Major League Baseball and Nippon Professional Baseball came to a new agreement this week on the posting fee for Japanese free agents. Previously, NPB teams would post players for free agency, and the highest bidding MLB team would have exclusive negotiating rights for that player. This led to a lot of high bids, with players like Yu Darvish and Daisuke Matsuzaka commanding $50 M just for teams to negotiate with the players. That money was only paid when teams ended up signing the player, which would cost around an additional $50 M for top players. The combined costs meant that small market teams had no chance at landing the top players out of Japan.
The new deal that was reached set a maximum bid of $20 M for players coming out of Japan. Furthermore, any team that bid $20 M had the opportunity to negotiate with the player. This new rule means that there’s no reason for any team to avoid making the maximum bid on a guy like Masahiro Tanaka. Only the team that signs him pays the $20 M, meaning there’s no risk in placing a bid. What this means is that every team can bid the maximum for Tanaka, essentially making him a free agent.
This new rule and the lowered price allows small market teams like the Pirates the opportunity to bid on top players like Tanaka. However, since Tanaka would basically be a free agent, and since free agency favors big market teams, the odds of a small market team landing a top player from Japan are still small.
When you consider the potential price of a player, you have to consider things from the team perspective. In the past, teams were spending $100 M for five years on guys like Darvish and Dice-K. Half of that went to the player, with the other half going to the NPB team. For the player, it meant he was accepting $10 M per year. For the team, it didn’t matter who was getting the money, since they were paying $20 M per year for the player in the end.
The lowered posting fees just means that more money can now go to the player. Instead of a guy like Tanaka getting $50 M for five years, he can now get $80 M for five years. The players from Japan will get more, teams will be spending the same amount overall, and the NPB teams will be getting less. Very few teams can afford to pay $20 M per year on any player, much less a player who has zero major league experience.
Teams like the Pirates now have a chance to bid on a guy like Tanaka. However, their chances of landing him are pretty much the same as their chances of landing any other free agent who will command $20 M or more per year.