With posting system in flux, a simple solution
Three dynamics at work while negotiating new agreement with Japan
Officials from Nippon Professional Baseball and Major League Baseball will meet on Tuesday to discuss the state of the posting system that is used to bring Japanese players who are not free agents to Major League baseball.
The current system is broken, at least in the minds of Japanese players and MLB teams. For the third party involved, the NPB owners, the system is just fine and they are not very motivated to negotiate change. Posting fees, which are paid by MLB teams that win "blind bids" to secure negotiating rights with players, have at times topped $50 million for players like Yu Darvish and Daisuke Matsuzaka. That money goes directly to the Japanese player's team once he agrees to a contract with the MLB club that won his rights.
There are three dynamics at work with negotiating a new agreement that have to be considered.
First, the NPB players union vs. NPB. The NPB players union is in its infancy stages when compared to the Major League Baseball Players Association and has little power in negotiating with the league. Their concerns are a player's ability to choose where he plays when he enters the posting system. As of now, a Japanese player is only allowed to negotiate with the team that won his posting bid. If a deal cannot be reached, he must return to Japan for the following season and go through the posting system again if has not reached international free agency at the end of that season (nine years in Japan).
Secondly, the NPB vs. MLB. MLB would like to see the posting fees come down. NPB owners are just fine with the current system and see no reason to cut MLB a break for acquiring their league's best players. There will be some posturing, but at the end of the day, those posting fees are big money to Japanese teams where the highest salaries fall in the $5 million to $7 million range for top players. Expect NPB to at least offer some wiggle room with this.
Finally, MLB vs. MLB. At the General Managers Meetings in Orlando, Fla., last week, the topic of the posting system came up. It was reported that small-market teams were frustrated that posting fees are not counted against the luxury tax, which is true, and therefore creating a competitive imbalance between big- and small-market clubs. The call to count these fees against a team's luxury tax was met with some resistance, as bigger-market clubs don't want to see the system changed, especially as a highly-coveted pitcher like Masahiro Tanaka, expected to be posted this offseason, looms.
A solution to satisfy three separate parties in negotiations is never easy, but in the case of the Japanese posting system, it might be simpler than we think.
• Allow the top three blind bids to be accepted by NPB and allow those three teams to negotiate with the player for the same 30-day window they currently allow under the system. This should satisfy the NPB players' concerns. While it is not complete free agency, it offers an option. Perhaps a player prefers a certain market over top dollar. This solution should help quell some of the concerns that a player is committed to a "one team, take-it-or-leave-it situation."
• Take the average of the top two bids and consider that the posting fee that is to be paid to the Japanese team that the player was with in NPB once he signs with an MLB team. This fee would be higher than the third team bid, and they should be offered the opportunity to be involved with the negotiations only if they agree to pay the higher fee. If not, they are out and only the top two teams negotiate with the player. This is a small concession for Japanese teams. Yes, they lose some money, but the offer is fair and they will still do very well.
• Set an escalating percentage year to year for posting fees to count against the luxury tax. Perhaps 30 percent in 2014, 40 percent in '15, 50 percent in '16 and cap it somewhere around 50-60 percent from there going forward. This is negotiable, and while not a perfect solution, it is a start. Small-market teams likely want this to be 100 percent, and that is understandable. But it is late in the game to open this kind of a negotiation and a small percentage for '14 is fair, and working their way toward a larger percentage over the next three-four years is reasonable.
There had been talk about implementing a penalty fee for MLB teams that win a posting bid but do not sign the player. In those instances, like we saw with the Oakland A's and Hisashi Iwakuma in 2011, no money is exchanged and the player is sent back to Japan to play another season. A penalty is a bad idea in my opinion. Even it were to be, say, $3 million, don't you think the Boston Red Sox would be willing to pay $3 million to keep a pitcher like Tanaka away from the Yankees? It sounds unscrupulous and maybe a little far-fetched, but I think it is possible and something I'd prefer to see not be a part of the new agreement.
There would need to be a few more minor details worked out, but this solution is one that satisfies all parties and one that could be agreed upon rather quickly. The biggest hold up has been, and likely will continue to be, Japanese ownership. They hold the rights to the product. Their willingness to come off the current system may not sit well with them as a group. If they aren't willing to budge, it could do some short-term damage to the NPB-MLB relationship. And more importantly to fans, it could delay the arrival of Tanaka.