blow past their $2.9 million cap by far more than 15%. For a number of teams, it would be worth the penalty. The Cubs are already near their $2.9 million cap for the year. Would they risk the penalty? I doubt it.

The best players in a given international class – the ones to whom you’d compare first round draft picks – all sign for well over $250K, even in the newly-restricted environment. In other words, if a team blows its pool in 2012-2013 (this year), it will not be able to sign any of the top players in 2013-2014 (next year) – and that’s true regardless of how much the team in question has available in its pool. The Cubs will have something just shy of $4.8 million to spend in 2013-2014 (we don’t know the precise amount yet, but they’ll have the second highest amount, and the highest amount is $4.8 million), so blowing their cap this year could cause a huge problem next year – it isn’t easy to find 15 to 20 quality prospects worth around $250K apiece, but no more, and 46 $100K prospects (if you could even land that many and had four extra minor league teams (and coaching staffs) on which to play and develop them) is not necessarily better than a few $1.5 million prospects. You’re getting the idea.

While the average international class in a given year is not comparable in talent to the average U.S. draft class, the two aren’t that far off. Would you really want the Cubs to have to sit out the first couple rounds of a hypothetical draft (one in which they had, like, six selections in the first two rounds) so that they could get Otani, alone?

I don’t think I would.

It’s an unfortunate byproduct of the new CBA, which, on the one hand favors the Cubs next year, with a large spending pool, but disfavors them with that same pool – the Cubs have more to lose than most teams by busting through their cap this year. A team that will receive just $1.7 million next year (the lowest amount, around which the best teams this year will receive) can far more easily risk busting their cap this year, because, other than the tax, it might have no tangible impact on what they would have done in the 2013-2014 signing period anyway.

Fiddle sticks.

So, at this point, I don’t see much of a way around this: we have to hope that Otani waits until July to sign. At that point, the Cubs would be in the second best position to sign him, and could possibly even be in a better position to bust their pool, if need be (of course, if the Cubs suck in 2013, they’ll again have a big pool in 2014, and the problem would start anew … ). If he signs before July – which, let’s be honest, is a strong probability – it’s likely to be with a large-market team like the Dodgers or Rangers. They have as much money to spend now, and have much, much less to lose next year. Even if no team is willing to blow its budget to sign Otani, the Cubs have almost no pool money left to spend this year.

In other words, for Otani and the Cubs, it’s probably next July or bust.

UPDATE: BA’s Jim Callis just did a Q&A addressing this very issue, and basically said the same things – Otani is likely to sign before July, and teams will probably be willing to bust their international pool for him.

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Author: Brett Taylor

Brett Taylor is the Editor and Lead Cubs Writer at Bleacher Nation, and you can find him on Twitter at @BleacherNation and @Brett_A_Taylor.