MLB and NPB Reportedly on the Verge of a "Maximum Bid" Posting System - And the Max is Just $20 Million

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MLB and NPB Reportedly on the Verge of a “Maximum Bid” Posting System – And the Max is Just $20 Million

Chicago Cubs

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.

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.