Baseball’s club owners spent years trying to beat the players into submission and stuff free agents back into the bottle. They failed miserably in each and every attempt, batting a dismal .000, and when they finally conceded they saw that the game was good, better, in fact, than it had ever been, making more money for them and spreading the on-field wealth more widely than ever as well.
The owners, to be sure, do bizarre things, even when it’s against their own best interests, and it might be to Bud Selig’s credit that he has kept them under control since he came to the realization that labor peace is more beneficial to baseball than labor war.
But that development hasn’t stopped owners from making decisions that have other people scratching their heads and asking why.
The latest such example is the new posting system by which non-free agent Japanese players can move to the American major leagues. The new system does exactly what major league owners don’t like to see happen with their players. It makes the Japanese players real live free agents.
Instead of negotiating with only one team, the one that submits the highest bid for him, which was the old system, a posted player can negotiate with all of the teams that say they will pay the posting fee (maximum $20 million) set by his Japanese club.
Obviously, the more teams that are interested in a player, the higher the offers he will get. That’s how the free agent system has always worked, and you would think with their experience with it the owners wouldn’t want to create another level of free agency.
It seems, however, that they are willing to act counter to their best interests because of their obsession with the New York Yankees and maybe the Yankees’ alter ego, the Boston Red Sox, and the nouveau riche Los Angeles Dodgers. Better to make a posted Japanese player ultra wealthy than simply wealthy and give other teams a chance to join the posting party by placing a relatively low maximum on the posting price.
That is not to suggest that a low-revenue club, such as Tampa Bay, will outbid the Yankees even if it is willing to pay the posting fee. The Rays may feel comfortable paying a $20 million posting fee, particularly since it can be paid in installments, but the Yankees could bury the Rays with its offer to the player.
“It gives teams more parity in the bidding process, but it’s artificial parity,” a club executive said. “It gives the small market clubs a feeling they can get the player, but they can’t really get him.”
The big-market teams are restricted on the front end, being restricted to a $20 million posting fee, the executive added, “but this helps them on the back end.”
The new system, the executive said, helps the Japanese players because they can negotiate with more than one team. “The ones hurt are the Japanese teams.”
Most immediately hurt are the Rakuten Golden Eagles, winners of this year’s Japan Series, who were in position to reap a small fortune. They had been expected to post the nation’s best pitcher, Masahiro Tanaka, but now are reluctant to take that step. They haven’t explained their change in thinking, but it just might have something to do with the drastic change in the posting fee they can expect.
Tanaka is a 25-year-old right-hander, who this year had 24 decisions and won them all – that’s a 24-0 record – and a 1.27 ear.ned run average. It makes you think about signing the hitters who drove in those 1.27 earned runs.
At some point earlier this year it seemed that the Eagles would post Tanaka. The Yankees, for one, were preparing a check with a lot of big numbers and zeroes and Hal Steinbrenner’s signature.
But Major League Baseball’s posting agreement with Nippon Professional Baseball was expiring so they had to negotiate a new agreement, and the new one severely affects the amount of money the Eagles can receive if they post Tanaka.
In 2012 the Texas Rangers won negotiating rights to Yu Darvish with a $51.7 million bid. In 2007 the Red Sox bid $51.1 million for negotiating rights to Daisuke Matsuzaka. Other winning bids included the Yankees’ $26 million for Kei Igawa in 2007 (a disaster), Seattle’s $13.1 million for Ichiro Suzuki in 2001 (a bargain) and the Dodgers $11.3 million for Kaz Ishii in 2002.
To show how a greatly reduced posting fee could greatly enhance the player’s contract, the Rangers signed Darvish to a $56 million contract after bidding $51.7 million for him and the Red Sox gave Matsuzaka $52 million after giving his Japanese team $51.1 million. If the maximum posting fee had been $20 million, each team would have had an additional $30 million, if needed, to offer the players.
Tanaka is not a sure thing. His team may not post him.
After meeting with the Rakuten owner last week Tanaka told a news conference in Japan, “I informed my team that I would like them to allow me to test my abilities in Major League Baseball next season.” However, Rakuten President Yozo Tachibana said, “We told him he is very important to us and we’d like him to stay.”
Rakuten, which understandably voted against the new posting agreement, might feel differently if it could post Tanaka under the old rules. Tanaka would very likely have brought a bid far higher than Darvish or Matsuzaka. With $20 million the most they can get, they will probably keep him and try to win another Japan Series title.
If the Eagles don’t post Tanaka this year, they could post him after next season or keep him through 2015, after which he could leave as a free agent. Barring a bad arm, Tanaka figures to be a highly sought after pitcher whenever he is free to take his valuable right arm to the majors.
Because the new posting agreement runs for only three years, one more year than Tanaka’s contract, the Eagles couldn’t be blamed for thinking the new rules are aimed squarely at them. However, the small-market major league teams seem to have their own reasons for pushing for them.
“The richest club may still get the player,” Rob Manfred, the majors’ chief operating officer, said, “but the small clubs can live with that because the club that gets him will have to pay tax. The posting fee was not taxable. Now the salary will be bigger and subject to tax.”
Only, however, if Tanaka’s new major league contract helps put his new team’s payroll over the luxury tax threshold. That view seems to bolster the Yankees’ suspicion that the new rules are aimed at them. It’s likely that the Yankees, the Red Sox and the Dodgers would be the only teams affected by a giant Tanaka contract, not to mention that they would be the only teams with the money and the desire to give Tanaka a giant contract.
The Players Association, meanwhile, favors the new system.
“It’s a tremendous benefit to the player over the other system,” said Rick Shapiro, a union lawyer. “Players benefit generally. “With Darvish and Matsuzaka, money went to the club where it could have been spent on them or other players. A maximum of $20 million is beneficial to players who are going to be posted.
“From our standpoint this is a better deal than when you have $50 or $60 million going from a club here to any other clubs.”
Shapiro noted one negative aspect of the Tanaka matter for the players.
“It’s had a negative effect on the pace of the market,” he said. “Everyone is waiting to see what is going to happen with Tanaka.”
ADVICE: KNOW YOUR SOURCES
It could be said that a reporter is only as good as his sources. But last week I discovered an example of how a reporter can only be as bad as his sources. While researching another matter, I found a mid-November column from the New York Daily News following the general managers’ meetings.
The column made several observations based on information from agents and executives.
- Teams have learned “the folly of giving 10-year contracts to players age 30 and above” so that should help the Yankees re-sign Robinson Cano.
- The “bidding will be fierce for Brian McCann, Carlos Beltran and Masahiro Tanaka, who appear to be the Yankees’ three top targets.”
“Honestly,” the column quoted an agent, “I’m not sure the Yankees will get any of those guys. The teams that are in on those guys have big money to spend and it’s not the way it used to be, where the Yankees could just go higher than everybody else.”
Noting that the Texas Rangers were interested in McCann, the agent said, “If McCann is the guy they want, I’ll bet they’ll go to the mat to get him.”
The column added, “if the bidding goes to, say, five years and $80 million-$85 million, you have to wonder whether the Yankees would go higher.”
The Yankees signed McCann to a five-year contract for $85 million.
- A person “close to the situation” said that “six teams have shown legitimate interest in Beltran, including those same Rangers and the Mariners — who are desperate to bring in both a slugger and some star power.”
If you missed it, the Yankees signed Beltran and Cano has taken his “star power” to Seattle.
GAME OF REVERSE COLLUSION
A lawyer who knows a thing or two about baseball matters was speculating the other day about the sport’s era of labor peace in the context of new labor chiefs on both sides – Tony Clark for the players, Dan Halem for the owners.
“The owners at some point in the future will again try to get control of salaries,” he said, alluding to the strikes and lockouts that stemmed from the owners’ futile attempt to get a cap on payrolls. “Salaries are getting so high the owners will think players won’t strike.”
That got me thinking, and I came up with a theory.
In the mid-1980s, the owners devised a scheme to keep players with their teams and not leave to go elsewhere as free agents for more money. It was called collusion, it violated the basic agreement provision that said “clubs shall not act in concert with other clubs” and it cost the owners $280 million.
If my lawyer friend’s speculation is right, I have an idea for the owners. With industry revenue at a record $8.5 billion, there is no limit to what they can pay the players. They demonstrate that every day with the contracts they give players.
The owners could keep escalating the salaries and get them so ridiculously high that the players couldn’t afford to strike and lose millions of dollars. Then the owners could throw their new payroll-cap proposal on the bargaining table.
The scheme would be the opposite of collusion and wouldn’t violate the labor contract because there’s nothing in it that prevents the owners from increasing salaries as much as they want as often as they want.