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

The only way for Japan's best pitcher to play in the U.S. is through a costly, complicated negotiation process. Will it work this time?



Plenty of big-time baseball players like Prince Fielder, Jose Reyes, and Albert Pujols have been or are still on the market this off-season. But no one has had teams and fans frothing at the mouth more than Yu Darvish. Bids for American major league baseball clubs to negotiate exclusively with the star Japanese pitcher concluded last week, and now fans are waiting to see where—if anywhere—he'll end up.

Baseball scribes have tracked the minutiae of Darvish's potential move from Japan to the U.S. for months. Even a picture of Texas Rangers general manager Jon Daniels scouting him in Japan this summer was enough to generate news.

The 6-foot-5 son of an Iranian father and Japanese mother has dominated hitters in Japan with surgical control and an arsenal of seven pitches. So much so that he's projected as a front-end starter in the majors and even earned comparisons to Pedro Martinez.

"I also heard he once defeated Godzilla with one arm tied behind his back. Well, not really, but that's the way his myth is starting to be built by the breathless coverage," wrote Toronto Sun columnist Raju Mudhar.

Darvish's agent Don Nomura tweeted Monday that an announcement by his client's club will be made tomorrow morning Japan time, which means the bid winner could be revealed as early as Monday evening in the U.S. Multiple teams have submitted bids, and the Toronto Blue Jays are rumored to be the front-runners. Darvish's team, the Nippon Ham Fighters, has until Tuesday 5 p.m Eastern to decide whether to accept the bid. Doing so would reveal the winning team and allow Darvish's camp to negotiate a deal within the posting rule's 30-day window.

Can the two sides come to an agreement under the widely derided posting system?

Maybe not. Darvish's agent Nomura is no stranger to challenging the rules of U.S.-Japanese baseball relations. What's more, agents are criticizing the restrictive rules because of their limited bargaining power. And some major league clubs, burned by high salaries on an underperforming investment, are more cautious than ever to commit large sums to Japanese players who have yet to set foot in an American ballpark.

None of that bodes well for the 25-year-old Darvish, despite his ascension as one of the most coveted pitchers this off-season. Nomura, together with Arn Tellem, will represent the two-time Pacific League MVP, who has a 93-38 career record and 1.99 ERA over seven seasons in the Nippon Professional Baseball league.

But if last year's failed negotiations with the second-best pitcher in Japan (only to Darvish) and the Oakland Athletics are any indicator, it may be a difficult path.

The posting system was implemented in 1998 as a way for Japanese teams to receive compensation for players who have yet to become free agents but wish to sign with a major league team. It was adopted in part because Nomura found contract loopholes that allowed clients like Hideo Nomo and Alfonso Soriano to enter the majors by "retiring" from the NPB. And he continued to incense Japanese officials by arranging Hideki Irabu's transfer from the Chiba Lotte Marines to the New York Yankees instead of the San Diego Padres.

Players who had less than nine years of professional experience in Japan, like Ichiro Suzuki, Kei Igawa, and Matsuzaka, have come to the states through the system. But the system came under increased scrutiny in Japan last year when talks between Nomura's client Hisashi Iwakuma and the Athletics quickly degenerated. Oakland won negotiating rights after paying a $19.1 million posting fee to the right-hander's Tohoku Rakuten Golden Eagles. But the two sides were far apart in their expectations for what Iwakuma's salary should be. Nomura said the Athletics didn't budge from an initial offer of 4 years, $15.25 million. Iwakuma, an All-Star pitcher who won the 2008 Eiji Sawamura award - Japan's equivalent of the Cy Young - was slighted by the take-it-or-leave it offer. His agent said the Athletics' negotiations were "insincere," leading many in the Japanese media to speculate that Oakland made a bid to block rivals from signing Iwakuma.

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.