Commentary on the economic , geopolitical and simply fascinating things going on. Served occasionally with a side of snark.
Saturday, December 28, 2013
Have pitching phenom Masashiro Tanaka and the Rakuten Golden Eagles crafted a clever secret scheme to circumvent the Posting System Agreement limits ? MLB seems to think so - MLB will prevent Masahiro Tanaka from donating to the Rakuten Golden Eagles ...... More on MLB's version of pitching " Hunger Games " as clubs race to toss 17 million a year or perhaps more at a MLB untested but uber legendary japanese pitching ace !
Under the new posting system, the Japanese team will receive a maximum of $20 million for their player, and MLB is intent on making sure it's absolutely no more than that. According to the LA Times, they plan to investigate whether a deal has been made between Masahiro Tanaka and the Rakuten Golden Eagles that would award the team more money than they agreed to receive under the new contract.
During the press conference to announce they would post Tanaka and allow him to come to America, Golden Eagles president Yozo Tachibana claimed the new agreement was unfair and that Tanaka had expressed the desire to make a donation to the team, which would go toward a new dome for their stadium. While the Japanese superstar did not attend the press conference, Tachibana claimed that he wanted to "repay the team that developed me" and "cooperate and donate . . . starting with improving the environment for the players and to make sure it's the kind of stadium that can be loved by [local] fans."
The new system between MLB and NPB does not just allow the Japanese team to make money off their players, but it also prohibits them from making any more than allowed, in any form, whether it be back room payments or some kind of donation. As Ken Rosenthal reports, the new deal between the two leagues allows the commissioner of MLB to void any transactions that infringe on the new rules. If Tanaka were to donate money to Rakuten, MLB would be allowed to review such an action.
They will also be able to police MLB teams from making any kind of agreements under the table to gain an unfair advantage in negotiations. Whether it be a deal that would pay the Japanese team double the release fee to gain favor or the promise of bidding high on another player at a later date, MLB plans to crack down on anything that could infringe upon the agreement. They will also take the idea of illegal kickbacks very seriously, though one source Rosenthal talked to believes such a deal would be "'very inefficient' - Tanaka would be taxed on his major league income in Japan, and Rakuten would be taxed for any revenue he contributed to the club."
I completely understand the idea of preventing MLB teams from making illegal deals behind everyone's back, but does it really matter if Tanaka wants to give away some of his own money? No one gets any unfair advantage from this as a deal has already been made. It seems like it's none of MLB's business where Tanaka ultimately spends his money. If he indeed plans to help with stadium renovations, and MLB says that he can't, it would really prove that NPB has simply become a feeder league to America.
Although the Masahiro Tanaka sweepstakes began yesterday, The Yankees wasted no time being aggressive in their quest to land the famed starting pitcher.
According to the New York Daily News, the Yankees contacted Tanaka’s agent Casey Close, who is also the manager of Yankees shortstop Derek Jeter. Although the Yankees spoke to Close, the Yankees did not make an offer. Their offer is not supposed to come until next week at the earliest.
With Tanaka being the biggest prize in the offseason, you have to expect that he’s not going to come cheap. According to a report from ESPN, Close is looking for a a minimum of a 5 years, $100 Milion contract for Tanaka.
The Yankees have some competition for Tanaka, ranging from the Red Sox, the Dodgers, the Cubs and even the Mariners, who are fresh off of signing ex-Yankee Robinson Cano.
Whichever team signs Tanaka would have to pay the Rakuten Golden Eagles $20 Million for the posting fee. The bigger question (aside form who will sign Tanaka) is how will Tanaka adjust to pitching in the Majors? Will he find success like Yu Darvish and Hiroki Kuroda, or will he end up being a slight disappointment like Daiskue Matsuzaka? Regardless, that thought is not going to stop teams from partaking in the Tanaka sweepstakes–right now, all anyone can think about is how to get Masahiro Tanaka on their ..read more
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Because one of the collateral effects of the new posting rules between MLB and the Nippon Baseball League -- aside from the fact that the relatively "affordable" $20 million posting fee is attracting a lot more players into the sweepstakes for Japan's best starting pitcher -- is that it is practically guaranteed it will drive up the price for the three blue-chip starters still out there in the free-agent market.
At this point, there's no way Garza, Jimenez or Santana are going to sign with anyone before they see how much Tanaka goes for. And since it is widely assumed Tanaka and his agent, Casey Close, are seeking, at minimum, a five-year, $100 million contract, this will serve as a belated Christmas present for the other three, whose agents will base their asking prices on Tanaka's final numbers.
According to a baseball source, a bunch of teams, including the Yankees, have made their initial inquiries to Close, but all expect nothing substantial to happen until sometime after New Year's Day. According to the source, as many as 10 teams could be in on the bidding for Tanaka, attracted by the bargain-basement posting fee. Aside from the Yankees, the teams expected to at least kick the tires on Tanaka are the Red Sox and the Blue Jays from the AL East, both Los Angeles teams, the Texas Rangers, Arizona Diamondbacks, Houston Astros and yes, the Yankees nemesis in the Robbie Cano negotiations, the Seattle Mariners.
Obviously, not all of them will be serious bidders but there promises to be enough of them to insure that Tanaka, who went 24-0 with a 1.27 ERA for the Japanese champion Rakuten Golden Eagles last season, comes away with probably the most lucrative contract ever given to a Japanese pitcher.
That may be bad for the Yankees, and any other team that plans to make a serious run at Tanaka, but it is of course very good for him -- and good for the three American pitchers who remain on the board, rooting for Tanaka to break the bank.
Let’s assume the Yankees have removed their financial shackles. That $189 million thresholds are now like the idea of building around Kevin Maas – a concept that came and went as it looked worse and worse to the organization’s leadership.
There was a time in the not distant past that this would mean start sizing Masahiro Tanaka for pinstripes. Because what the Yankees wanted, no one else could stop them from purchasing. But even the financially committed Yanks are going to find significant obstacles now.
Tanaka’s agent, Casey Close, does not have Scott Boras’ public reputation for bargaining hard and toward the top of the market, but he does have it within the sport. Also, the Yanks are no longer the only team willing to stretch and stretch financially to get what they want.
Since only the team that ultimately signs Tanaka will have to pay his Japanese club, Rakuten, the $20 million posting fee, the expectation is many, if not most, MLB teams will inquire. Heck, you can make the case that teams such as the Orioles and Royals, who need a high-end starter and are at vital crossroads in their respective histories, should go all in or that the Astros – loaded with dough and beginning to take steps toward accelerating the timeline for contention – should jump in seriously. The Giants or maybe another club could also surprise, but right now these eight organizations are viewed as the main competition to the Yankees:
If their wallet really is bottomless, then the Dodgers are as likely to sign Tanaka as any club. But there are executives in the game who think L.A. is looking at the bottom line a little more.
The Dodgers already have four players making $21 million or more for at least the next four seasons – Carl Crawford, Adrian Gonzalez, Zack Greinke and Matt Kemp – and Andre Ethier averages just a tad under $19 million from 2015-17. Right now, according to the figures at Cot’s Contracts, L.A. has a major league-high $136.4 million already committed for 2015. And that does not include Clayton Kershaw and Hanley Ramirez, who are both free agents after this season.
Kershaw almost certainly will become the first $200 million pitcher and may even jump all the way to $300 million. Ramirez probably makes no less than $18 million a year and possibly more. The Dodgers want to keep both. So if they are unable to unload an outfielder such as Kemp or Ethier, the Dodgers very well could have six players making $18 million or more.
Tanaka is going to be in that realm, as well. In their bold signings of Yasiel Puig, Hyun-Jin Ryu and Alexander Guerrero, the Dodgers showed how aggressive they will be on the international market. In addition, Close already has done a large pitching deal (Greinke) with this front office and represents Kershaw as well.
Here is some intrigue: The Dodgers tried to engage Kershaw in long-term talks before last season that apparently would have made him the highest-paid pitcher ever without having to risk pitching the two remaining seasons until free agency. Kershaw, instead, gambled on himself. If the Dodgers think Kershaw might ultimately test the market and flee, would they hedge by signing Tanaka and know they have him, Greinke and Ryu going forward to build around?
Another SoCal team about which we ask: How far will it go financially? The past two offseasons the Angels made huge splashes with Albert Pujols and Josh Hamilton. Neither has worked out well. That apparently has made owner Artie Moreno gun shy.
However, the Angels now have not made the playoffs four straight years, their attendance has ticked downward and they are losing the Battle of L.A. to the Dodgers. And their need for high-end starting pitching has not changed even after obtaining Tyler Skaggs and Hector Santiago, who are more back-end support.
3. Red Sox
They have remained disciplined this offseason. The cornerstone of their championship was trading out of the big contracts of Crawford and Gonzalez and spreading their money around on a lot of good players but none with big long-term expense. They have brought Mike Napoli back on a two-year deal and seem willing to do the same for Stephen Drew while letting Jacoby Ellsbury and Jarrod Saltalamacchia flee.
Boston has just $62.6 million committed to the 2015 team, but Jon Lester is a free agent after 2014. Are the Red Sox prepared to pay him, Tanaka or both with the kind of long-term deals they have been trying to steer away from?
There are many Yankee-esque qualities here – notably the presence of an older/declining core and worry about holding the attention of a Northeast fan base that has come to expect stars and winning. There are many failings around the diamond, but a rotation headed by Cliff Lee, Cole Hamels and Tanaka would make up for a lot of sins while possibly re-energizing that fan base.
Word is they love Tanaka. They certainly have had success reaching into this marketplace previously with Yu Darvish. But the Rangers already have made two seven-year investments this offseason – trading for Prince Fielder and signing Shin-Soo Choo. After each, I heard executives around the sport say Texas GM Jon Daniels hates these kind of long-term deals and wouldn’t do another.
But, of course, after Fielder, there was Choo. And Texas is motivated for many reasons. The Rangers’ last four seasons produced a World Series loss (2010), a World Series loss in the most agonizing of ways (2011), a final-weeks collapse to fall to the wild card (2012), a playoff miss (2013). The Rangers need to hold a football-crazed area’s attention. They are motivated to prove they can win after the departure of Nolan Ryan and what was a battle for front office control. They have uber-rich owners and a lucrative TV deal, so the money is there if they want to win a bidding war.
Few teams are as blessed with positional prospects like the Cubs. But they are in need of pitching. Their front office has held off on big-ticket items, feeling the window to begin serious contention probably begins in 2016, and the Cubs have not wanted to spend dollars and watch players age while waiting for that time. But because Tanaka is 25, this could be different. The industry certainly expects them to be significant bidders.
Industry believe is they are enamored with Tanaka. They have used a chunk of their prospect base to get Mark Trumbo and Addison Reed. Thus, they might be more leery of using more to get, say, David Price. They have made it clear, in fact, that they will not trade their best prospect, Archie Bradley. So will they make the financial commitment to buy Tanaka and team him with Bradley and Patrick Corbin to front their rotation moving forward?
There are mixed messages about how far Seattle is willing to go after giving Robinson Cano $240 million. Still, even with Cano, this is probably not a playoff team, in part because it needs another high-end starter and has shown an unwillingness to cede Taijuan Walker to land Price. The Mariners have a huge Japanese following and enjoyed great success with Ichiro Suzuki.
I won’t repeat the analysis from a few weeks ago on why posting dollars are “cheaper” to teams near or over the luxury tax threshold, so head back to that last post if you don’t believe me. One conclusion I reached in that post, however, was that even though the new cap for the posting fee limits the effect of posting dollars being “cheaper” for some teams, it doesn’t eliminate that discrepancy as a factor entirely.
The D-backs organization has decided that it has a need for Tanaka or someone like him, but that does not mean that another team’s need for him is not more pronounced. Add to that the existence of some teams who have quite a bit more money to spend than Arizona, and some teams more greatly affected by the luxury tax issues — and I’d put Arizona’s chances of landing him at about 3%.
Chicago Cubs – 55%
Name the last time that a player who looked like he was likely to be well above average hit free agency at the age of 25. Give up? I don’t blame you — I couldn’t find one either. Having just turned 25 on November 1st, Tanaka will pitch all of next season at that age. Even Bryce Harper, who got a GED in high school to enroll at JuCo and enter the draft early, will play under his first free agency contract no younger than 26.
We’ve never seen a player with proven skills hit the market like this, not in the modern era. It’s entirely possible that we’ll be floored by the contract Tanaka eventually receives. If the Daisuke Matsuzaka and Yu Darvish contracts are any guide, it’s not likely that the Tanaka contract will be for less than 6 years — and given his age, we might find teams comfortable going longer than that. A 7-year contract would be completed by a 31-year-old Tanaka, after all. Ervin Santana will pitch the first season of his new contract at age 31, and both Ubaldo Jimenez and Matt Garza will be 30 next season. The theory goes with that trio of pitchers that one might have to pay for several seasons to get some of their “prime” seasons over the next 2-3 years — to get all “prime” seasons from Tanaka, one might do well to sign him to an 8-year contract.
Consider the situation of the Chicago Cubs. After three seasons with payrolls above $134M in 2009-2011, the Cubs committed to a rebuilding cycle, settling back down under $110M for the last two seasons. They have money to spend, but no reason to spend it on the 2014 version of the team. 2015 may spell the beginning of their turnaround, but it’s only 2016 and beyond that their good young players may be contributing to the major league club in a meaningful way. Now consider that of those good young players, almost all are position player prospects.
Add to that Theo Epstein’s comment from early November: “We wish there was a free agent market for young players.”
It could be that no matter what, Tanaka will have a bit of a transition period to deal with, as did Yu Darvish. It could be, then, that when he hits his stride in 2015, he’s doing so with the Chicago Cubs.
New York Yankees – 25%
Perhaps Tanaka is a better fit for the Cubs than for any other team — but the Yankees’ need for Tanaka might be the greatest in the land. New York’s rotation issues are profound. Beyond a declining CC Sabathia and Hiroki Kuroda, who agreed to give the Yankees one more year, they have the somewhat underrated Ivan Nova, slot filler David Phelps, and maybe Michael Pineda, who was great before shoulder surgery, but who is returning from… shoulder surgery. In the minors, most possibilities are either recovering from injury or recently returned from one.
Also — they’re the Yankees. Yes, they’ve been flirting with the recently-raised luxury tax threshold, but unless the luxury tax threshold is completely turning them off from spending money in general, Tanaka might still fit them. Assuming that the total price for Tanaka will be as much as teams can fathom paying him (and that total years won’t be a big factor), the posting fee is part of Tanaka’s price — and so Tanaka’s salary may be a bit lower than it might have been if he were a true free agent. In that event, we’re back to the effect of posting dollars. And as I wrote a few weeks ago:
Compare the position of the Yankees, then, to the position of the Diamondbacks. Both teams walk into a local store that sells batting practice balls. Neither team really needsnew batting practice balls, and there are other stores that sell them. Some of the balls are available for $10 per ball, to any buyer (these are the balls analogous to Tanaka’s salary). To get all of the balls, though, you have to buy a set of additional balls (the balls analogous to the posting fee), and the price changes — they cost $7 for the Yankees but $10 for the Diamondbacks. The store decides all of the balls have to be sold to one party. Since the balls are cheaper, overall, for the Yankees, it’s more likely that the Yankees will view the overall sale price as a good deal. Now consider that the Yankees have a lot more money — dollars are not as precious to them. Since they have more money, they might have paid even more for the balls than the Diamondbacks are willing to pay — but they only have to pay less.
If I were a betting man, I’d bet on the Cubs landing Tanaka. But if the Cubs were not in the running, I’d take the Yankees over the field.
Seattle Mariners – 5%
After the Cubs and Yankees, I think other teams’ chances of landing Tanaka are so low that Seattle’s “wild card” factor makes them the next-most-likely team. Maybe the Seattle organization disagrees with the perspective of outsiders that the Robinson Cano signing still has them falling short of the playoffs by a fair margin — but maybe they do agree, and maybe, if they agree, they’re willing to bid as wildly as they did in the Cano sweepstakes. Seattle has never been burned by an investment in a Japanese player before, unless you count Kenji Johjima (I don’t). There’s value in laying claim to a new cross-section of baseball fans in Japan, too.
Los Angeles Dodgers – 3%
We know they have the money, and we know that the Dodgers are as likely to derive benefit from the non-luxury-taxable $20M posting fee as any other team. With Zach Lee in the wings, though, they aren’t exactly banking on a full recovery from Josh Beckett, and the recently-signed Dan Haren will have some rope to work with. There isn’t much “need” here, and the Dodgers learned just a year ago that hoarding starting pitching doesn’t necessarily make it easy to trade the excess for other helpful pieces.
Los Angeles Angels of Anaheim – 3%
Even after adding two starters in Hector Santiago and Tyler Skaggs, the Angels still have a boatload invested in their club on the position player side, and not enough strong pitching to carry the load. If they sign Mike Trout long term, then their situation will not change much for quite some time. If they do not, however, that gives them a four (Trout departure) or three (Weaver departure) year window to win. With Jared Weaver, C.J. Wilson, Garrett Richards, Santiago and Skaggs all under control for at least three more seasons, the Angels might have enough — but with no minor league pitching to speak of, the Angels could be inclined to avoid rolling those dice (after all, if Skaggs were a sure thing, he’d never be gettable has half the price for Mark Trumbo).
Arizona Diamondbacks – 3%
I think the D-backs’ pursuit of Tanaka is a little unrealistic — but the club’s pursuit of Trumbo was unrealistic, too, in similar ways. Towers and maybe ownership are clearly zeroed in on 2014, and clearly zeroed in on Tanaka as the best of the pitcher options available. I cannot and will not count them out of this race, and because of Tanaka’s age, an investment in Tanaka would likely be embraced from all corners of D-backs Nation.
The Field – 6%
Some team could always come out of nowhere. It could be the Red Sox — they placed a high premium on building a fan base in Japan when the same ownership group bid for Matsuzaka. My guess is the number of teams to submit $20M posting bids could be anywhere between 5 and 15. And this is still essentially free agency. Tanaka has until January 24th to make a decision, and he could pick the best offer, or he could pick the best short offer, or best long offer, or just the team he liked visiting with the most. Again, I do think that the Cubs and Yankees should be greatly favored to sign Tanaka — but anything could happen over the next 29 days, and the D-backs will be among the other teams to have other offseason plans frozen until Tanaka chooses his own destiny.