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Yankees sign Masahiro Tanaka: Did the new posting system work?

Masahiro Tanaka's total cost of $175 million was 64 percent more than that of any previous NPB player. Did MLB's new posting rules backfire?

Koji Watanabe

On December 16th, MLB and Nippon Professional Baseball agreed to terms on a new posting system changing the rules on how pre-free agent Japanese players can cross the Pacific to ply their trade at the world's highest level. Thirty-seven days later, the Yankees signed Masahiro Tanaka to a seven-year, $155 million deal, the largest ever given to an NPB player and the fifth largest earned by any pitcher. With the first test case now over and done, are the new standards a victory and if so...for who?

Supposedly, MLB pushed for the new system to ensure that more money goes to players themselves instead of to their Japanese clubs, who were essentially selling them to the highest bidder, and also to give more teams a chance to sign top international talent. Instead of the unlimited silent auction-style posting fee that caused the Red Sox to pay $51.3 million for Daisuke Matsuzaka's rights in 2006 and the Rangers to pay $51.7 million for Yu Darvish's in 2011, there's now a maximum rate of $20 million and multiple teams can engage. The $20 million fee is a price that as many as six MLB teams were willing to meet for Tanaka as the Yankees, Cubs, White Sox, Dodgers, Diamondbacks and Astros all pursued with varying degrees of vigor.

The end result of the process was a total cost of $175 million for the Yankees, roughly a 64 percent increase from the nearly $108 million it cost Texas to post and sign Darvish two years ago. With MLB always looking for ways to limit player costs, not increase them, did the new system really do its job?

To be fair, Tanaka would have cost significantly more than Darvish and Matsuzaka even under the old system. In the four years between the Matsuzaka and Darvish postings, the cost to acquire the best pitcher in Japan went up just $4.6 million, or around 4.5 percent. The bump from Darvish to Tanaka dwarfs that exponentially, but for many reasons. Professional sports franchises usually base their decisions on what other teams are doing and what's working for them. After Matsuzaka and Kei Igawa flamed out in the majors, teams were nervous about spending more for an untested pitcher, even for a statistically superior one with ridiculous stuff in Darvish. In his two years in Texas, Darvish's success has quelled those fears and by this winter, American owners were ready to go all-in for Japanese talent once again.

Nevertheless, competitive bidding did a lot to push Tanaka's price tag to truly historic levels. Under the old system, even if the Yankees had bid an unprecedented $75 million and even if they'd topped Darvish's exclusive rights six-year, $56 million agreement with Texas by 20 percent, they'd have spent over $30 million less in total than they did under the new deal.

The new system was certainly a blow to Tanaka's former team, the Rakuten Golden Eagles and it was just as certainly a boon for Tanaka himself. At face value, it seems to have backfired on MLB. Besides Arizona and Houston who came up short in the end, the teams in the mix were big spenders in big markets. It's not like the new deal allowed the Pirates and Royals to get involved. Meanwhile, a pitcher who's never thrown a major league inning is now among the highest paid players in the game. What's that going to do for Max Scherzer's asking price when he hits free agency next year? What about Jon Lester and James Shields?

MLB owners may have done quite well for themselves, though if you consider their true motives for changing the rules. Instead of allocating most of Tanaka's total cost toward a posting fee that wouldn't count toward luxury tax dollars, the Yankees instead committed millions that small market owners will get a piece of. With their 2014 payroll now well over $189 million, they'll pay heavily in taxes and smaller town clubs will profit, their hands deep in their big brothers' pockets as always. It's no coincidence that MLB decided to switch things up in a year when a 25-year-old with a 1.27 ERA was available and the Yankees were known to be interested. The new deal was about keeping the Steinbrenners from circumventing the luxury tax and not much else.

This was just round one for the new posting system. Rakuten showed that Japanese teams will honor their players' wishes and allow them to go to America even for the measly sum of $20 million. If Hiroshima ace Kenta Maeda is posted next winter as has been rumored, we'll see another epic bidding war - who knows how much the winner of that one will pay.