clock menu more-arrow no yes

Filed under:

Masahiro Tanaka: Release fee to be broken into four separate payments

New, 47 comments
Koji Watanabe

With a new posting system in place, Masahiro Tanaka is able to negotiate with any team he wants. Now Japanese players are essentially free agents and will just cost an additional tax of up to $20 million on top of whatever final contract they agree on. It was previously reported that the release fee would be broken down into two installments to allow more teams the ability to afford Japanese players. It turns out that it's even friendlier than that.

According to Kiley McDaniel of Scout.com, the release fee will actually be broken down into four separate payments when the total is over $10 million. So, since Tanaka will cost $20 million, the payments will go as follows:

Payment One: 50% of the posting fee is due within 14 days of submission of the contact. For Tanaka, that would be $10 million due by February 7th, 2014.

Payment Two: 17% of the posting fee is due within 6 months of submission of the contract. For Tanaka, that would be $3.4 million due by July 24th, 2014.

Payment Three: 17% of the posting fee is due within 12 months of submission of the contract. For Tanaka, that would be $3.4 million due by January 24th, 2015.

Payment Four: 16% of the posting fee is due within 18 months of submission of the contract. For Tanaka, that would be $3.2 million due by July 24th, 2015.

This would cut the posting fee down to less than 75% of the actual total, or $13.5 million, in the first year of his contract. Then the signing team would only owe 33%, or 6.5 million in the second year of the deal.

A plan like this might not be very impactful to a team with revenue streams, but it could mean the difference for teams like the Astros and Twins if they can budget their dues against two separate seasons of revenues. This won't help the Yankees much, since the concern isn't total dollars, but rather taxable dollars. The $20 million release fee is not taxable, so they wouldn't have much of an issue paying it all in one lump sum if they had to. It might actually bring in more competition.