The 2017-18 international free agent class and the Shohei Otani question

(Atsushi Tomura/Getty)
(Atsushi Tomura/Getty)

For years and years and years, the Yankees built their farm system through international free agency. They were in contention every year and forfeiting their low first round picks to sign top free agents all the time, though they were able to spend freely in international free agency to compensate. That’s why so many of their top prospects from 1998-2012 or so were international signees. Alfonso Soriano, Wily Mo Pena, Robinson Cano, Chien-Ming Wang, Melky Cabrera, Jesus Montero, and so on.

Nowadays teams can’t spend freely internationally. The new Collective Bargaining Agreement implemented a hard spending cap. Under the just completed CBA, each team was given a set bonus pool and punished harshly if they exceeded it. It was a soft cap. Three years ago the Yankees blew their bonus pool out of the water and signed many of the best available players. Four of my top 30 prospects were part of the 2014-15 international signing class.

As a result of that spending spree, the Yankees had to pay a 100% tax on every penny they spent over their bonus pool — the total payout between bonuses and taxes was north of $30M — plus they were unable to sign a player for more than $300,000 during both the 2015-16 and 2016-17 international signing periods. That restriction will be lifted when the 2017-18 international signing period begins July 2nd. Hooray for that.

Earlier this week Ben Badler (subs. req’d) reported the Yankees, who have a $4.75M international cap this year, have been connected to Venezuelan center fielder Everson Periera in advance of the 2017-18 signing period. I can’t find much on the kid at all, but apparently he’s a big deal. Here’s some video:

The Yankees and every other team have been scouting international players for years, and I’m certain there are some contract agreements already in place even though they aren’t allowed. It happens all the time. Badler is the best in the business, and if he says the Yankees are connected to Periera, I not only don’t doubt him one bit, I assume the two sides already have some kind of deal in place.

The international hard cap really stinks, especially for the kids, though at least the Yankees will be able to hand out large bonuses to talented kids like Periera again. Being limited to $300,000 bonuses the last two signing periods stunk. The big question to me right now is not necessarily who will the Yankee sign on July 2nd. It’s how are the Yankees planning for Shohei Otani, if at all?

Otani, as you surely know, is the best player in the world not under contract with an MLB team. He threw 140 innings with a 1.86 ERA and 174 strikeouts for the Nippon Ham Fighters last year while also hitting .322/.416/.588 with 22 homers. Most agree Otani’s long-term future lies on the mound because he has ace potential. For now, he’s a monster two-way player for the (Ham) Fighters.

Otani has expressed interest in coming over to MLB as soon as next offseason, though because he is only 22, he will be subject to the international hard cap. He’d have to wait three years until he’s 25 to be able to sign for any amount like a true free agent. Should Otani be posted after this coming season, all 30 clubs figure to shovel their remaining international cap space in front of him and hope it’s enough to sign him. What else could you do?

If you’re the Yankees — or any other team, for that matter — do you pass on Periera and everyone else on July 2nd and instead conserve your international cap space for Otani in the offseason? It’s awfully risky. Otani is not guaranteed to be posted. You’re walking away from the top international talent in July with no assurances Otani will be available after the season, and even if he is available, it’s far from a guarantee you’ll sign him. The odds of ending up with no talent and a bunch of international money burning a hole in your pocket is quite high.

At the same time, Otani is so insanely talented that you’d hate to take yourself out of the market for a big league ready impact player to sign a bunch of 16-year-old kids who are years away from reaching MLB. (The Yankees signed Gary Sanchez, a top international prospect, in July 2009 and it wasn’t until August 2016 that he reached the show for good, so yeah.) Otani would fit New York’s youth movement so well. He’d be the young rotation cornerstone they need going forward.

There’s always a chance the (Ham) Fighters will announce in advance they’re going to post Otani after the season, but I can’t remember that ever happening. If anything, it’s usually the opposite. We wait weeks and weeks in the offseason waiting for the team to decide whether to post the player. That’s what happened with Masahiro Tanaka and Yu Darvish. We didn’t know for sure they would be posted until their teams actually posted them.

I can’t imagine the (Ham) Fighters want to announce they’re moving their best player after the season ahead of time. That won’t sit well with fans. Then again, perhaps they could make a great event out of it and have a big farewell tour. That’d be kinda cool. Point is, it’s far from certain Otani will be available after the season. He may decide to wait out the next three years, make good money in Japan, then come over to MLB when he’s 25 and no longer subject to the international hard cap.

That the Yankees are already connected to a guy like Periera indicates they plan on approaching the 2017-18 international free agency period as if it’s business as usual. Badler’s report says eleven other clubs, including traditional big international spenders like the Red Sox, Mariners, and Blue Jays, are also connected to Latin American players for the 2017-18 signing period, so the Yankees aren’t the only team taking this approach.

(The Athletics, Astros, Braves, Cardinals, Cubs, Dodgers, Giants, Nationals, Padres, Reds, and Royals will all be limited to $300,000 bonuses during the 2017-18 international free agency period as a result of past spending, so that’s the max they could offer Otani next offseason.)

My guess right now is that, despite the rumblings, Otani will not be posted next winter. The max bonus he can receive under the international hard cap is only a touch more than his projected salary with the (Ham) Fighters in 2018. He could remain in Japan until 2019, make close to what he’d make in MLB in the meantime, then come over when he can sign a monster contract at 25. The Yankees and plenty of other clubs seem to be proceeding as if that will be the case.

Thursday Notes: Mendoza, Montgomery, Prospect Lists

(Presswire)
(Presswire)

The seemingly never-ending offseason continues. I guess the good news is the Yankees’ first Grapefruit League game is four weeks from tomorrow, and yes, that game will be broadcast on the YES Network. Four weeks and one day until actual baseball is on your television. It’ll be glorious. I’ll post the full Spring Training broadcast schedule once all the networks announce their plans. Until then, here are some newsy nuggets to check out.

Hector Mendoza declared a free agent

Cuban right-hander Hector Mendoza has been declared a free agent by MLB, reports Jesse Sanchez. Sanchez says Mendoza is expected to wait until his 23rd birthday on March 5th to sign, at which point he would be a true free agent unaffected by the international spending restrictions. Every team, including the Yankees and other clubs currently limited by international bonus penalties, would be able to sign him to a contract of any size at that point.

Back in April 2015, Ben Badler (subs. req’d) ranked Mendoza as the 12th best prospect in Cuba, one spot ahead of current Dodgers farmhand Yasiel Sierra. “At his best, he throws 90-94 mph with downhill plane, with solid strike-throwing ability and fastball command for his age … His 76-80 mph curveball is a solid-average pitch,” says the two-year-old scouting report. It also mentions Mendoza features a changeup and figures to start long-term.

Sierra signed a six-year deal worth $30M last February — he then pitched to 5.89 ERA (4.26 FIP) in 88.2 innings split between High-A and Double-A last year, and reportedly didn’t impress scouts either — so I guess that’s the benchmark for Mendoza. The Yankees have steered clear of the big money Cuban player market the last few seasons, so I’m not expecting them to get involved. And, frankly, I didn’t even know the guy existed until a few days ago.

Teams asking for Montgomery in trades

According to George King (subs. req’d), Brian Cashman confirmed teams have asked for left-hander Jordan Montgomery in trade talks this offseason. “He is a starter and left-handed. His name comes up,” said the GM. Not only that, but Montgomery has already has success at Triple-A (albeit in 37 innings) and is close to MLB ready, making him even more desirable. Here’s my prospect profile.

It can be really easy to overlook a guy like Montgomery given the strength and depth of the Yankees’ farm system, but he’s come a long way as a prospect the last few seasons. He’s added a cutter and also gained quite a bit of velocity, going from 88-91 mph in college to 93-95 mph in 2016. The Yankees seem to have a knack for getting guys to add velocity. Their throwing program must be good. We’ll see Montgomery in the Bronx in 2017. I’m sure of it.

MLB.com’s top prospects by position

Over the last few days MLB.com has been releasing their annual positional prospect lists. That is, the ten best prospects at each position. Several Yankees farmhands make appearances on the various lists. Here’s a quick recap:

I’m a bit surprised the Yankees only had one player on the outfield list, but eh, whatever. The shortstop list is stacked as always. Torres is one spot ahead of Braves shortstop Dansby Swanson, the first overall pick in the 2015 draft. Mateo is one spot ahead of Twins shortstop Nick Gordon, the fifth overall pick in the 2014 draft.

James Kaprielian failing to crack the top ten righties shouldn’t be a surprise. He did miss just about the entire 2016 season, after all. Also, I’d be more bummed about not having a top catcher prospect if, you know, Gary Sanchez didn’t exit. But he does and that’s cool. Same thing with first base and Greg Bird. Landing five prospects in the various top ten lists is pretty cool.

Update: On Twitter, Jim Callis says Blake Rutherford ranks 14th among outfielders in MLB.com’s upcoming top 100 prospects list.

Spring Training is getting shorter

Starting in 2018, Spring Training will be a whole two days shorter, reports Ronald Blum. Huge news, eh? As part of the new Collective Bargaining Agreement the regular season will increase from 183 days to 187 days starting in 2018, and the shorter Spring Training will help make that happen. The goal was to add more off-days “in a way that doesn’t just chew up offseason days,” said MLBPA general counsel Matt Nussbaum.

The players have been pushing for more in-season off-days for a while now, and at one point they proposed shortening the season to 154 games. I’m not surprised that didn’t happen. The owners would be giving up four home games each, plus television contracts would have to be revised because they include a minimum number of broadcasts and things like that. Lots of logistical issues to work through. So anyway, two fewer days of Spring Training in two years. Yippee.

Mailbag: Other top NPB players who could come to MLB

The mailbag inbox was pretty empty this week thanks to the holidays. That’s okay, because every so often we get a great question that is worth its own post, and that was the case this week. So, rather than the usual multi-question format, we’ve got one question and one big answer this week. RABmailbag (at) gmail (dot) com is the place to send us questions.

Yamada. (Masterpress/Getty)
Yamada. (Masterpress/Getty)

Dan asks: Are there any other players on the Japanese market besides Otani that we can be excited about in the future?

There are definitely a few, but none come close to Shohei Otani in terms of potential big league impact. He is truly in a class all by himself right now. Otani is the best player in Japan and has the tools to be an ace-caliber pitcher in MLB, if not a reliable hitter as well. I’m curious to see if a team will let him hit and pitch when the time comes. That just might be what it takes to sign him.

Anyway, most of the top talent in Japan in terms of big league potential is on the mound right now. These things to tend to be cyclical, and right now there are more high-end arms than high-end bats. Check back in a few years and the opposite will probably be true. So, with that in mind, here are five non-Otani players in Nippon Pro Baseball who could interest MLB teams in the near future. This isn’t a comprehensive list. It’s just a few of the most notable. The players are listed alphabetically.

RHP Kohei Arihara

Arihara, 24, just finished his second season with the Nippon Ham Fighters, during which he had a 2.94 ERA with 103 strikeouts (16.1 K%) and 38 walks (5.9 BB%) in 22 starts and 156 innings. He runs his fastball up to 96 mph and uses a wide array of offspeed pitches, and while nothing he throws is a truly dominant offering, Arihara has good command and really knows how to pitch.

Arihara has gotten plenty of extra scouting exposure recently as Otani’s teammate. Once he gets some more experience under his belt — he missed time in college with elbow injury, which is obviously a red flag — Arihara will be a candidate to come over to MLB. His upside may be limited, but there’s a chance for mid-rotation production here.

RHP Shintaro Fujinami

Back in 2012, Otani and Fujinami were the top two prospects in the NPB draft, and plenty of folks at the time preferred Fujinami because his secondary pitchers were more advanced. Otani went first overall — Fujinami was selected by four teams in the first round, then was awarded to the Hanshin Tigers after a lottery drawing (the NPB draft is weird) — and has since developed into the better NPB player and MLB prospect, but Fujinami is damn good himself.

The 22-year-old Fujinami had a 3.25 ERA in 26 starts and 169 innings in 2016, striking out 176 (24.0 K%) and walking 70 (9.6 BB%). Control has been his biggest issue — he’s walked 9.2% of batters faced in his four NPB seasons — but he misses plenty of bats with a 92-95 mph fastball, a mid-80s splitter, and a low-80s slider. His 221 strikeouts a year ago were by far the most in the Central League, Japan’s non-DH league. Only one other player had more than 175 strikeouts. (Randy Messenger had 194.)

Fujinami is widely considered the second best MLB prospect in Japan, but he’s in the same boat as Otani. He’s only 22, which means he’ll be subject to the international hard cap for the next three years. Also, Fujinami is five years away from qualifying for international free agency, so he’ll have to go through the posting system to come over at any point before the 2021-22 offseason. It’s not only Otani who is getting screwed over by the hard cap.

LHP Yusei Kikuchi

A few years ago Kikuchi, now 25, was considering jumping to MLB straight out of high school, which would have been unprecedented. (Junichi Tazawa was undrafted out of high school, played one year in a Japanese independent league, then chose to forego NPB for MLB.) NPB doesn’t like the idea of the best young Japanese players not playing in Japan, so nowadays anyone who signs with an MLB team out of high school is banned from NPB for at least three years. Not surprisingly, no one has done it.

Anyway, Kikuchi has spent the last six seasons with the Seibu Lions and has career has been up and down, mostly due to shoulder problems. He had a 2.58 ERA with 127 strikeouts (21.3 K%) and 67 walks (11.3 K%) in 22 starts and 143 innings this past season, though the blazing mid-to-upper-90s fastball that made him such a hot commodity as a teenager now resides mostly in the low-90s. Kikuchi relies on his three offspeed pitches (curveball, slider, changeup) to get most of his outs these days.

It’s no secret Kikuchi wants to come over to MLB at some point — he met with several clubs, including the Yankees, back in 2009 when he considered coming over after high school — and since he’s 25, the international hard cap won’t apply to him. It’s up to Seibu to post him because he’s still three years from international free agency. Kikuchi is not the tippy top MLB prospect he was a few years ago, but lefties who can miss bats are always going to get a look.

RHP Takahiro Norimoto

Three years ago the 26-year-old Norimoto took over as staff ace of the Rakuten Golden Eagles after Masahiro Tanaka left via the posting system. His last two seasons have been eerily similar:

IP ERA Strikeouts Walks Homers
2015 194.2 2.91 215 (26.9%) 48 (6.0%) 14 (0.65 HR/9)
2016 195 2.91 216 (26.3%) 50 (6.1%) 12 (0.55 HR/9)

Freaky. Norimoto has big stuff but not big size. He’s listed at 5-foot-10 and 178 lbs., and fair or not, teams are always wary of undersized righties. Durability is a concern, and so is fastball plane. Teams worry short pitchers will be fly ball and home run prone because they can’t pitch downhill. Still, Norimoto has a mid-90s fastball and can miss bats with both his splitter and slider. That’ll play.

Norimoto signed a three-year extension worth $1.72M per season last month, so he’s not coming over to MLB anytime soon. That’s a shame. He wouldn’t have been subject to any international spending restrictions because of his age. Not the bonus pools this signing period or the hard cap that takes effect next signing period. Womp womp. Norimoto will be 29 before he’s eligible to come over to MLB.

IF Tetsuto Yamada

Over the last three years, and especially the last two, Yamada has established himself as one of the most dominant hitters in Japan. Last season he hit .329/.416/.610 with 38 home runs and 34 stolen bases en route to being named Central League MVP. He was the first player in NPB history to win both the home run and stolen base titles. Yamada also had a Reggie Jackson moment in the postseason, swatting three home runs in three consecutive plate appearances in Game Three of the Japan Series.

This past season the 24-year-old Yamada managed a .304/.425/.607 batting line with 38 homers and 30 stolen bases for the Yakult Swallows. He’s a right-handed hitter with tremendous bat speed and quick twitch athleticism, plus he knows how to control the strike zone (17.2 K% and 14.4 BB% from 2015-16). While going 30-30 in the big leagues might not happen, Yamada has 20-20 potential, which would be pretty damn valuable from a good defensive middle infielder. (Reports indicate he fits best at second.)

Yamada has supposedly expressed interest in coming over to MLB, and since he’ll turn 25 in July, he won’t be subject to the international hard cap next offseason. The Swallows can post him and Yamada can sign a contract of any size. Unless the posting agreement gets changed again, that is. MLB seems to like making it difficult for top overseas players to play in their league for whatever reason.

It’s worth noting most of the biggest busts among Japanese players in MLB have been infielders (Kaz Matsui, Tsuyoshi Nishioka, etc.), and I’ve seen speculation that the game is so much faster here that infielders have a tough time adjusting, and their defensive issues carry over at the plate. Who knows whether that’s true. There’s risk with every signing, and it is fair to wonder whether Yamada’s big leg kick will play over here. My guess is some team will bet millions on his power-speed combination.

* * *

The Yankees have shown they will get involved in the Japanese market if there’s a player they really like, though they’re going to do their homework first. They won’t rush into anything like they did with Kei Igawa again. Otani is clearly the best Japan has to offer for a few years. Others like Fujinami and Norimoto are intriguing, though they face obstacles coming over (hard cap for Fujinami, contract extension for Norimoto).

Yamada could end up being a very big deal next offseason, assuming the Swallows agree to post him for MLB teams, which is far from a given. Middle infielders in their mid-20s with power and speed are always in demand. Even with Didi Gregorius and Starlin Castro up the middle, plus a ton of shortstop prospects in the system, the Yankees may get involved should Yamada be posted. Third base is a question long-term and Yamada could help solve that (Yamada at second, Castro to third?).

Wednesday Notes: IFA cap, Draft MRIs, Tommy John rehab, Under Armour

(Ezra Shaw/Getty)
(Ezra Shaw/Getty)

According to Ronald Blum, the owners voted and ratified the new Collective Bargaining Agreement last night. The vote was 29-1. Only Rays owner Stu Sternberg opposed. The MLBPA approved the CBA unanimously, the union announced, it’s a done deal. Officially official. Details of the new CBA are still trickling in, so here’s some big picture news from around the league.

Yankees have $4.75M to spend internationally

The new CBA has implemented a hard cap on international free agents, and according to Ben Badler, the Yankees will have a $4.75M pool during the 2017-18 signing period. That’s what I figured based on everything we heard in the days following the CBA announcement, but now it’s official. The Yankees and every other team can trade for additional 75% in cap space. That works out to an extra $3.5625M. Now they have to find someone willing to trade cap space.

The bonus pools are based on market size now, not reverse order of the standings. Sixteen of the 30 teams have a $4.75M pool. Six get $5.25M and eight get $5.75M. Each team also gets an unlimited number of $10,000 bonuses that do not count against the cap. Between the international hard cap and the draft pools and the stiff luxury tax rates, the Yankees are running out of ways to flex their financial muscle. Each new CBA seems to bring them closer to the rest of the pack in terms of spending capacity.

Draft prospects can now volunteer for MRIs

According to Jon Morosi, the top 50 draft pitching prospects can now undergo a voluntary pre-draft MRI to show teams they’re healthy. (The top 50 are determined by the MLB Scouting Bureau, I assume.) I see this as a good thing for those players, for two reasons. For starters, this will help avoid a Brady Aiken situation, in which a team drafts a player, finds out he’s injured, then walks away and forfeits all that draft pool space. The MRIs help keep that money in play.

Secondly, it gives the player and his agent time to do damage control. If someone has an injury, it’s going to be discovered anyway. Either during the pre-draft MRI, or after the draft during the pre-signing MRI. If a pre-draft MRI shows an injury, it gives the agent time to shop the player around and find a team willing to sign him anyway. Those teams are definitely out there. If the player waits until after the draft to have the MRI, he can only negotiate with that one team. So yeah, it seems like volunteering for a pre-draft MRI carries a lot of risk, but ultimately, I think it’s a good thing for the players. Teams too.

Tommy John rehab stint extended to 60 days

As part of the new CBA, pitchers rehabbing from Tommy John surgery can now spend 60 days on a minor league rehab assignment, reports Jeff Passan. It used to be 30 days, though teams would dance around this by having the pitcher pitch in Extended Spring Training games, which aren’t official minor league games and don’t count against a rehab clock. Problem is there’s no ExST after June, so if your player is rehabbing in, say, August, you’re out of luck.

Once upon a time, the standard Tommy John surgery rehab timetable was 12 months. Not anymore. Nowadays teams are giving their pitchers 14-16 months to rehab, sometimes longer. There was a rash of pitchers needing a second Tommy John surgery a few years ago (Kris Medlen, Daniel Hudson, Brandon Beachy, Jarrod Parker, etc.) and the thought was they came back too soon from the first procedure. A 60-day rehab windows allows teams to be patient and give pitchers even more competitive minor league rehab starts. Good news.

Under Armour to become official uniform provider

At the Winter Meetings last week, MLB announced Under Armour will replace Majestic as the league’s official uniform provider beginning in 2020. It’s a ten-year agreement. “We are excited to build on our partnership with Under Armour, a powerful global brand that continues to grow exponentially … We appreciate Majestic’s many contributions to our clubs, players and fans throughout our partnership,” said commissioner Rob Manfred in a statement.

Okay, great. So MLB has a new uniform provider. Who cares, right? Well, according to Paul Lukas, as part of the agreement, Under Armour will be allowed to slap their logo on the upper right chest of all jerseys, like so:

under-armour-yankees-jersey

If you click through the Lukas link, he has some images of players with the Under Armour logo photoshopped onto their jerseys. The Majestic logo is currently on the sleeves of MLB jerseys. The Yankees were granted an exemption and are the only club without the Majestic logo on their uniform. That won’t be the case with Under Armour though. They’ll have the logo on their chest too.

It’s only a matter of time until full-blown advertisements wind up on MLB jerseys — I have no idea if that’s five years away, or ten, or 30, but they’re coming — and the Under Armour logo is step one. Well, I guess the Majestic logo was step one, but moving them to the front of the jersey is a pretty big deal. The New Era logo will now be displayed on the left side of all caps starting next season, Yankees included, so the #brands are coming. The iconic, untouched Yankees jersey of the last century will soon be no more.

Shohei Otani still expected to be posted next offseason, which is great news for the Yankees

(Atsushi Tomura/Getty)
Otani or Ohtani? Neither, actually. (Atsushi Tomura/Getty)

Earlier this week we learned Shohei Otani, the best pitcher (and hitter?) in the world not under contract with an MLB team, hopes to come over to MLB next offseason. The new Collective Bargaining Agreement means Otani will be subject to the international spending cap, severely limiting his earning potential. Hard to believe MLB and the MLBPA created a system that incentivizes a great player to stay away from the league, but here we are.

Anyway, according to Jim Allen, Otani’s manager with the Nippon Ham Fighters, Hideki Kuriyama, said he still expects Otani to come over next offseason despite the hard cap. He’s doing it for the challenge, not necessarily the money. “I think money is not a matter for Shohei. I think what he has in his mind is where and what kind of batters he wants to face,” said Kuriyama to Kyoto.

Needless to say, Otani coming over next season is good news for the Yankees. He’s a potential ace who will turn 23 in July, meaning he has so many prime years ahead of him. Otani would fit right in with New York’s youth movement. He’d be the centerpiece of the youth movement on the pitching side. Three other factors would make his decision to come over next offseason very good for the Yankees.

1. Several other big market teams will still be limited by the international spending penalties. The Yankees are currently riding out the second year of the penalties associated with their 2014-15 international spending spree. They were limited to $300,000 maximum bonuses during both the 2015-16 and 2016-17 signing periods. Come the 2017-18 signing period, the one Otani will count against next offseason, they’re free to spend again.

Other big market teams are not so lucky. The penalties do carry over to the next CBA — you didn’t think MLB would let those teams get away easy, did you? — which means the Athletics, Astros, Braves, Cardinals, Cubs, Dodgers, Giants, Nationals, Padres, Reds, and Royals will all still be dealing with the penalties from their recent international spending sprees. They can’t offer Otani more than $300,000. Right off the bat, potential suitors like the contending Astros, Cardinals, Cubs, Dodgers, Giants, and Nats are out of the race. The Yankees, Red Sox, Blue Jays, Tigers, Mariners, and Rangers will be the only traditional big market clubs not subject to the $300,000 limit.

2. The release fee still applies. There are two systems in play here. First, the posting agreement between MLB and NPB, which allows Otani to come over. And two, MLB’s international hard caps. Otani has to be posted, which means the (Ham) Fighters will presumably seek the maximum $20M release fee. Not every team can afford to pay that upfront. Well, they can, but some choose not to. The Yankees have no such problem. They’ll cut a $20M check no problem, like they did with Masahiro Tanaka and, ugh, Kei Igawa.

3. Otani will be insanely cheap. This is how it will work, as things stand. Otani gets posted and some team agrees to sign him for what I assume will be their entire international pool. That team pays the (Ham) Fighters the $20M release fee. Otani comes to Spring Training as a non-roster invitee (minor league contracts only for international players!), makes the team, and plays the 2018-20 seasons as a pre-arbitration eligible player making something close to the league minimum. An ace at that salary is basically the most valuable commodity in baseball.

Could a team promise to give Otani, say, an eight-year extension worth $180M at some point next year? Sure. But as Ben Badler notes, MLB would likely see such an arrangement as intentional circumvention of the hard cap and put an end to it. Otani, who made roughly $1.75M in 2016 and recently signed a $2.36M contract for 2017, won’t be able to truly cash in until his arbitration-eligible years. At that point I’m guessing MLB and especially the MLBPA would be okay with a big extension. If not, a grievance will surely follow.

* * *

The new CBA really screws over Otani, who is still making good money in Japan, but not nearly what he could be making over here. He’ll get a nice bonus when he signs next year, then have to settle for the big league minimum for a few years. It’s a fraction of what he’d get had he not been eligible for the spending cap because of his age. So much can go wrong from 2017-20, before the big extension, which really sucks. Otani has to assume a lot of risk.

Unless MLB makes Otani exempt from the hard cap — Ken Rosenthal has been told from MLB as well as teams there won’t be an exemption — in which case everything changes, the Yankees will be in great position to sign him next offseason. So may other big market clubs are dealing with the $300,000 limit, and many of clubs that aren’t can’t afford to fork over a $20M release fee. The Yankees also have the advantage of saying, “Hey, we’re in New York, so you’ll be able to make millions in endorsements for the time being.” (The downside: Every team can offer similar money.)

As it stands, the hard cap is incredibly unfair to Otani and a godsend for the Yankees. It makes the signing so incredibly low risk because all they’d have to pay is the release fee ($20M), his bonus ($4.75M), and three years at the minimum-ish salary ($2M, tops). That’s $26.75M total. How could they not go after him at that price given his upside? If Otani does intend to come over next season despite the hard cap, the Yankees couldn’t ask to be in a better situation. So much is working in their favor.

Monday Notes: Sabathia, Tanaka, WBC, Otani

(Adam Hunger/Getty)
(Adam Hunger/Getty)

The 2017 Winter Meetings are in full swing down at the Gaylord National Resort & Convention Center just south of Washington, DC. Here are the day’s Yankees-related rumors and here are some other bits of news and notes.

Sabathia doing well after knee surgery

At a charity event over the weekend, CC Sabathia told Evan Drellich he is doing well following right knee surgery earlier in the offseason. His throwing program is set to begin today. Sabathia had what the Yankees called a “routine clean-up” procedure on his knee after the season, the knee that has given him all that trouble in recent years. The procedure was planned well in advance. It wasn’t a surprise or anything.

Sabathia, 36, is entering the final year of his contract, and he’s probably the second best starter on the team right now. I know if the Yankees were facing a must win game and my choices to start were Sabathia or Michael Pineda, I’d go with Sabathia. Don’t know about you. Sabathia reinvented himself as a cutter pitcher this summer and had his best season since 2012. I’m hopeful the new approach will allow him to remain effective at least one more year. Given his age and all those innings on his arm though, you never really know.

Tanaka wants to pitch in WBC

Even after pitching in the 2009 and 2013 events, Masahiro Tanaka would like to pitch in the World Baseball Classic next spring, he told the Japan Times. “There’s been no development (in my roster status), but of course I have the motivation (to play),” he said. Tanaka threw 9.1 innings across one start and seven relief appearances in the 2009 and 2013 WBCs. He won the title with Japan in 2009.

Japan nor any other team has released their final 2017 WBC roster. Those aren’t due until January. Interestingly enough, Japan did not take any MLB players in the 2013 WBC. Not even Ichiro. It was all NPB players. It’s unclear if that’s a new policy or just a one-time blip. They did use MLB players in the 2006 and 2009 WBCs. If Tanaka wants to pitch, the Yankees can’t stop him. I don’t like the idea of him throwing intense innings in March any more than you do. Blah. Tanaka is one of several Yankees who could wind up playing in the WBC.

Otani hopes to come to MLB next offseason

According to the Japan Times, Nippon Ham Fighters ace Shohei Otani has told the team he wants to be posted next offseason. He signed a new one-year contract with the (Ham) Fighters over the weekend, ensuring he won’t be posted this winter, but next winter is apparently his target. “I know that the club will respect my will whenever I decide I want to go (to MLB). It is pleasing to get that support and I’m thankful for it,” said Otani.

Otani, who has been working out with Tanaka this offseason, is the best player in the world not under contract with an MLB team. You could argue he’s the best hitter and pitcher not in MLB. Otani will turn 23 in July, meaning he will be subject to the international hard cap put in place by the new Collective Bargaining Agreement. My guess is MLB and the MLBPA will agree to make Otani exempt from the hard cap. Either that, or he’s going to come over when his earning potential is severely limited.

CBA Details: Disabled List, All-Star Game, Luxury Tax, Free Agent Compensation, More

MLBPA chief Tony Clark. (Boston Globe)
MLBPA chief Tony Clark. (Boston Globe)

Last night MLB and the MLBPA agreed to a brand new Collective Bargaining Agreement, meaning teams can finally move forward with their offseason plans. More and more details about the CBA are starting to trickle in, so let’s round ’em all up and analyze. This all comes via Ronald Blum, Ken Rosenthal, Stephen Hawkins, Jon Morosi, Jon Heyman, and Joel Sherman.

Disabled list reduced to 10 days

The 15-day DL is now the 10-day DL. The 7-day DL for concussions and 60-day DL are unchanged. The new 10-day DL means we’ll see fewer teams play shorthanded going forward, which is something the Yankees (and especially the Mets) have done from time to time. We also might see an uptick in “phantom” DL stints. Got a young starter who needs his workload kept in check? Stick him on the 10-day DL with an upset tummy and let him skip a start without playing shorthanded.

All-Star Game no longer tied to World Series

Thankfully, the All-Star Game will no longer determine homefield advantage in the World Series. It’ll instead go to the pennant-winning team with the better regular season record. Hooray for common sense. That’s still not a perfect solution because of unbalanced schedules and all that, but it’s the best possible solution, I think. Certainly better than alternating leagues each year or tying it to the damn All-Star Game.

Rather than homefield advantage in the World Series, players will instead play for a pool of money in the All-Star Game. That’s a pretty good way to get them motivated. No idea what that pool will be, but I hope it’s substantial. Like $1M per player on the winning team. Something like that. Want guys to play hard in the All-Star Game? Putting a million bucks on the table is a good way to do it.

Luxury tax details

The complete details about the luxury tax system … ahem, the competitive balance tax system … are now available. The thresholds the next five years are as reported yesterday: $195M in 2017, then $197M, $206M, $209M, and $210M in subsequent years. Here are the tax brackets:

  • First time offenders: 20% (up from 17.5%)
  • Second time offenders: 30% (remains the same)
  • Third time offenders: 50% (up from 40%)
  • $20M to $40M over threshold: 12% surtax
  • $40M+ over threshold (first time offenders): 42.5% surtax and first round pick moves back ten spots
  • $40M+ over threshold (repeat offender): 45% surtax and first round pick moves back ten spots

So a team over the luxury tax threshold three straight years and at least $40M over the last two years would be taxed at 95% (50% plus 45% surtax). It’s not a hard salary cap but it might as well be. That’s a major deterrent. Come 2019, when the tax threshold is $209M, the “soft” cap will essentially be $249M. Anything over that results in a 62.5% tax for first time offenders.

Also, those tax rates will be phased in next season. Apparently MLB is treating 2017 as something of a transition year for teams at or over the threshold. That doesn’t matter for the Yankees. They’ve been over the luxury tax threshold ever since the system was put in place, so they’re getting hit with a 50% tax right off the bat, plus whatever surtax applies depending on their payroll. My guess is they’re less than $20M over the threshold in 2017, so no surtax.

Free agent compensation and qualifying offer details

The qualifying offer itself remains relatively unchanged. It’s still a one-year contract set at the average of the top 125 salaries in baseball, and the player must be with the team the entire season to be eligible for it. There are two changes to the qualifying offer: players can only receive it once in their careers, and now they have ten days to accept or reject the offer rather than seven.

The free agent compensation rules are a bit convoluted now. Here’s how it works:

  • Signing team receives revenue sharing money: Forfeits their third highest draft pick. Keep in mind this is not necessarily their third rounder.
  • Signing team paid luxury tax during most recent season: Forfeits second and fifth highest draft picks, plus $1M in international bonus money.
  • All other teams: Forfeit second highest draft pick plus $500,000 in international bonus money.

Got all that? The Yankees are going to be paying revenue sharing always and forever, so the first bullet point doesn’t apply to them. Once they get under the luxury tax threshold, they’ll only have to give up their second highest pick plus $500,000 in international money to sign a qualifying free agent. I doubt that’s enough to scare them away from top free agents. It shouldn’t be, anyway. Now here are the rules for the team that loses a qualified free agent:

  • Players signs deal worth $50M+: Former team gets a compensation pick after the first round.
  • Players signs deal worth less than $50M: Former team gets compensation pick after Competitive Balance Round B, which is before the third round.
  • Former team pays luxury tax: The compensation pick is after the fourth round regardless of contract size.

This basically means older players like Carlos Beltran will never get the qualifying offer, ditto good but not great relievers. Those guys never sign deals worth $50M+, and the risk of them accepting the qualifying offer is not worth the reward of essentially a third round pick. This system should also eliminate free agents getting hung out to dry like Ian Desmond last year. That’s good for the union.

International free agency

As you know, there is now a hard cap on international spending, which is just awful. That was one of the last places the Yankees could really flex their financial muscle. The spending cap next year will be $4.75M for large market teams like the Yankees, $5.25M for mid-market teams, and $5.75M for small market teams. Well, I guess assigning the bonus limit by market size is better than using regular season record. The hard cap still sucks.

Because a hard cap isn’t enough, international players will now be exempt from the hard cap at age 25, not 23. They pushed it back two years. Jeff Passan confirmed with a team official that this applies to Shohei Otani, who is only 22. Rather than be posted next offseason, as expected, he has to wait until 2019 (!) to come over and not be eligible for the hard cap. So dumb. So, so dumb. Hopefully MLB comes to their senses and makes an exception for him (and other similar players). MLB and the MLBPA should want dudes like Otani playing their game.

(Aside: I wonder whether the hard cap will push some international free agents to play overseas for a few years, where they can make more money, then come over to MLB once they turn 25. Seems like a possible unintended consequence.)

Minimum salary

Reports indicated the minimum salary would increase substantially with the new CBA, and, well, that didn’t happen. The league minimum will rise from $507,500 in 2016 to $535,000 in 2017. That’s a 5.4% increase in year one of the CBA. The last two CBAs had a 16% increase in year one. Womp womp. The minimum salary will increase to $545,000 in 2018 and $555,000 in 2019. The players get cost of living increases in 2020 and 2021. Woof. Swing and a miss, MLBPA. Swing and a miss.

Miscellany

Here are some other miscellaneous details from the new CBA.

  • Players no longer accrue service time while serving drug suspensions. In the past players accrued service time during drug suspensions, but not suspensions under the domestic violence policy.
  • MLB will play regular season games outside the United States and Canada  as early as 2018. London and Mexico are the leading candidates. MLB has played regular season games in Asia and Australia in the past.
  • Roster limits remain the same. Teams will have a 25-man roster from Opening Day through August 31st, then from September 1st onward they can carry up to 40 players. Hooray for that.
  • The Performance Factor of the revenue sharing system has been eliminated. That is going to save the Yankees a boatload of money behind the scenes. Wendy Thurm explained the system a few years ago.
  • Chewing tobacco is banned for new players. Current players are grandfathered in and can still use it. Kinda silly, but whatever.

So, from the looks of things, the owners scored big wins with the luxury tax system, international free agency, and the minimum salary. The players get more lenient draft pick compensation rules and also a shorter disabled list, which means more call-ups through the season. They’ll also benefit from the international hard cap because it ostensibly means less money for amateurs and more money for big leaguers. I dunno, seems like the owners got the best of the players with this one.