Yu Darvish and the Perils of Japanese Baseball's Posting System

With the two sides unable to come to terms, Iwakuma became the first successfully posted player to not sign with a major league team that won negotiating rights.

The stakes are much higher this time. Darvish's stateside arrival has been anticipated for years. Yet a similar situation from last year may occur, especially if it is indeed a record-setting bid. In the Athletics' negotiations with Iwakuma, the club figured the posting fee into their offer. That was the stance used by the Boston Red Sox during talks with agent Scott Boras over Daisuke Matsuzaka's compensation in 2006. The two sides eventually came to terms on a six-year, $52 million contract just one day before the deadline. But it's clear that some clubs view the posting fee as part of the total package while agents view the player's contract as an entirely separate matter since they believe the posting fee deflates their client's salary.

While every team negotiates differently, there is concern on the account of Darvish's father, Farsad, that a high bid will hamper his son's contract.

"If the bid amount is too high, it's going to influence contract negotiations," he said last week in an interview with Japan's Sports Nippon newspaper. "It will worry me if it's over $40 million."

The latest reports indicate that the anonymous bid may have surpassed the record $51.1 million the Red Sox paid to the Seibu Lions for rights to negotiate with Matsuzaka.

Darvish is reportedly looking for a contract similar to around the $20 million that U.S. star pitchers earn, according to Sports Nippon. Combined with the posting fee, the total package could easily surpass the $100 million mark.

The rumored front-runner isn't known as a big spender. While the Toronto Sun quotes an anonymous Blue Jay executive who said Darvish should be signed at any cost, the club ranked 23rd in the in team payroll this past season.

Meanwhile, the front office has remained mum about Darvish. Could it be that the Blue Jays bid in a show of gamesmanship? Or is the club seizing the moment as a springboard to bolster a burgeoning pitching staff en route to becoming a competitor in the tough American League East? Nobody knows. The owner, Rogers Communications, certainly has the financial resources to do so.

Yet MLB clubs are viewing the performances of Matsuzaka and the Yankees Kei Igawa as cautionary tales. Igawa spent most of his tenure with the club in the minors even though the Yankees spent a combined $46 million on his contract and posting fee.

Teams may not be willing to commit a multi-year deal or high salary. Without other teams to negotiate, players don't have much leverage to field counter-offers.

As a result, Nomura has become one of the system's most vocal critics; others in Japan are following suit. Following the failure of Iwakuma's deal, the Japanese player's union and the Rakuten Eagles lobbied to change the system by prosing a rule to allow negotiations for the top three bidders. In May, the NPB considered approaching the MLB about reforming the system but nixed the idea due to complicated logistics and the fact that many of the Japanese clubs can still generate revenue for a departing player. 

In the U.S., the MLB and the player's union announced the formation of an International Talent Committee last week to evaluate global transactions, which includes the posting system.

There won't be any changes this off-season but a major test of the system's viability is just underway. Darvish may be in a MLB uniform come spring or he will remain in Japan for another year. He won't be a free agent until 2014. But for Nomura, the rules created in response to his ability to provide contract flexibility to Japan-based players is now his biggest foe. Will he play by the rules or challenge the system once again? We'll soon find out. 

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Akito Yoshikane is a freelance writer based in Chicago.

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