Paving the Way for a Domestic Posting System

Yesterday, Major League Baseball officially announced their new agreement with Nippon Professional Baseball regarding the transfer of players from Japan to the U.S. The most prominent change in the rules is the $20 million maximum fee that NPB teams will receive, and this is the aspect of the rules that has drawn the most attention. However, there is another significant change to the rules that is worth looking at, especially because of its potential long term ramifications on domestic players already under contract to MLB teams.

Under the old posting system, the move of a player from Japan to MLB was somewhat akin to a trade, only with MLB teams using cash instead of players as the currency to acquire the player’s rights. The system wasn’t that different from what we see in minor trades between MLB teams, where a player’s rights are transferred from one club to another in exchange for a small cash payment. In the last year, players such as Chris Nelson, Mike Carp, Casper Wells, and Travis Blackley have all been traded for cash, as their rights were sold from one team to another in exchange for monetary compensation. The posting system was basically just this kind of trade, only magnified, because the players getting posted were usually quite good.

The new system isn’t really like that at all. In fact, MLB isn’t even calling the payment to NPB teams a “posting fee” anymore; it is now a “release fee”, but a more simple description of it would just be a sales tax. No longer are teams buying exclusive rights to a player, as the agreement essentially allows posted players to become free agents, negotiating with any team who agrees to pay the release fee if he signs a contract with them. Because the release fee is only due after a player signs his contract, there is no actual barrier to gaining negotiating rights with the player, and the expectation should be that every team with even passing interest in acquiring talent will agree to the release fee for pretty much every player posted. There’s no cost to gaining those rights, so it should be expected that a posted player will be able to negotiate with any team he wants.

In reality, the posting system will function for MLB teams like a sales tax does for regular consumers. Just like we are all free to go into a store and shop around, MLB teams will be able to shop for posted Japanese players knowing that the final bill will just include a $20 million tax (or less, for non-impact talent) on the purchase price. No longer are teams really buying anything with that fee, since it doesn’t grant them any real privileges that other teams don’t have access to. Instead of it mimicking a minor trade, the system now just looks like free agency, only with an extra fee tacked on at the end.

Whether this system is better or worse for MLB teams remains to be seen; it is clearly better for the player and worse for NPB teams, but I don’t think we know yet how this will affect MLB teams and the total cost of acquiring a posted player. Even without knowing exactly how this will play out on the U.S. side, however, I think this system is interesting because it could theoretically work here as a domestic transfer system as well.

For instance, let’s just say you are the GM of a small market team, and your annual payroll can’t really exceed $65 million or so. You control the rights to a Cy Young caliber pitcher for two more seasons, but he’s getting pricey enough that he’s going to eat up a large chunk of your budget, and you have to trade him before he reaches free agency because you can’t afford the long term contract he’s going to demand. There are a lot of teams interested in giving you a boatload of young talent in exchange for this pitcher, but you want to win in 2014, and most of the players being offered in return are better future pieces than present pieces.

What if Andrew Friedman could, in lieu of trading David Price, make him a free agent two years early in exchange for a sizeable “release fee”? Price would certainly welcome the chance to negotiate a new long term contract with every interested team immediately, rather than only being able to talk to the team who trades for his rights. Big market clubs flush with cash but light on the kind of talent that the Rays are demanding would get involved, and the demand for Price would likely increase, potentially creating a system where the Rays get more of a return in monetary value for their ace than they could by trading him for players under team control.

Back in November, Theo Epstein was quoted as saying:

“We wish there was a free-agent market for young players.”

In talking about a potential pursuit of Masahiro Tanaka, Jed Hoyer told ESPN Chicago:

“It’s rare these days,” Hoyer said in November. “They (Japanese players) get posted at an age that is younger than the typical American free agent.”

The Cubs aren’t interested in parting with their best young prospects, so they’re an unlikely landing spot for David Price this winter. However, if the Rays could post David Price, they might well be the favorites, and their interest in Price would be good for the Rays. Would the Cubs, or another deep pocketed team that prefers to hoard its young talent, pay the Rays $50 million in cash, payable right now, if they could sign David Price for 6/$125M? I think it’s at least possible, and it’s also possible that the Rays would be better off in the short term with $50 million in cash to reinvest in their 2014 roster than they would be with a collection of prospects.

One of the trends we’ve seen in baseball over the last few years is long term contracts for players several years from free agency, as teams are more anxious to lock up the best years of a player’s career rather than wait for them to reach free agency and then pay for a short peak period and a long decline phase. Because of this trend, you don’t have that many guys reaching free agency in their 20s anymore. This year, Jarrod Saltlamacchia was the youngest notable free agent, and he’s heading into his age-29 season as a catcher. Pretty much every other free agent was already in their 30s, or will be by next summer. People talk about this as a weak free agent class, but really, it’s an old free agent class.

If MLB allowed teams to post their young players, creating a free agent market for players still in their mid-20s, demand would be intense. I think it’s fair to say that the demand for posted young players would far outstrip demand for aging free agents, as we’ve seen that Masahiro Tanaka’s questionable availability has essentially brought the free agent market for starting pitching to a halt. Teams prefer Tanaka not only because he’s probably better than the best available free agent starters, but because he’s five years younger than them too.

Maybe the Rays would rather have the young players than the cash. I don’t think a domestic system would have to replace player-for-player trades, but could perhaps be an alternative option. Perhaps a team could explore the trade market for a player, and then, if they can’t find a suitable trade that brings them the kind of talent they’re looking for, could simply post him instead, and let the market tell them exactly what kind of value the player has. Even just having the leverage to go that direction could potentially raise the price of talent a team could extract when trading a star level player.

There would definitely be some logistical hurdles that would have to be cleared, and it would only make sense for MLB teams if the maximum release fee either did not apply or was significantly higher than the release fee that was negotiated with NPB teams. Certainly, MLB shouldn’t want teams simply auctioning off their best players without reinvesting that cash into their franchise, so there would have to be mechanisms in place to prevent owners from simply using a domestic posting process to profit from selling off their best players and putting terrible teams on the field.

But, this is basically how players change teams in soccer, with large cash payments going from one team to another. Buying players with cash is widely accepted as the primary way of improving a team’s roster in the world’s most popular sport. Now, MLB has essentially adopted a system that creates a free agent market for young talent from Japan. Perhaps this is just the first step towards creating a similar system for players already in the United States.




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Dave is a co-founder of USSMariner.com and contributes to the Wall Street Journal.

78 Responses to “Paving the Way for a Domestic Posting System”

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  1. Jeffrey Loria says:

    I like the way you think, Dave Cameron.

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    • nada says:

      and Jeffrey Loria is exactly why this system would be terrible for fans. What to do when a billionaire team owner wants to buy a private island, but is short a few tens of millions? No problem, just sell their best young MLB talent and tell the fans that the money will be “reinvested”.

      Perhaps I’m just being too cynical, and I know Dave addressed this in passing, but I could foresee legal wrangling and loopholes and problems defining “reinvestment” galore. Ultimately, some billionaire would figure out a way to make a huge amount of money from this, fans and teams be damned.

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      • Dave Cameron says:

        You could mostly avoid this by only allowing players with a minimum level of service time (maybe 4+ years) to be posted. Low revenue teams are already trading players when they’re two years or less from free agency anyway, so all it would really change was the team’s options in what they receive, players or cash.

        Tie that to a rule that says that a team posting a player cannot have a lower payroll in the following season than in the preceding season and you’ve mostly made the Major League style sell-off impossible.

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        • Tim A says:

          I think this would need to be only available in the offseason, since the clubs financial situation will be more important mid season. Ie the Yanks are in the hunt and just outbid all to buy talent.

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        • Dave Cameron says:

          Yes, certainly, posting a player would be limited to the off-season, like it is with Japanese players. You don’t want teams having a literal sell-off in-season.

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        • tkn says:

          What is the harm in allowing a team to sell players until the trade deadline?

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  2. CabreraDeath says:

    This is perhaps my favorite column from 2013; a year that included a lot of fantastic and informative articles.

    Well done, Dave.

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  3. MLB already has large cash transfers as part of trades, usually when a bad contract is involved (A-Rod, Vernon Wells, Prince Fielder, etc). The difference is that money is to cover contracts that are already committed. Still, conceptually it’s not that far away from trading good young players for cash. And anyway if I remember correctly Charlie Finley sold off a bunch of his players for cash in the 70′s.

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    • jdbolick says:

      Yup, which Bowie Kuhn vetoed in “the best interests of baseball.” That history is exactly why MLB would never create something like this. They spend a great deal of effort creating the perception of competitive balance and a domestic posting system would undermine that completely.

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  4. Cardinology says:

    Thanks for the article, Dave. I’d have no problem seeing some kind of system like this at play.

    Can you clarify what is preventing these type of transfers from happening now? Is there a formal rule against trading players for cash only or is MLB just discouraging such moves like they’re doing in preventing “sign and trades” to circumvent the loss of draft picks on players that declined the Qualifying Offer?

    I’m sure there’s something preventing it since we haven’t seen it happen yet, but I’m not sure I’ve ever heard why.

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    • Yinka Double Dare says:

      I think there’s something in the collective bargaining agreement or some other MLB rule that says that you can’t put more than X dollars in a deal without the Commissioner’s approval, and I believe it was instituted basically to prevent what Finley did back in the day, just flat-out selling players.

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    • Dave Cameron says:

      MLB has to approve any transfers of cash for more than $1 million, I believe, and yes, they’ve generally been against teams just outright selling players to other franchises.

      This would also be structurally different in that trading a player for cash only assigns the remaining contract to the team trading for him. This would essentially be the equivalent of releasing a player from his contract and making him a free agent. So, it’s not so much that teams would be paying cash for the last two years of David Price’s contract, but that they’d be paying cash for the right to sign Price to an entirely new contract.

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  5. Razor says:

    Didn’t baseball used to do it this way? Thinking of Connie Mack’s A’s and of course Babe Ruth.

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  6. Ed says:

    “Certainly, MLB shouldn’t want teams simply auctioning off their best players without reinvesting that cash into their franchise, so there would have to be mechanisms in place to prevent owners from simply using a domestic posting process to profit from selling off their best players and putting terrible teams on the field. ”

    Call it the Loria rule?

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  7. Damaso's Burnt Shirt says:

    Interesting idea. Would make for an annoying commercial though.

    “I have a soon to be free agent pitcher and I need cash now. Call 877 CASH NOW.”

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  8. Scruge says:

    I know this article isn’t really about the posting system agreed upon but I can’t help thinking that the deal would have been made a lot better if the $20 million posting fee had something like a 5% non refundable fee built in. So if 20 teams posted the $20 mil for Tanaka then one team would eventually get him and pay the full $20 mil but the other 19 teams would each pay $1 mil. That way the Japanese teams actually have some incentive to post stud players.

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    • Lakeside says:

      I totally agree, under the current system as Dave said every team will post $20 million on every player, since they don’t have to pay unless they sign the player.

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      • BIP says:

        That’s not how the new system works–that was just a rumor. The actual new system has no bidding whatsoever: the player’s Japanese team simply sets a fee of up to $20 million that the signing team has to pay.

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    • attgig says:

      I was thinking and about to post the same thing. Either that or, max 20 and in order to be able to talk with that player’s agent, you have to give $1-$2 mil to the club for the right to negotiate. That way, if the marlins bid 20 mil, but then realize that the yankees are bidding too, they can just withdraw and not pay anything.

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    • Dan says:

      Supposedly they will post players who want to be posted so as to remain an attractive free agent destination.

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    • jdbolick says:

      Japanese teams very rarely posted stud players under the old system, so the $20 million cap isn’t really the issue. Teams understandably don’t want to let talent leave, and especially when the unavoidable perception is that it reinforces your league’s inferiority. NPB doesn’t want to be a non-affiliated minor league. The only reason the posting system exists at all is to mollify players who want to play in the major leagues someday.

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  9. Kevin says:

    The only hang up with the European soccer model becomes player leverage vis-a-vis “unhappiness.” In Europe, players often (arguably too often) wrangle their way out of contracts to seek greener pastures, often at the behest and urging of their agents. It adds a lot of drama and bitterness to the process which really doesn’t benefit anyone really.

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    • Federico says:

      Just as Kevin said, supporting a small-market Italian football team is a real pain; even long-term winning dreams are non-existent.

      Leveraging their financial power so as to lure players out of their contracts, big-market teams like Barcelona, Real Madrid and, relatively speaking, smaller fishes in smaller national leagues are draining away the best players of any age from small-market teams.

      It is impossible to think about cycles “competing-rebuilding-competing”; there is no turnover of winning teams (I guess that the absence of playoffs for national leagues is at least partially responsible of this) and financial power is really the only thing deciding the final standings.

      I really hope nothing close to what you described ever happen to MLB.

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      • Simon says:

        While true, the reasons for this have much more to do with the way that money and talent are allocated in football than the fact that players can be traded for money. Things like revenue sharing, the luxury tax, the draft system and so forth go a long way to creating a playing field where everyone can compete some of the time.

        That said, this causes obvious issues with things like the luxury tax (do transfer fees count against it, and if not, you’ve instantly given significant power to teams like the Dodgers and Yankees who could choose to spend a lot more money but are deterred by the tax). It also weakens the importance of a farm, as teams like the Yankees are currently not seen as contenders for guys like Price, as they don’t have the prospects, but would always be able to compete financially.

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        • Federico says:

          You are perfectly right, I pictured the situation of soccer in an overly simplified way and I was thinking about using the transfer fee for the purposes of luxury tax as a way to limit its negative effects (or what I perceive as its negative effects).

          What you wrote at the end of your second paragraph, though, is very close to my point of view, as transfer fees, together with the possible leverage effect on salary expectations of players, would significantly hamper the chances of being able to compete of small market teams by weakening the importance of having a good farm system. If they have no certainty about their ability to control their homegrown players, the draft system becomes less relevant as a way to even the playing field, too.

          Summarizing my point of view, I have direct experience of a flawed system (having MANY huge flaws) and it is normal for me to compare it to the MLB system, which seems to work much better in giving everyone smart enough a chance to compete at some point in time.

          Not introducing a potential flaw, which would require other offsetting measures, seems to me the best way of preserving a delicate, yet apparently working, equilibrium.

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        • Simon says:

          Yeah, I think we broadly agree. I don’t think this would be a disaster, but it would certainly be of most benefit to big market teams, who don’t really need more help.

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  10. jruby says:

    I second all the comments above: this would be neat to see, especially in an era when it’s getting easier and easier to peg dollar amounts to certain things.

    One effect of a system like this could be to reward teams with good farm systems, in two ways: 1) if you post a guy that came up through your system, you’re turning that guy into certain value rather than prospects (though this might be a wash if you think you can train the prospects up). The real benefit would be this: every team would have to pay x dollars for the negotiation rights. If you’ve got a good farm system, this allows you to let go of something that’s worth the same to everyone (cash) and hold on to something you’ve already added value to beyond average (prospects, given your plus-development).

    Does this make sense?

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    • Sumner says:

      But if the effect is to continue to limit the quality of the free agent pool – by posting and resigning for the best years of the best players’ careers – then the money you gain from posting a player is never reinvested in the best players in the league. This system would serve to preemptively redistribute most of the best players to the teams with the money to pay for them.

      The exception would be the already- and increasingly-rare team that can compete with a roster staffed mostly by team-controlled players and, probably, a few players that team was able to lock up before free agency (e.g., Evan Longoria).

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  11. Lakeside says:

    Would the release use the same cap, a different cap or no cap in this idea? A cap would really damper things and limit the talent pool release.

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  12. attgig says:

    And i disagree with your article. I don’t think they should be able to post players.

    This could potentially create huge messes between club owners and GM’s trying to run the business. Imagine Jeff Wilpon needing some cash after Madoff, wanting to auction off Wheeler, Harvey, and Syndergaard so that he doesn’t go bankrupt, while Sandy’s plans are just laid to waste. (they can always invest that money in different ways into the club so that they can borrow more money from their assets vs the value of some farmhands/cheap rookies).

    I don’t want a “real GM’s of MLB” reality show, which is exactly where this would lead to.

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    • James says:

      There could obviously be checks in place to prevent this from happening. As much as we hate Selig it wouldn’t be hard for him to see how a situation like that would perhaps alienate a large fan base and should be avoided.

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    • Pirates Hurdles says:

      Yeah, this system would only be equitable if there were some guarantee that the money obtained had to be spent on the MLB roster which would never happen. Of course you don’t need any complex systems if MLB went full revenue sharing like the NFL. The 1 league, 30 franchises is a much better financial model than 30 individual businesses when it comes to balance.

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      • joser says:

        NFL can do that because there’s a national television market. Outside of the postseason, sometimes, there really is no national baseball market (as Fox has come to realize with their game of the week, no matter how hard they try to make Yankees-Red Sox be a national event). I’d love to see baseball’s territorial model extinguished (along with blackouts) but all those RSN contracts remain, and they’re hardly the same across the country, creating 30 barriers to a national system.

        Really, the MLBPA needs to hold out and demand more of “transfer” money be spent on payrolls. All the luxury tax income should be, for example, as well as the revenue sharing. And this hypothetical domestic posting fee could be as well. The MLBPA is the only group with both the motivation to see this happen and at least a modicum of the teeth necessary to get it done. No longer could an owner be able to put a roster on the field that earns less than the revenue sharing while pocketing the difference. The Jeffery Lorias of the world would hate it, but it would be good for baseball.

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        • RC says:

          The biggest advantage that NFL has at the moment over baseball is not the national market (although its probably a part of it), it’s having a salary floor.

          The NFL’s insistence that everyone atleast pretend to be trying to be competitive gives the whole thing more credibility.

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  13. James says:

    I wonder if this would also pave the way for a salary floor. Despite the crudity of it, it would provide the necessary incentive to not just pocket all the money (though perhaps a percentage system would be needed so clubs can’t just operate on bare minimum).

    It would also probably be the end of pick compensation which would make the players very happy.

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  14. William says:

    I think that if the MLB starts to allow cash in trades, in whatever system, then we’ll see less and less players-for-players sorts of trades. As European soccer has shown, money is a lot more liquid than players – it allows teams to get exactly the player they want, rather than almost the player they want.

    Also, how fees are calculated for luxury tax purposes will drastically affect the amount and their usage. I’d imagine that it would be difficult for the MLB to launch a system without handicapping fees somehow to the luxury tax.

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  15. mike wants wins says:

    Good article, Dave. Here are two more ideas on the same line, or that are more radical maybe:

    1. Let teams post for draft eligible players. All the money goes into a pot, to be divided among the 10 worst teams in baseball. Or some other way.

    2. Let the 10 worst teams bid on draft eligible players, like they are free agents, up to 2 signings a year. Then do the draft. (admittedly, this isn’t really like your idea)

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    • Ross B says:

      I don’t remember who suggested it(maybe Keith Law?), but I like the idea of a fantasy style auction for the equivalent of the top ten rounds. Give each team their budget allotment based on their draft slot and let them go, but require each team to sign at least ten players using whatever the minimum bonus would have been for that year anyway.

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  16. kid says:

    This type of system in MLB, and in all of professional sports, would be awesome. The “player for player” way of doing things seems so… colonial (I’ll give you 5 chickens for your 1 sheep)?

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  17. tdi1985 says:

    A couple of thoughts:
    - Curious what the MLBPA would think of this. Maybe they would like that less money is being sent to Japan and that younger players are getting to sign big money deals that had multiple teams competing for their services. Also, more cash to the teams releasing the player to pump back into other players – Provided there are constraints on reinvesting the money as noted.
    - How much would $50MM really help the Rays this year – get the players they want to help improve their team? This is kind of circular reasoning, but given that the free agent pool is getting more and more shallow every year, how would this idea either help or perpetuate that problem? I mean, I get that they could take money from Price and spread it out across a range of quality players, but they’re still not going to get high impact players.

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    • Sumner says:

      And the 50MM is a one-time thing. You can’t get Cano or Ellsbury or Choo or even resign Price for that much. Exactly – zero impact players for that posting fee.

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  18. James Armstrong says:

    Imagine if the Angel’s posted Trout… $200m posting fee?

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  19. David says:

    Wouldn’t low payroll teams stand to benefit more from prospects than the money? They likely couldn’t sustain the increase in payroll required to improve their teams significantly with the posting fee. The Rays couldn’t sign Robinson Cano with the posting fee they’d get from David Price for instance. If the low payroll teams are only gaining the ability to sign mid-level free agents then that doesn’t really do much of anything for them at all. It basically only helps big payroll teams. With this system in place the rich teams could also apply pressure to post a player instead of trade them because they would likely prefer to buy that player and keep their prospects. In the end I don’t see this doing anything besides creating a deeper free agent pool of younger players for the rich teams to choose from and accumulate talent.

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    • TK says:

      It would allow them to resign their own though. E.g. Price posting pays for Myers contract.

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      • David says:

        Would it? How much is the posting fee going to be? I guess if it’s as high as Darvish’s then sure, but even then this set-up requires teams to give-up half their young talent early to lock up the other half. And would Myers be willing to sign a deal knowing that he may only have to wait 4 years to hit FA? Whatever low-budget teams have been doing to retain players or replenish their farm system is undermined by this domestic posting system.

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      • David says:

        Also trading players nearing FA for prospects is a major source of the players these low-budget teams need to sign. Replacing a portion of that talent source with money will reduce both the players the team can post in the future and the players they need to lock up with their posting fees.

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  20. Jay says:

    Forget about a domestic posting system, I’m scratching my head here over the NPB posting system. Has anyone thought this through? Why would Japanese teams post their best players? We can already see this with Tanaka. Essentially, MLB has just stopped the influx of elite talent from Japan. Is that good for MLB?

    I also don’t understand the reason behind the new posting fee cap. Is it to allow small-market teams to be equally competitive in the Japanese market? Congratulations! Now all are equally unable to bring over the future Yu Darvishes.

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    • Nathan says:

      I assumed that was the only reason Japanese teams agreed to it. Fewer mega stars will be posted ant the quality of baseball will stay high in japan.

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    • Simon says:

      Tanaka has one more year with Rakuten, and then another season where he’s a domestic free agent, but can’t move to MLB. I think that it would be well worthwhile for Rakuten to post him and get $20 million in exchange for one season of Tanaka. I suspect that the differences under the new system will not be so great, as there are only a few players who are good enough to command more than a $20 million fee (not sure there are any after Tanaka) and most players are posted as they move towards free agency anyway. It may just result in a delay of a year or maybe two in a few cases.

      Also, this won’t help smaller teams, as they won’t be able to compete for someone like Tanaka, who is effectively a free agent if posted (except that the winning team has to pay $20 million to Rakuten). If anything, it seems a more pro-big market team system than the previous one.

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      • Jay says:

        Is $20 million enough for a year of Tanaka? That’s assuming his club can’t resign him, or that the revenue and reputation that accompanies Tanaka staying is less than $20 million. There’s also no guarantee Tanaka ever comes to the States. It might be better in his self-interest to sign a long-term deal with an NPB team than it would be to wait a couple of years before he can become an international free agent.

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  21. JuanPierreDoesSteroids says:

    MLB should be able to post their players to the NPB or KBO. I think we would have all been happy if Yuniesky Betancourt had been persuaded to move to Korea a loooong time ago.

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    • Nathan says:

      I was thinking it would be fun if there were no posting fee and say a Japanese/Korean team could trade a Tanaka for prospects or MLBers. An equal league just completely separate. It would page the way to a real World Series.

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  22. Bip says:

    So the Phillies would want to post Ryan Howard for $1 every year, in the hopes another team offered him enough that he was willing to take a pay cut to move to a contender.

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    • chuckb says:

      Except that Howard is under contract and, very often, 4th year players aren’t until they agree to one with their teams.

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  23. Tom B says:

    I’m pretty sure I saw this exact scenario in a movie somewhere… oh yeah…
    BASEketball ring a bell?

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  24. Belloc says:

    “If MLB allowed teams to post their young players, creating a free agent market for players still in their mid-20s, demand would be intense. I think it’s fair to say that the demand for posted young players would far outstrip demand for aging free agents….”

    This is precisely why the Players Union would never agree to it. From a labor perspective, the service-time rules work because they limit the number of eligible free agents who will enter the market each off-season. If too many free agents enter the market, salaries would be driven down. The increase in demand for younger free agents would be offset by the glut of supply of less valued older free agents.

    A posting system also acts as a tax on player’s salaries. It’s money that is put back into the owner’s pockets at the expense of a player’s salary.

    If Theo Epstein wants a free-agent market for young players, then he should persuade his bosses and their peers to offer the players a new CBA where every player becomes eligible for free agency after just four years of service time. I guarantee you that if Epstein made that proposal to his bosses, he would be out of a job the same day.

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    • Dan says:

      Totally agree with your first point. Would be interesting, but no way the old players that run the union agree to having more competition from the young guys.

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    • RC says:

      There’s no reason that a posting system would lead to money going back into the owner’s pocket.

      There are real easy ways to make sure teams spend the money on salaries- like salary floors.

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  25. Michael Scarn says:

    This isn’t really important to the core of the article, but I’m not sure we can call soccer “the world’s most popular sport”. The NFL made more revenue last season than every single European soccer league combined, and about 2.5 times what the Premier League made. So by pure size, football is the worlds most popular sport.

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    • James says:

      What’s your source on that? Not challenging, just curious.

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    • Dr Zen says:

      In aggregate, football is much bigger than gridiron. You can’t cherrypick your figures, sorry. The EPL is played in a country with a population of 43 million. The US has a population more than 7 times as large. So you’d expect your most popular sport to make more money than ours, but it doesn’t make 7 times as much.

      FIFA alone expects to make $4 billion from the World Cup though. This is on top of the money domestic leagues and international cups makes.

      Also, the rest of the world doesn’t judge most popular sport by how much money is spent on it, but by how many people play and watch it.

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    • chuckb says:

      Most popular does not equal “wealthiest.” Most popular would imply “has the most followers” and there’s little doubt that international football is more popular than the NFL.

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    • pft says:

      The thing is if you sum all the leagues in Europe it is a bigger sport than all the “football” leagues. And “soccer” is not just a European sport, it is huge in Latin America, Afirca and Asia.

      “Estimates suggest that there are over 240 million registered players worldwide with fan participation in the billions. The Federation Internationale de Football Association (FIFA), serves as the international governing body of soccer. FIFA is composed of both men’s and women’s clubs from around the globe, which are organized and compete within a worldwide soccer league. Founded in 1904 in Paris France, FIFA is currently made up of 205 member associations with over 300,000 clubs and 240 million players from around the world.”

      The have more players than there are adults in the US

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  26. Alex Bloom says:

    You’re right that this is how players are transferred in soccer all the time. Real Madrid paid something like 99 million euros for the rights to Gareth Bale this past summer. What’s interesting, though, is that just this week FIFPro, the union of world footballers, announced it is challenging the current transfer system because it restricts the free movement of players. Here’s a link: http://espnfc.com/news/story/_/id/1654762/fifpro-looks-overhaul-transfer-system?cc=5901

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  27. Nathan says:

    I think small and mid market teams keeping their players into their prime is a good thing. I really don’t care that Theo wishes he could buy good team without selling his future success. Baseball is about fun and I enjoy teams trying to decide what’s more important the present or the future.

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  28. Colin Dew-Becker says:

    Would the Cubs, or another deep pocketed team that prefers to hoard its young talent, pay the Rays $50 million in cash, payable right now, if they could sign David Price for 6/$125M? I think it’s at least possible, and it’s also possible that the Rays would be better off in the short term with $50 million in cash to reinvest in their 2014 roster than they would be with a collection of prospects.

    Just to be clear, this isn’t exactly how the current release fee works. That is, the MLB team does not pay the release fee in one lump sum, it is spread out over a number of years based on the size of the fee.

    If a Major League Club is able to reach an agreement on a contract with the posted NPB player, the Major League Club must pay the NPB Club the designated release fee, which will occur in installments, the timing of which depends on the size of the release fee.

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  29. Damon Selman says:

    In all due respect Mr Cameron, this would be an AWFUL idea. Forget the Lorias of the world. There is a bigger problem. You mentioned soccer as a sport that uses this system. The problem with soccer is transfer fees (the equivalent to release fees) and many clubs attitude towards them. Many rich soccer owners are George Steinbrenner without even George’s minimal financial restraint and are willing rack up $300 MILLION+ DEBTS and then getting bank loans to buy more players. Don’t forget that the prices of release fees will skyrocket, eg in soccer Gareth Bale was recently acquired by Real Madrid for 91 million euros ($123 million). In addition, many teams (especially those bad farm systems) will buy player, not trade for them. The worst case scenario would a reckless mid-market team trying to be the Yankees spend themselves into bankruptcy like Portsmouth FC. Imagine the Royals or Mariners eg spending themselves into liquidation.

    http://www.dailymail.co.uk/sport/football/article-2310464/From-FA-Cup-winners-League-Two-The-decline-Portsmouth.html

    Actually, UEFA is trying to stop some of this insane spending and debt via a “Financial Fair Play” by removing financial incentive for overspending, but it might be fool errands.

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    • chuckb says:

      The luxury tax would still apply and it’s notable that the Yankees and the Angels, to name just two, are particularly leery of going beyond that threshold. I don’t know whether the posting fee would count toward the luxury tax (though it certainly could be written in to the CBA) but the luxury tax would still prevent teams from buying up all the best players.

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  30. Brian L says:

    The sales tax analogy is a great one. This was a clear decision to limit free market dynamics in favor of a more regulated system favoring smaller market teams, which in an uncapped market risked never having a shot at landing the top Japanese players when one of the Yanks, Tigers, Dodgers, Angels, etc. were almost always likely to outbid them.

    Having this similar market capping mechanism on Dave’s hypothetical MLB player posting system would probably defeat the purpose, unless the cap was set so high that it would rarely reached (and effectively be a free market). In Dave’s scenario, the small market teams could benefit from selling players, but that’s probably the only way they could. If there were a low posting limit, these teams likely wouldn’t see it as worthwhile enough to sell their guys. And if there’s no cap, the bigger fish would again eat up the smaller ones. Small market teams could only take advantage by selling assets and trying to reinvest those tens of millions of dollars, which may only be possible in free agency, a seemingly very inefficient tradeoff. Maybe you could tinker with the specifics to make it work, but regardless not sure I see the big picture…

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  31. pft says:

    If a player would not sign an extension why would they accept a below market long term contract (that 50 million gets deducted from the available funds for the contract) as a pseudo free agent? Why would a team pay 50 million to get only 2 years of David Price and then have to pay his salary? They would not

    The Japanese posting system works because MLB teams who can pay the posting fee have revenues 4-6 times that of the average Japanese team, and players make only 20% what they would in the US. A 20 million posting fee is equal to the payroll of Tanakas team less Tanaka. Tanaka agrees because he only makes 4 million a year and can make 16 million per year in the MLB even with the posting fee. So while he pays for the 20 million indirectly he still comes out ahead than if he waited 2 years.

    In the MLB, David Price can expect to make as much as 80% of his free agent AAV in his final year of arbitration, not 25% like Tanaka. Tanaka jumps at the opportunity, while Price laughs

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  32. Bertie says:

    As an English follower of both soccer and baseball, I’d be very cautious about introducing what would effectively be “transfer fees” into baseball. This system has harmed soccer in so many ways. The big market clubs gain all the benefits. Small market teams have no means of competing – they end up either being forced (by pressure from the player and the big clubs) to sell their prospects when they are still developing (and hence worth less) or trying to compete with the top clubs (see the bankruptcy of Portsmouth FC, earlier in this thread). The really big transfer fees occur when one big club sells to another big club, and this just moves money around the elite, it does nothing to feed it down to the smaller clubs.

    Looking on from the far side of the Atlantic, one of the huge attractions of US sports are the systems set up to drive competitive balance (less so in baseball, but even here there are a number of controls). The end result is sports which are much more competitive as the smaller market organisations have something to play for (most of the time). How many clubs have a realistic shot at the postseason in 2014? Compare this to most European soccer leagues where the champions are the same 2-3 clubs for decade after decade.

    Don’t risk the competitive balance (even with its imperfections) for a system of “transfer fees” which could lead to consequences which are neither intended nor desired.

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  33. bcp33bosox says:

    “But, this is basically how players change teams in soccer, with large cash payments going from one team to another. Buying players with cash is widely accepted as the primary way of improving a team’s roster in the world’s most popular sport.”

    Lots of soccer teams, even the powerhouses in Europe are in debt…mostly as a direct result of spending too much on transfers.

    http://en.wikipedia.org/wiki/UEFA_Financial_Fair_Play_Regulations

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