Details of the Yankees’ contract agreement with Masahiro Tanaka

It was his destiny.
It was his destiny. (source)

After weeks and months of waiting, the Yankees finally got their man. The team agreed to a seven-year contract worth $155M with right-hander Masahiro Tanaka on Wednesday morning, a deal that includes an opt-out after the fourth year. Add in the $20M release fee the team must pay the Rakuten Golden Eagles and the total investment is potentially $175M. The release fee will be paid out in installments.

Pretty much everything we know about Tanaka the pitcher is in this post. Now that he’s come to an agreement, some details about the contract itself and the Yankees’ pursuit have come to light. Here’s a roundup, courtesy of Joel Sherman, Ken Rosenthal, Buster Olney, Dan Barbarisi, Ronald Blum, Jeff PassanBryan Hoch, Jon Heyman, and Anthony McCarron.

Pursuing Tanaka
The Yankees sent an eight-person crew to Los Angeles to meet with Tanaka face-to-face a few weeks ago, when he was essentially interviewing teams. Those eight people: team president Randy Levine, GM Brian Cashman, assistant GMs Jean Afterman and Billy Eppler, manager Joe Girardi, pitching coach Larry Rothschild, player development staffer Trey Hillman, and translator George Rose. Hillman just rejoined the organization and spent four years managing in Japan not too long ago. Hideki Matsui made a recruiting call at some point as well.

After listening to each team’s pitch and mulling over the offers, the two sides haggled a bit and Tanaka’s camp informed the Yankees they had to offer the seventh year to get a deal done, so they did. He may have turned down more money from another team, reportedly. I’m guessing the Cubs were the top bidder if another team did make a better offer, but that’s just a guess. The Yankees were informed Tanaka accepted their offer at 1am ET this morning, 3pm local time in Japan. I guess all the reporters were sleeping because the news didn’t break for another nine hours or so.

Hal Speaks
“I have been saying for well over a year now that it makes sense to meet [the $189 million threshold], but not at the expense of a championship-caliber team,” said Hal Steinbrenner following the signing. “I felt we needed another starter. We were not where we needed to be, in my opinion. So this should not be a surprise because [Tanaka] was the best free-agent pitcher available. He is one of the greatest players Japan has ever produced. He is tough. He has thrived under pressure. He will fit in well to New York.

“Market value is what one or more teams are willing to pay today. He is one of the best players Japan has produced and he has played well on the big stage in big games. I think he will be great for our organization and will do very, very well. But, honestly, I don’t feel that [we’d spend whatever it takes] for any player, as we showed earlier this offseason [with Robinson Cano]. That is not good for the family, our partners or the organization. There was a limit of what we were willing to do, but, yes, I felt it was important to get him.”

Hank Speaks
“We’re going to do what we’ve got to do to win. We had to make sure we had enough pitching to go together with our new lineup,” said Hank Steinbrenner following the signing. “There has been criticism of myself and my brother the last couple years that, gee, if our dad was still in charge, we’d be spending this and spending that and doing whatever it takes to win. He didn’t have revenue sharing, at least for most of his time. That’s what these people in the sports media don’t seem to get. If it wasn’t for revenue sharing, we’d have a payroll of $300M a year if we wanted to. So we’re doing this despite having to pay all that revenue sharing.”

No Physical
The Yankees will not have Tanaka take a second physical. He was examined by Dr. Neal ElAttrache when he was in Los Angeles a few weeks ago as a way to facilitate the process, so the team reviewed the test results and are comfortable with them. It’s exactly what they did with Hiroki Kuroda two years ago. ElAttrache is the Dodgers’ team doctor who also consults for NFL, NBA, and NHL teams as well as PGA golfers. He’s not some quack like Dr. Nick. It’s surprising the Yankees aren’t having their doctors look at Tanaka but it’s not like they’re signing him sight unseen either.

Contract Details
The contract is very straight forward: Tanaka will earn $22M in each of the first six years and $23M in the seventh year. The average annual value is $22.14M for luxury tax purposes. Agent Casey Close insisted on the opt-out clause, which is the new trend in baseball. Close also secured opt-outs for Zack Greinke and Clayton Kershaw recently, plus the Yankees gave one to CC Sabathia a few years ago. A.J. Burnett opted out of his contract with the Blue Jays before signing with New York. They’re the cost of doing business these days.

Tanaka just turned 25 in November, so the four guaranteed years of his contract will cover his age 25-28 seasons. That’s really awesome, those should be his best years, at least in theory. The opt-out allows Tanaka to test free agency at age 29, when he could land another huge payday. That second contract, the one he signs at 29, will be the real scary one. We can consider this a four-year, $88M deal with a three-year, $67M player option for all intents and purposes, but there is some luxury tax calculation difference between an opt-out and a player option. It’s complicated.

The Yankees are going to have to make a 40-man roster move to accommodate Tanaka sometime before 5pm ET on Friday. He has to physically sign the contract by the deadline. David Huff seems most likely to get the roster axe but Ramon Flores is another option. The team could also work out a small trade to clear a spot. Either way, it’ll have to be done relatively soon.

Perks!
These deals always contain some fun perks. In addition to the huge salary, Tanaka also receives a $35k moving allowance, a $100k annual housing allowance to be used in New York or near the team’s Spring Training complex in Tampa, and $85k to hire an interpreter of his choice. The Yankees are also giving him four first class round trip plane tickets from New York and Japan. Oh, and he gets a full no-trade clause.

Historical Perspective
In terms of total dollars, the $155M guarantee is fifth largest pitching contract in history, behind Kershaw ($215M), Justin Verlander ($180M), Felix Hernandez ($175M), and CC Sabathia ($161M). It is the ninth largest pitching contract in history in terms of average annual value, behind Kershaw ($30.7M), Verlander ($25.7M), Felix ($25M), Greinke ($24.5M), Sabathia ($24.4M), Cole Hamels and Cliff Lee (both $24M), and Johan Santana ($22.9M). It is the 18th largest contract in baseball history overall and by frickin’ far the largest ever given to an international player. The six-year, $68M deal the White Sox gave Jose Abreu earlier this winter was the previous record.

After seeing ratings and attendance (and revenue) plummet last year, the Yankees went all-out this winter to improve their team. They still have holes, yes, but they’re also much improved. Tanaka was their top pitching target all along and now he’s in pinstripes.

Yankees to sign Masahiro Tanaka

The Yankees have reportedly won the Masahiro Tanaka sweepstakes. Ken Rosenthal reports that they have agreed to a seven-year, $155 million contract, with an opt-out after 2017. Counting the $20 million posting fee, that amounts to seven years and $175 million, or precisely what they were offering Robinson Cano earlier this off-season.

Mike already told you everything there is to know about Tanaka, so now seems like as good a time as any for a refresher. NPB Tracker also has a nice breakdown of Tanaka’s pitch data and game logs from the past few years, though it does not include 2013 data.

The new posting system, combined with the Yankees’ desperate need for another starting pitcher, created this situation. In the past the Yankees might have bid $75 million and worked out a $50 or $60 million contract. Just yesterday Joel Sherman wondered if the Yankees’ financial advantages might not be the same as in the past: “And is it possible there are organizations beyond the Dodgers ready to do the monetary staredown with the Yanks?” Apparently not.

The Yankees have now spent $474 million this off-season, and they might not be done. Now that they’re over the luxury cap, they can continue flexing their muscles by spending money to fill the current roster holes. The next few weeks could get interesting.

Nikkan Sports: Yankees made formal offer to Masahiro Tanaka

Via Nikkan Sports (translated article): The Yankees were one of several teams to submit a formal offer to Masahiro Tanaka by Thursday, which apparently was Tanaka’s self-imposed deadline for offers. He has until 5pm ET on Friday to sign. Guess he wanted a few days to mull things over.

The Dodgers, Diamondbacks, White Sox, and Cubs also made offers according to Nikkan Sports, and all of the offers were worth more than $100M across six years. Reports out of Japan have been very sketchy throughout this entire process — at one point they said Tanaka would not be posted at all — so take this with a huge grain of salt. This whole thing will be over within six days, one way or another.

Yanks keeping expectations low, but they absolutely need Tanaka

Pretty sure we've used all the Tanaka images in the Getty archives (Koji Watanabe/Getty)
Pretty sure we’ve used all the Tanaka images in the Getty archives (Koji Watanabe/Getty)

“I believe we need another starter.”

Yankees fans know this, but it still felt good to hear it from ownership. Had the Yankees planned to pick from scrapheap options, Hal Steinbrenner might have said something else. I think our young guys are up to the task, he might have said. Instead he came right out and acknowledged the need for another starter.

By “another starter,” Steinbrenner does not necessarily refer to Tanaka. He could refer to Paul Maholm, Joe Saunders, or even Johan Santana: low-cost guys who could provide the team a few alternatives to in-house candidates.

But after hearing such a proclamation from the owner himself, are fans really going to accept one of those retreads? Chances are fans wouldn’t accept one of those retreads even absent Steinbrenner’s statement. We’ll be even less accepting given his overt praise of Tanaka. “This is a great, young pitcher. I’m sure he’ll come here and do great things with someone.”

So do whatever it takes to sign him.

It is absolutely clear to everyone, from the casual fan who tuned out after the Beltran signing to ownership itself, that the current crop of starters won’t get the Yankees through the 2014 season. Supplementing that crew with a few back-end, at best, pitchers and minor league signings will not change the scenario much. They need Tanaka, Jimenez, Garza, or (shudders) Santana.

Perhaps Steinbrenner is just trying to keep expectations low with his “we’ll see what happens.” It certainly seems as though at least one Yankees official is trying to tamp expectations: “Just because he had great success over there doesn’t mean he’s going to be lights out here. We’ll find out soon enough, but it’s not like he’s a sure-fire thing. I’d like to think so, but I’m not convinced.”

There is a certain necessity in keeping expectations low. Many teams remain interested in Tanaka, so the Yankees are anything but guaranteed to sign him. They’d clearly like to, and if forced to interpret Steinbrenner’s remarks I’d say that they’ll go pretty far in their efforts to obtain his services. But if a team like the Cubs blows them out of the water, they need to cover themselves. And so we get Steinbrenner hedging a bit, and we get anonymous officials trying to lower the bar.

Don’t let this game of expectations confuse the reality, though. The Yankees absolutely need Tanaka. If they don’t land him, they’re almost forced to try for one of the remaining trio. Anything else would, put a serious damper on an otherwise solid off-season, as a rival official said.

“If you don’t get Tanaka, it kind of nullifies some of what you’ve added to the offense.”

Marcus: Yankees aren’t making any moves until Tanaka signs

Via Steven Marcus: The Yankees are not planning to make any additions to the big league roster until the Masahiro Tanaka situation plays out. His signing deadline is 5pm ET next Friday, so only nine days away. “We are doing nothing until Tanaka resolves,” said a team official to Marcus.

From the looks of things, pretty much every team is waiting for Tanaka to sign before moving forward with their offseason, especially on the pitching side of things. Once Tanaka signs, guys like Ubaldo Jimenez, Matt Garza, and Ervin Santana will start to come off the board and things will heat back up. As Joe explained earlier, the Dodgers are preoccupied with Clayton Kershaw’s extension and now is the time for the Yankees to make a major push for Tanaka. Once that is done, bullpen and infield help become the top priority.

The time to strike on Tanaka is now

(Koji Watanabe/Getty Images AsiaPac)
(Koji Watanabe/Getty Images AsiaPac)

Just nine days remain in the Masahiro Tanaka sweepstakes. Chances are we’ll know the winner even before that, since nine days is the deadline by which he must sign on the dotted line. He could come to an agreement within a week.

Speculation has run rampant, but we’ve had little in the way of actual reports about Tanaka. It seems as though his agent, Casey Close, has done a good job of preventing leaks from MLB teams. A few “reports out of Japan” have circulated, but since the original “reports out of Japan” indicated Tanaka wouldn’t be posted at all, it’s easy enough to dismiss those.

It does seem as though most media outlets agree that the Yankees and the Dodgers hold the best shots of signing Tanaka. Early in the process the Mariners looked like a good bet, and the Diamondbacks continue to linger. But right now, it would be a surprise to see him sign anywhere in between the two coasts.

At this moment the Yankees could be in an advantageous position. Ken Rosenthal reported this morning that the Dodgers attention is now on their own ace, Clayton Kershaw. With arbitration figures due on Friday, the Dodgers are eager to lock up Kershaw, likely to a record deal.

This situation could present the Yankees with an opportunity: make Tanaka an offer in mold of the one they made CC Sabathia in 2008. No, it shouldn’t be six years and $140 million, but it should certainly be a bold and aggressive offer, one Tanaka would have trouble rejecting. It shouldn’t be their best offer, either; as we saw with Sabahtia, there has to be at least a little upward flexibility.

Given that Tanaka has nine days to sign, regardless of an offer, he could simply defer a decision until after the Kershaw situation becomes clearer. But that shouldn’t stop the Yankees from stepping in and making an aggressive move while the opposition focuses elsewhere. Strike now.

The Latest on Masahiro Tanaka

(Koji Watanabe/Getty)
(Koji Watanabe/Getty)

Today is the halfway point of Masahiro Tanaka‘s 30-day negotiating window. He has 15 days left to work out a contract before the 5pm ET deadline on January 24th, and the entire deal must be complete by that time. Tanaka needs to pass a physical and sign on the dotted line by then. There won’t be any of this “agree to a deal and three weeks later it’s official” nonsense. Only 15 days until he is on some team’s roster. Love the hard deadline.

Anyway, we know the Yankees have already contacted with Tanaka’s agent Casey Close, but there haven’t been any real updates since. That doesn’t mean talks have stalled or anything like that, just that no updates have leaked. The whole process has been very tight-lipped, it seems. I’m guessing that’s by design. Here are some Tanaka-related notes from around the league in what I suspect is the first of many update posts:

  • Tanaka flew to the Los Angeles yesterday to begin face-to-face meetings with teams. He is slated to meet with the Yankees, Diamondbacks, Cubs, White Sox, Dodgers, and Angels this week and he will also be seen by a doctor to get the physical process going. [David Waldstein, Bill Plunkett & Jon Heyman]
  • D’Backs GM Kevin Towers said Close “pretty much asked those clubs that are involved that just less is better and not to really say anything or divulge the process or what’s happening.” That explains the lack of updates. [Steve Gilbert]
  • Dodgers GM Ned Colletti confirmed he has touched base with Tanaka’s camp but the two sides are in the “feeling out” stage. Negotiations with various clubs are “still in a very preliminary phase” and things might not heat up until next week. [Dylan Hernandez & Andy Martino]
  • If you missed it earlier this week, here is our massive Scouting The Market post on Tanaka. Pretty much everything you need to know about the guy is in there.