The Crowd Speaks: Masahiro Tanaka’s Contract

A few hours ago, I put up a crowdsourcing form for you guys to project what Masahiro Tanaka will sign for in the next few weeks. Now that we’re up to about 700 entries, I’d say our sample is large enough to post the results.

First, some graphs, because the word is in our name.

TanakaYears

TanakaAAV

No huge surprises here, as pretty much everyone came in at six or seven years and $17M to $22M in annual average value. Because of Major League Baseball’s service time rules, nearly every big league ready international free agent signs a six year contract, as the player is going to be under team control for at least six years regardless of the length of the deal, so the player’s goal is to essentially maximize the number of guaranteed years.

Any years within the first six that don’t get covered by the original deal essentially turn into team options, as the player would qualify for arbitration if he was good and the team could non-tender him if he was not, so there’s not a lot of motivation for the player to accept shorter term deals. Yoenis Cespedes is the one exception, as he got the A’s to waive the final two years of team control in exchange for only signing a four year contract, but it’s hard to imagine Tanaka going that route, given pitcher injury rates. Six or seven years seems like a very safe bet.

The salary is a little bit more spread out, but by and large, everyone is still in a pretty tight range. Every value between $17-$22M got at least 9.7% of the vote, but no number outside of that range got more than 3.7%. And because it’s a round number, $20 million got the most votes. People love round numbers.

So, the final tally:

Average years: 6.3
Average AAV: $19.7M
Median years: 6
Median AAV: $20M
Average Total: $124M
Median Total: $120M

Six years, $120 million or so. That’s what you guys think Tanaka is going to sign for. That’s what I’m guessing too, though I won’t be too shocked if it’s ends up a bit higher than that. I would pretty surprised if it was much lower. As a general rule, the crowd has been consistently too low on large contracts; missing on Cano by two years, missing on Ellsbury by one year and $3M in AAV, missing on Choo by two years and $3 million in AAV, and missing on McCann by one year and $2M in AAV. If this estimate follows the trend of previous forecasts for big contracts, maybe a more realistic projection would be 7/$154, or almost exactly equal to the Ellsbury contract. Toss in the $20 million posting fee, and that would put him at $7/$174M, or $1M shy of the extension signed by Felix Hernandez.

Either way, Tanaka is about to become a very rich man.




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


40 Responses to “The Crowd Speaks: Masahiro Tanaka’s Contract”

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  1. robby says:

    i wonder how the 20M posting fee that’s lower than other players in past years could affect teams look at total contract cost

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    • Bip says:

      Darvish signed only 2 years ago, and he is generally considered to be better than Tanaka, and he got 6/56. We’re basically considering it a forgone conclusion that Tanaka will get between 120-150 million. Clearly there are some major factors besides inflation that are responsible for this difference. His ability to negotiate with many teams is probably the main difference, but the reduced posting fee surely plays a part as well.

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      • LaLoosh says:

        Darvish was nearly a steal even if you include the 52M posting fee.

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        • Bip says:

          Absolutely true. When a player can only negotiate with one team, that really makes a huge dent in his leverage. And, considering Texas wouldn’t have paid anything had they not signed him, Darvish couldn’t even threaten to let them waste their 52M.

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  2. Atreyu Jones says:

    I’m really surprised so many people think the deal will only be 5-6 years long.

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    • Daniel says:

      You see this a lot on FanGraphs contract crowdsourcing: people lean more toward what is fair (to them) rather than what is realistic.

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    • Franco says:

      I went with 6 years because anymore than that might become less desirable for Tanaka himself since he’s so young.

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  3. Jason says:

    How did the Mariners manage to get six years of Hisashi Iwakuma for only $1.5 million guaranteed?

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    • swedishfish007 says:

      They didn’t.

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    • Ian R. says:

      They got six years of team control by signing him to a $1.5 million contract, but they only actually got one year at that price.

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    • rustydude says:

      Wasn’t Iwakuma posted one year, A’s didn’t sign him that year, and then he was a true free agent when the M’s signed him?

      If so, I don’t think any of the posting issues apply. For example, I don’t even think M’s have any years of control beyond the current contract he’s signed to. I seem to recall Dave Cameron in one of his chats confirming a question of mine in regards to team control of Iwakuma – and he answered, none.

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  4. CPT says:

    Can we have a separate poll that asks how much Tanaka will be giving Rakuten?

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  5. My prediction:
    7 years- 25 mil
    5 yrs. guaranteed

    The Yankees

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    • Christian says:

      You think he will get $175 million dollar contract?? I know that his contract will be inflated but by that much? What is your reasoning behind that.

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      • Dana says:

        It only takes one team…Now that multiple teams can bid, I also believe his contract will end up on the higher end of the range. The average offer will probably be close to where the average is coming out here, but it only takes 1 team on the high end. And because of our system, this is fairly unprecedented, to have multiple bidders on a pitching talent at this age

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  6. Andrew says:

    8 years 150 mil. Yankees

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  7. fjtorres says:

    One thing to consider is Tanaka’s age.
    I expect the contract to be loooonnnggg (10 years) and have an opt-out at 6 years so he can get another megadeal in his early 30’s. $23-25M per year.
    Because of his age, even non-contenders can talk themselves into outbidding the field.
    Houston or Cubbies won’t be a shock.

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  8. pft says:

    The team that gets him is probably going to have to go 10 years. I say 10 years 180 million, front loaded the first 6 years with a player opt out after 6 years and a couple of team options after 10 years. This drops the AAV to 18 million which is beneficial to teams up against the LT threshold

    Keep in mid Tanaka will only be 34 in his 10th year and if not a great SP’er at the end he could be a pretty good RP’er like Koji.

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    • pft says:

      Sorry fjtorres, I didnt see your comment, but obviously we are thinking along the same lines

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      • fjtorres says:

        No problem.
        People keep thinking Darvish when they need to be thinking Arod@25 or Sabathia. Tanaka is a free agent negotiating with 30 teams, not one.
        On paper he is a 25 year number 1 FA starter with no QO attached.
        There are risks and concerns but there is so shortage of “bigger fools” willing to gamble on him.

        It’s really up to him whether he follows the top dollar wherever it might lead (even Minnesota, Cleveland, or Houston if it comes to that), or he goes to an established contender (Boston, Texas). The same with length; if he wants 10 guaranteed years, somebody will ante up–if he wants a Cespedes-style short-n-sweeet, no strings attached, deal he’ll get that too.

        It’s Tanaka’s call. He’s a stranger coming to a strange land so he might want to keep his options open.
        He could go for anywhere from 3 years/$75M to 10/$200 and anything in between.

        The money is there.

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        • fjtorres says:

          Ooops.
          “No shortage of bigger fools.”

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        • Roger says:

          The scouting consensus appears to be a #2 starter, not a #1. It’s debatable, but it’s what the bidding will mostly be based on. Very valuable, but not ARod or Sabathia territory.

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  9. Park Chan Ho's Beard says:

    a 20% posting fee makes so much more sense than a fixed $20mil fee that it’s almost mind boggling

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    • Canard says:

      …except that the posting fee is the right to talk to the player, and thus has to be known prior to any contract being negotiated.

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      • Ben says:

        …or a team is gambling that 20% of the contract is the posting fee they actually want.

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        • Roger says:

          How about the posting team names a minimum posting fee, any team that agrees to pay it can negotiate with the player (as it is now), and the posting team receives the greater value of their minimum posting fee or 20% of the contract value?

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  10. Yaloow says:

    I don’t get these numbers. Tanaka’s agent has already informed the appropriate people that his client expects $17m/per, and because that’s the opening demand so… fishing, to go along with his low and declining K rates, why would anyone assume a much higher contract?

    Cano’s wants 10/300. Ring a bell?

    The guy reminds at least me of Matsuzaka: Star lifestyle, no out-pitch, boring fastball. I doubt he will ever be worth $17m if he gets it.

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  11. Trev says:

    Most recent Japanese players have had clauses inserted into their contracts making them free agents when the contract expires regardless of their MLB service time.

    Koji Uehara has signed three contracts with this clause and he’s only at 5 years of service time.

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  12. Persona non Grata says:

    Because of Major League Baseball’s service time rules, nearly every big league ready international free agent signs a six year contract, as the player is going to be under team control for at least six years regardless of the length of the deal, so the player’s goal is to essentially maximize the number of guaranteed years.

    I didn’t think that Tanaka was considered a free agent, just like Aoki wasn’t. Aoki was posted and signed for two years, with a third year option. However, the Brewers thought that they would go to arbitration after that and MLB ruled that he’d be a free agent instead.

    Therefore, I’d think that we’d have to consider Tanaka in the same boat as Aoki. If he doesn’t get 6 years, he’ll be a free agent after his contract and avoid arbitration entirely.

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    • Persona non Grata says:

      Nevermind. I just did some more digging and it appears that Aoki had language put into his contract, however obscure at the time, that allows him to opt-out of arbitration and become a free agent and the end of the contract.

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  13. Matt says:

    Let’s not forget that Darvish has $4M in roster bonuses in his contract, essentially making it 6/$60M for a total cost of 6/$112M for the Rangers. Darvish also has the ability to opt out of his contract a year early if he finishes high enough in Cy Young voting (http://hardballtalk.nbcsports.com/2012/01/20/details-of-yu-darvishs-contract-with-the-rangers/).

    This matters more for Darvish since he would be opting out of a $11M year and Tanaka will be making much more than that, but I could see some MLB teams using a clause like this to entice Tanaka.

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  14. TKDC says:

    Any chance some of the crowd is overreacting to low-balling the other premier free agents this year? Talk of $200 million plus seems ridiculous.

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    • fjtorres says:

      It sounds ridiculous and it might turn out to be.
      But it might also happen.

      The problem is this is pretty much unprecedented: a young free agent with gaudy numbers coming into a market where the most appealing FA pitcher is Matt Garza.
      And every single team is *known* to have gotten a $25M boost in national TV money.
      It’s a perfect storm of leverage.

      There is need and there is money and if money is Tanaka’s driver he’ll get obscene amounts. Because of his age, at least teams can convince themselves that, even if he turns out to be no better than Garza or Jimenez, he’s a fair bet on a long contract.

      The way salaries have been inflating, 20M might be the going rate for a three in 5-7 years.
      And its not hard to draw a list of teams that can easily afford a 20M number three: Yanks and Dodgers, of course. Cubs and Astros. All it takes is one team that buys him as a one.

      It has been repeatedly pointed out the many ways Houston can use Tanaka: to rebuild their brand and credibility with fans right away, to fill out their rotation along with Appel and (presumably) Rodon, to pacify the players and owners who look at their Marlins-esque payroll and are not happy…

      $200m sounds extreme and it is.
      But the odds of it happening are non-zero.
      Tanaka is a lottery ticket: He might be another Yu, he might be Irabu. But there is money and there is need.
      He’ll get paid.

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  15. Ed Ryan says:

    My feeling is Seattle (Nintendo ) will be top dog in this bid war

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  16. maqman says:

    The Japanese cultural differentiation between people of younger ages deferring to those who are older might lead him to avoid teams with older Japanese players, such as Iwakuma and Darvish. Kuroda being only signed for one year might not be viewed quite the same. Conversely, he and Darvish were workout buddies in Japan and reportedly have BFF tattoos and he played with Iwakuma at Rakuten for about five years, which might alleviate the cultural age deference. Tanaka is reported by Japanese media as enjoying the spotlight and having married a well known singer/actress/idol who is four years his senior might be a clue. If so the bright lights of Broadway and LA may well have an edge, they would also probably provide more endorsement opportunities. 7/$140 would be my expected cost, with the $20 “transfer fee” separate from that.

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  17. colbyamoss says:

    Final result 7/155, incredible prediction.

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