Nov
14

Update: MLB to amend posting system proposal, no deal yet

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2:22pm: Intrigue! MLB COO Rob Manfred told reporters at the GM Meetings that the league plans to change its proposal after NPB dragged its feet. “We warned them, told them, if this sat too long, there could be shifting winds out there. And suffice it to say, there have been shifting winds,” he said. There’s a chance there will be no agreement this winter, meaning Tanaka can not be posted. I’ll believe it when I see it, though.

Thursday, 8:45am: According to The Japan Times, the players’ union in Japan has formally agreed to the revisions and NPB is expected to approve the new posting system on Monday. Tanaka and other players could start being posted as soon as next Wednesday. Under the new system, the final posting fee is an average of the top two bids. That’s the only change as far as I can tell.

Tuesday: Via Ken Davidoff: MLB and NPB have “virtually agreed” to a revised posting system and an official announcement could be made soon, possibly as soon as today. The Rakuten Golden Eagles are expected to post ace right-hander Masahiro Tanaka shortly thereafter. The Yankees will reportedly pursue him very aggressively, so the sooner the agreement gets done and they can move forward with their offseason plan, the better.

Under the revised posting system, the high bidder still wins exclusive negotiating rights to the player. However, the final posting fee is now the average of the top two bids. So if the Yankees win Tanaka’s rights with a $100M bid and another team finishes second with a $50M bid, New York will only pay $75M. This gives teams some protection against a Yu Darvish situation (the Rangers outbid everyone by $25M or so). It’s also possible the winning team will still have to pay a percentage of the posting fee if they fail to sign the player, which will help deter clubs with no sincere interest from placing high bids just to block rivals. Makes sense, now wrap this up and let’s move on.

  • Blake

    Better have a plan B for the rotation because the dodgers willame some crazy bid now knowing they won’t have to pay the whole amount.

    My guess is they bid 80 and the yanks bid 60 and LA gets him for 70

    • I’m One

      If the MSN is anywhere near accurate about the Yankees level of interest, I expect their bid to be well above $60MM. However, I have no idea where the Dodgers will be on this. Even if the Yankees bid big, Tanaka could still end up with the Dodgers. I hope not.

      • Robinson Tilapia

        I don’t know how this happened, but I just wound up with the Dodgers. You did too.

        • Havok9120

          Is Cano there with Kuroda?

          • Robinson Tilapia

            Of course. WE’RE ALL THERE.

            Cashman failed.

    • Caballo Sin Nombre

      Ah, but the Yankees will now bid higher than they otherwise would as well, for the same reason. This is NOT going to reduce the posting fee for cases where multiple big spending teams are serious– probably the opposite.

  • Robinson Tilapia

    Come to papa.

  • Dr. Grenaldine

    Kei Igawa 2.0?

    • Robinson Tilapia

      Anything is possible.

    • John C

      doubt it. Igawa was a dumb reaction to losing out on DiceK. Yanks have scouted Tanaka thoroughly and scouting reports on him are all very favorable

      • Mickey Scheister

        Didn’t they ask him what his best pitches are and/or what pitches he threw after they signed him? I’m sure those guys are the same ones making this decision.

    • Pinkie Pie

      Tanaka has significantly better NPB stats than Igawa did when he came to the States.

  • Mike HC

    The proposal that allowed the player some kind of choice on the team he plays for made the most sense to me. But I guess you can’t give the player any power, no, definitely not. This average the top two bids change seems pointless and might not actually change what the final posting fee ends up being all that much. It might actually end up enticing teams to bid even more!

    • Havok9120

      It could go either way. Which is the only reason why both sides could agree to it.

    • MannyGeee

      I tend to agree with you. I would have liked for guys who are moving halfway across the fucking world to have a choice in where they end up.

      They shoulda went with both: the average of the top two bidders and the player can choose between the two. Literally nothing lost in that situation.

      • I’m One

        Makes sense, therefore ….

        (Kinda like how descisions/negotiations take place where I work. If there’s validity to an argument, it’s dismissed out-of-hand).

        /halfkidding

      • Mike HC

        An obstacle to doing both is that you can’t force the team with the 2nd highest bid to pay the higher average bid. If the Yanks bid 100 mil and the Cubs bid 50 mil, and Tanaka chooses the Cubs, the Cubs can’t be forced to pay 75 mil when they only bid 50.

  • Joe

    My concern with averaging the top two bids is that while it’s designed to keep posting fees from becoming exorbitant it could have the opposite effect. Say the Yankees and Dodgers both decide to aggressively bid on Tanaka’s rights and choose to place an extra-high bid with the hopes that a lower second place bid will help keep costs down.

    I could see both teams bidding in the $70-80 million range while only wanting to spend $50-60 million and then getting “stuck” when another team has the same mentality. I’m sure this will be a consideration for teams, but I don’t think costs will be dramatically reduced by this and I can see how it could have the opposite effect.

    • Vern Sneaker

      That’s what I was thinking. It actually can encourage high bidding.

      • Havok9120

        Exactly. Neither side would have agreed to the change if there wasn’t potential benefit for them both.

        It could keep some posting fees low. It could increase others. Both sides see a potential gain.

    • Jobu

      Interestingly enough this is exactly what research has shown will happen when you start averaging top bids in a blind auction. I am not sure why MLB would want this/agree to this as there is a high probability that it will end up favoring the Japanese teams.

      • Laz

        But you get your money back if you don’t sign the player.

        • Mikhel

          There’s a proposal that says teams will have to pay a fee if they win the bidding and fail to sign a player, to avoid teams from blocking a player for a full season. There’s another proposal in which a player becomes a free agent and can negotiate with anybody, but that hurts the Japanese team because their earning will diminish greatly.

    • Mikhel

      That’s why this type of auction drives the prices down, buyers now bid what they think a product is worth and do not risk placing a high bid to avoid paying more than what they already calculated a product’s “value”(its price and strategies to monetize it).

  • Mr. Roth

    Just bid $120 million and be done with it.

  • Caballo Sin Nombre

    Another thought: there is now a reason to make an aggresive LOSING bid. — to burn down the winning team’s cash pile.

    Lot of potential for fun nastiness.

    • I’m One

      But how do you determine what is an aggreswsive “losing” bid, as opposed to an agressive “winning” bid (which presumably, you don’t want to do)?

      • Havok9120

        Commercial espionage and wire taps.

        • I’m One

          Happens every day.

        • Jobu

          Which is exactly how the Yankees should be spending their luxury tax savings.

        • MannyGeee

          The Wire!

      • Caballo Sin Nombre

        Game Theory. Look it up if you’re not familiar with it (or watch “A Beautiful Mind.” :)). This will be the new hot research topic among the SABRE crowd.

        • Mikhel

          It is SABR, and you should read first about game theory and not rely on a movie. Game theory is far more complex than what you think.

  • JK5

    This is why you put a penalty kicker in there…so teams don’t bid 100 mill on a guy they’re only prepared to spend 75 mill on cause they think the next highest bid would be 50 mill. Gotta burn being caught between giving out 90 or so mill before you even get a player and forking over 10-20 mill or whatever the penalty would be for nothing. It’s kinda awesome that such a big Japanese star is going to be the first guy this new system is tested out on…final table of the World Series of Pokers got nothing on this.

  • Jobu

    In theory, averaging the top two bids will increase the net amount paid to Japanese teams in future postings but giving the player the ability to pick between the top two bidders would hold down the posting fees. The posting fee is like buying an option (except that in this case the payment is conditional on consummation of the player contract). If two teams had to compete for the player, this would naturally create a bidding war for the player’s services, a significant deviation from the current bilateral negotiations model. The resulting higher expected value teams would pay for Japanese talent would change the expected value of the asset covered by the posting fee/option price. Which would of course put downward pressure on the posting fee.

    So basically, MLB should have held out for a player choice to counteract the upward pressure that the averaging of the top two bids will put on posting fees.

  • Robinson Tilapia

    New system:

    Everyone bids.
    All bids go to Yankees, who have option of bidding one penny more.

    Seems fair.

  • I’m a looser baby so why don’t you kill me?

    Want.

  • Farewell Mo

    I think this is going to drive the bids even higher now since teams will now have less reluctance to throw out a bid that far exceeds all the others.

    Either way, Cashman just needs to get this shit done.

  • OMG, WTF is the BFD?

    I’m thinking the high bid needs to $80.75 mm.

  • http://yahoo Tony

    I think we may see the Yankees bid $100 Million…..

  • blehmann

    It would be extremely surprising if the actual amount paid was affected at all by now averaging the two high bids. It is a matter of fact in auction theory that turns out to be true in actual practice with experienced bidders that the amount paid does not change under different rules for the link between the amount bid and the amount paid. For example, second price auctions in which the high bidder pays the second highest bid yield the same revenues as first price auctions in which the high bidder pays his or her bid. This change in rules is a non-event.

  • Mike

    The bids are going to be ridiculously high now. It might even double the posting bids of Darvish.

    Tanaka better not be a bust or some GM is going to look real stupid.

  • bpdelia

    I am universally opposed to blind anything. Dogs. Cats. Fish. Bids. Blind bidding is absurd and I’m not sure who it benefits. In theory on the top players it may MAY drive the price up. Or down. One of those two. Unless it has no impact.

    Theory works on the assumption that players in any market are rational. I prove that assumption, the underpinning of the entire science, on a daily basis as walk about the world and see irrational purchases made for irrational prices.

    Also I often see people fall down, crash their cars and get various inanimate objects stuck in various bodily orifices.

    • Mikhel

      “In theory on the top players it may MAY drive the price up. Or down. One of those two. Unless it has no impact.”

      LOL are you drunk? You say it MIGHT drive the price up, or MIGHT drop the price down, or MIGHT not have an impact. You surely covered all the bases there.

      “Theory works on the assumption that players…”

      What theory? the one you said either drives the price up, or maybe down, or maybe nothing happens? That’s not a theory, that is pure rambling.

      “…the assumption that players in any market are rational.”

      Uhm nope, in this case you can’t assume a player is rational and will react to the offers he has, because remember it is a blind bid, a player has no saying before he is presented with either the top bid or the top two-three bids as is being proposed. And even then, he doesn’t know the amount his team will get, he is just presented with the proposed contract for him.

      “I prove that assumption, the underpinning of the entire science, on a daily basis as walk about the world and see irrational purchases made for irrational prices.”

      You are not proving a single thing, you’re just observing. When there’s no water, then water becomes a demand and its price increases. When there’s no customers for a bottle of water, the offer (the amount of watter bottles) increases and their price decreases. There are ways to provent that from happening.

  • Dr. Grenaldine

    ::Slowly takes party hat off and takes down balloons::

  • Dicka24

    Weird adjustment to the system. It could have a negative affect like some are saying. If I’m the Yankees, I bid $80-100 million. If they win, great. If they win at too high a price, they “fail” to come to an agreement with Tanaka, and move on. The problem with the posting process, is that these players are now moving closer to being cost prohibitive, than they are cost effective. Darvish will cost Texas something like $20 million per if I’m not mistaken. Dice-K cost the Sox $100 million over his 6 years I think. Tanaka will likely cost $120-150 million over 6 years. All this money for unproven, relatively unknown players. Being from Boston, Dice-K was being sold as an instant ace. He had 5 pitches, pin-point control, 95 mph with ease, etc. He sucked bad. And while Darvish is proving to be the real deal, the general consensus is that Tanaka isn’t as good at Darvish. Or at least doesn’t have the same ceiling. To hedge a $120-150 million bet on heads-Dice-K, or tails-Darvish, really points to how bad the posting system is. I know though, it’s only money, and the teams “save” on the luxury end of the posting fee.

    • Mikhel

      You are forgetting to include Hiroki Kuroda, Hideki Matsui, Ichiro Suzuki, Katzuhiro Sasaki and Hideo Nomo as products of a league that has had more triumphs in the international level than the MLB, unproven players that have had very good careers and didn’t suffer the change of league.

      Even when Matsuzaka “sucked”, he generated a lot of interest in Japan and Boston quickly recovered the money invested in him by making TV and marketing deals. Their sales soared in Japan, a market dominated mainly by H. Matsui and Ichiro.

      In the end, $100-$120 millions is a lot of money, but is less than what unproven players are getting nowadays once they leave the stadium where they hit A LOT and end up being a fiasco playing as a local in other stadiums (check for example the ridiculous splits David Ortíz has at Fenway and outside of Fenway). But, at least that money teams invest in Japanese players more likely than not, they will get back with TV deals and marketing.

      • Dicka24

        Those others signed as FA’s which didn’t require a $50-80 million posting fee, and the “revenue” from signing Japanese players, particularly starting pitchers, who only play every 5th day, are severely overstated. There was an article here in Boston about that during Dice-K’s years here. That the Sox didn’t quite get the return in marketing that they expected. In part because licensing is shared, and avenues where which teams gain individual earnings, are limited. Everyday players generate a lot more interest than pitchers do.

  • Gonzo

    This is interesting. There is a report on twitter that Rob Manfred actually brought up free agency for Japanese players with no agreement in place. I’m sure this is posturing, but wow.

    • Mikhel

      Anything can happen, MLB for example, has recognized the Mexican Summer League as the sole producer of mexican players and granted the teams in that league power on how to dispose the money the players get when they sign in the US.

      What happened? Well MLB accepted that Mexican Summer League teams have to keep 75% of a player’s signing bonus, and MLB teams won’t sign a player unless he is signed by a Summer League team, they only want to negotiate with that league.

      Summer league teams now depredates amateur tournaments looking to sign young players for nothing (they actually sign for nothing but a promise to receive training for a week in an academy or a baseball clinic) and with the rules in the summer league, the players are signed for life and if somebody wants them, they have to pay the summer teams.

      That league is on the verge of dying (meanwhile the stronger league, the Pacific League which is played in winter, is thriving), and most of the teams survive with government subsidies and attendances in the hundreds or less than 2,000 per game in half the teams. But their owners are happy because they can pocket the money from the government and the money paid for the players.

      What does MLB do? Not a single thing, MLB and the summer league are being sued by Adrián González’s dad because of that practice.

  • http://www.twitter.com/_swarlesbarkley Mark Teixiera – Ghostbuster (formerly Drew)

    There isn’t something that can buttfuck the Yankees off-season plans more than if Tanaka can’t be posted.

    • Robinson Tilapia

      They can’t possibly be thinking of him as a high probability. If they do/did/are/were, they’re on some Rob Ford shit.

  • Dr. Grenaldine

    What does the MLB CEO make per year compared to the Commissioner I wonder…

  • Gonzo

    If Tanaka is off the table this offseason, does Cano benefit somehow?

  • Mikhel

    “I’ll believe it when I see it, though.”

    It already happened with the winter leagues, Mike, MLB opposed to the idea of including Cuba to the Caribbean Confederation and they dragged the negotiations for months until México, Puerto Rico, Dominicana and Venezuela agreed not to include Cuba because otherwise MLB wouldn’t grant permits to hispanic players to play winter baseball in their countries (players faced penalties).

    MLB showed they can block any negotiation when they want to, just because they don’t want something or are not willing to per-se negotiate but dictate what they want to do.

  • Mike

    I think the Tanaka sweepstakes was getting out of hand anyway.

    These bid estimates are making it out like he’d be a legit #1 or #2 starter right off the bat.

    I wouldn’t mind just resigning Kuroda and/or Garza. At least they’re proven.