Yu Darvish and the Posting System

Last week, the Texas Rangers finished their deal signing Japanese pitching superstar Yu Darvish to a 6 year deal worth $60 million.  While the $10 million a year may not seem to be that much when comparing Yu Darvish’s salary to that of other star pitchers in Major League Baseball, the total price for Darvish is another thing.  Because Darvish was under contract to a Japanese professional baseball team, the Hokkaido Nippon Fighting Ham (the best or worst name for a team in sport history), MLB teams were forced to bid on the rights to try and negotiate a contract with him.  This system works like a blind auction where teams interested in negotiations with a player submit bids.  The highest bidder ends up getting the chance to talk to the player.  This is the same system which brought Daisuke Matsuzaka to the Red Sox a few years ago.  Yu Darvish set a new posting record, with the Rangers bidding $51.7 million for exclusive rights to negotiate with him.  That $51.7 goes to the club in Japan, who can use the cash for whatever they wish.  This system has it’s ups and downs.  While it allows players who want to come to the U.S. to leave their clubs in Japan, and still have the clubs get compensated, there is also a private bidding war going on when star players become available.

In the end, the Rangers end up paying a total of $111 million for the player, and $51.7 of it goes to Darvish’s club in this case.  Some question whether someone is worth this much money and risk, but it is important to note that bidding high and winning means that no rival team has a chance at getting him under contract for at least another year.

As for the Japanese clubs, the money that the Seibu Lions brought in from Daisuke Matsuzaka was quite helpful in stadium renovations that they wanted to make.  In essence the posting system transformed the stadium into the house that Daisuke built.  The question is, what will the Nippon Fighting Ham do with the $51.7 million?

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