Shohei Ohtani, the Posting System, and Conflicting Fan Priorities

On Monday night in Sapporo, Japan, Shohei Ohtani made his third start of the season. Scouts from 16 major league teams, including two from the Dodgers, were in attendance. Ohtani threw 5-2/3 shutout innings, allowing one hit and three walks while striking out four batters. His fastball touched 101 miles per hour. Following the game, the Japanese streaming service Pacific League TV produced a compilation video of every slider Ohtani threw:

One particular slider generated quite a bit of buzz: an unintentional back-footer that nearly folded Hiroaki Shimauchi (owner of one of the lowest strikeout rates in NPB) in half.

北海道日本ハム(@FightersPR)・大谷選手の切れ味鋭いスライダー。 #lovefighters pic.twitter.com/wrLCNTB920

— パ・リーグTV公式 (@PacificleagueTV) September 12, 2017

These sliders were not necessarily up to the incredible standards Ohtani set for himself last year, standards which prompted a post by me following completion of one of the most memorable player seasons in history. Ohtani posted a 1.000 OPS at the plate, was one of the best pitchers in the league, set Japan’s pitch velocity record, and won the league’s most valuable player award in his age 22 season. His team capped it off by winning the Japan Series title.

In the context of Ohtani’s unbelievable 2016 campaign, his 2017 season has been something of a disappointment. This trouble began in February when the Fighters announced that he would miss the World Baseball Classic due to an ankle injury sustained during the previous year’s Japan Series and re-aggravated during an international scrimmage game the following month. The ankle injury was mysterious at the time, though it was recently revealed that he has a bone spur in his heel that will require surgery following completion of the regular season.

The ankle issues prevented Ohtani from pitching at the start of the season, but it didn’t slow down his bat. In his first 32 plate appearances, he hit .407/.469/.815, good for a Bondsian OPS of 1.284. However, certain team rules were put into place to keep him from further injuring the troublesome leg. The Fighters told him not to run at 100%, but for many baseball players those instructions can be easy to forget in the heat of the moment. While attempting to run out an infield single on April 8th, Ohtani landed awkwardly on first base and sustained a severe hamstring injury. He did not require surgery, but he was out for nearly three months.

Ohtani returned to the field in late June, but his play indicated that he was not yet fully healthy. However, the Fighters, reeling from the loss of then-league-leading hitter Kensuke Kondoh, desperately brought Ohtani back earlier than they probably should have. In 48 July plate appearances, Ohtani hit .222/.271/.333. The Fighters were simultaneously rehabbing Ohtani as a pitcher. An early-July minor league rehab start only lasted one inning. Ohtani touched 97 with his fastball, but sat in the lower 90s with a visibly diminished forkball and a very inconsistent slider.

However, perhaps after finally finding his health, Ohtani has been on fire at the plate for nearly two months. In August he hit .389/.451/.583 in 82 plate appearances. In September he has improved beyond that, hitting .375/.524/.813 in 21 plate appearances. His power is back as well. Just last week, with MLB scouts watching, Ohtani broke the scoreboard in dead center field at the Tokyo Dome during batting practice, an estimated ~500 feet away from the plate. His game power seems to be doing fine as well:

Meanwhile, Ohtani has been working his way back on the mound. Monday’s start was the first time this season where he had two starts in a relatively normal cadence. As such, his stuff was not as sharp as he displayed last year. You wouldn’t expect that of somebody making his third start of Spring Training either. However, it was still an impressive showcase for the scouts, provided that they contextualize the occasionally missing command.

Ohtani is not without his flaws. He has had health issues before this season, with leg problems limiting him to another partial season in 2015. He occasionally struggles with his command and has also had blister problems in the past. If there were a stateside pitching prospect who has pitched fewer than 30 innings in the previous 14 months or so, obviously it would raise some red flags, though Ohtani’s hitting abilities have kept the Fighters from needing him to pitch at all times. On the bright side, none of these issues have been related to his pitching arm, which has maintained a very reasonable workload early in his career. The raw stuff is absolutely there, raw stuff which one scout told me was “the best [he’s] ever seen.”

There are also valid questions on whether Ohtani’s hitting approach will work in the majors. Previous Japanese sluggers have not fared well in this department, as Dodger fans will remember with Norihiro Nakamura. Ohtani does strike out quite a bit compared to the rest of his league, and his current .346/.416/.574 line is elevated by a BABIP well above .400. Ohtani hits the ball very hard and is very fast (at least a 70 on the 20-80 scale, though it doesn’t translate into stolen bases), so a high BABIP is expected to some degree. However, Ohtani is the type of hitter who could be hurt by the more extensive pull shifting found in MLB. The MLB offensive game has changed a lot since the last time a Japanese power hitter tried to make it in the majors (unless you count Korean-born Dae-ho Lee‘s success in NPB), and Ohtani is significantly younger than those who have come before him. He has more time to adjust, and he has adjusted well to different approaches NPB pitchers have tried against him.

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The day after Ohtani’s most recent start, multiple Japanese outlets reported that he will still be posted after this season. This isn’t necessarily surprising; Ohtani said as much last year. However, this was before the new MLB Collective Bargaining Agreement made significant changes to the way international prospects are compensated. Previously, the CBA treated international players under 23 as amateurs and limited the amount of money teams could spend on them. Overages were taxed by MLB, and teams who went over were then limited in how much they could spend on any player individual player in the following two seasons.

Ohtani turned 23 in July, so when he announced his desire to play in MLB in 2018, it made sense because it coincided with when his bonus would be uncapped. However, the new CBA raised the age at which a player is considered an amateur from 23 to 25 and instituted much harsher penalties for exceeding a team’s allotment. Additionally, penalties accrued under the old system still applied. The Dodgers cannot sign international prospects for more than $300,000 until July 2, 2018. The maximum bonus that an un-penalized team can pay for Ohtani is about $10 million, provided that they trade for more international bonus pool money from other teams and don’t spend it elsewhere. Ohtani announced his desire to move, then two weeks later the CBA knocked nine figures off his potential bonus. People surrounding Ohtani, such has his manager Hideki Kuriyama, have long said that money doesn’t really matter to him. These reports seem to prove that, as Ohtani did before when he stayed in Japan rather than signing with the Dodgers in 2012.

Further complicating matters is the current upheaval of the posting system between NPB and MLB. A player who signs with an NPB team is under contract for eight years of service time before they reach domestic free agency. International free agency comes a year after that. The posting system was created to incentivize NPB teams to allow their players to chase their dreams in MLB, while compensating them for their lost stars. The first significant change to this system occurred in 2013 prior to the posting of Masahiro Tanaka by the Rakuten Golden Eagles. Posting fees were beginning to run into the neighborhood of $50 million. Some teams in NPB found this unfair, and since the team which won the posting bid was the only team allowed to negotiate with the posted player, it artificially limited the amount of money that player could receive. As a result, posting caps of $20 million were put in place, and every team that was willing to meet the cap could compete to sign the player. This system worked well for Tanaka, who blew away the salaries which Yu Darvish and Daisuke Matsuzaka received in previous years. Two years later, the Dodgers paid the maximum posting fee in order to sign Kenta Maeda.

When this iteration of the posting system was put into place, a provision was included that required it to be frequently renewed by both MLB and NPB. Earlier this year, MLB requested a renegotiation. Shohei Ohtani wants to be posted this offseason. However, as of this writing, there is no posting system.

MLB’s motivation for renegotiating the posting system is the same as their motivation to severely limit Ohtani’s signing bonus: the owners want to pay less money for international talent. It’s brazen, and it’s transparent. A source made this very clear to reporter Jim Allen of the Kyodo News in July:

According to a source, NPB Commissioner Katsuhiko Kumazaki told a recent NPB board of directors meeting that he asked for a maximum posting fee higher than the $20 million allowed under the old system. MLB’s response was to suggest the posting system was bad for Japanese baseball.

More recent revelations, also reported on by Allen, show how MLB plans to accomplish this:

Both [proposed] systems will look to base team compensation on a percentage of what players earn in signing bonuses, incentives, salary that would eliminate NPB teams’ ability to select the amount of money they want in exchange for posted players. The two proposals, according to Oikawa are: A: 15 percent of all money paid to a player or B: 15 percent of all money paid to a player up to $100 million. Over $100 million, the posting fee would be $20 million.

Under the previous system, whichever team signed Ohtani would have to pay the Fighters a $20 million posting fee. Under the system MLB is proposing, the maximum amount of money the Fighters could get for releasing Ohtani from his contract three years early is $1.5 million. If the Dodgers managed to sign Ohtani with their capped bonus of $300,000 (and some in the industry still view the Dodgers as being very much in play), the Fighters would only receive $45,000. The posting team may add some team rights of refusal, but it’s still a significant blow to what they would have received before.

The proposed system would likely limit postings of mid-level players. For example, the Dodgers signed Kenta Maeda for a $24 million guaranteed salary and paid the Hiroshima Carp a $20 million posting fee. Under the system proposed by MLB, the Carp would have received a $3.6 million posting fee from the Dodgers, and theoretically Maeda’s performance incentives would be tied to additional compensation for the Carp. Unlike MLB teams, most NPB teams operate as loss leaders and are generally not seen as the same type of investment vehicle as MLB teams. Thus, posting fees frequently go back into the team to some extent. Given the Carp’s initial reluctance to post Maeda (they declined to post him despite his request a year earlier), it’s possible that they would have held onto him until he reached free agency. The reluctance to post all players except the top stars could lead to more players skipping Japanese baseball altogether, like Ohtani almost did years ago. Alternately, it could lead to more players staying in Japan, reducing the number of high-profile Japanese players in MLB. If MLB truly cared about the well-being of Japanese baseball, like they claimed during posting negotiations, they would not be trying to deal this type of blow to NPB. It’s clear that their priority is financial.

It’s natural to ask why NPB ownership would agree to such a radical reduction in the amount of money they would get from such a change. The answer comes from understanding the political friction which exists within the league. The Yomiuri Giants and SoftBank Hawks are the two richest teams in Japan. Both have stated directly or through their actions that they’d rather the posting system not exist at all. If you were impressed by Tomoyuki Sugano and Kodai Senga‘s pitching in the semi-finals of the World Baseball Classic in March, those teams are why you’re not hearing more stateside buzz. Both teams frequently lead the league in attendance and payroll and were instrumental in the push for easier domestic free agency. Since they can significantly outspend everyone else, they don’t need the posting fees and would benefit from other teams receiving smaller amounts from their own posted players. If that player is never posted and reaches domestic free agency, they benefit again, because if they want a player they become the prohibitive favorites to sign them.

The Giants in particular have significant political pull within the league and have the ability to coerce other teams to vote against their own self-interest. When posting fees were capped before Tanaka moved to MLB, the Giants were allegedly one of the teams that pushed hardest for change. The capped fees were against NPB teams’ best interest, but they were ratified anyways. This change has been very positive for Japanese players, but there has to be an incentive line somewhere.

If no system is put in place this winter, Allen also floats another possibility:

If there is no posting system, don’t be surprised if the Fighters declare him a free agent.

— Jim Allen (@JballAllen) September 13, 2017

That brings us back to Ohtani and his money. By signing a capped contract, Ohtani is leaving an incomprehensibly large amount of money on the table, one he could get with just two more relatively healthy years. As such, one option which is frequently floated is a sign-then-extend situation, which David Cameron of FanGraphs laid out in this post. The idea is basically that if Ohtani signs a capped bonus and immediately plays up to his all-star potential, a team would give him a pre-arbitration extension after a year or two. There is a huge grey area here, since it can be seen as an obvious circumvention of the CBA, but is also a comparable situation to pre-arbitration extensions signed by players who have moved through the MLB system (it’s also worth noting that NPB teams might get doubly screwed here because they presumably would not be entitled to extra compensation due to the post-posting raise). This type of situation is one which could be used to bring the Dodgers back into the mix to sign Ohtani despite their international bonus caps, but they cannot agree to do this with Ohtani beforehand. This is extremely messy.

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Ultimately, as a fan, I am extremely conflicted. Ohtani is acquiescing to MLB ownership’s obvious greed, a flagrant move to limit the amount of money he can make. It could weaken Japanese baseball as a whole, since it will be accompanied by massive changes in the posting system. It sets a tremendously bad precedent for other players, both from Japan and from other countries. It also validates the league’s awful behavior towards international players, where I’d rather see it rebuked.

The best-case scenario in my mind is that Ohtani waits for two years, gets an uncapped bonus, and the Fighters get a fair posting fee. Yet, seeing him move to MLB now still makes me excited as a short-term fan. I have been watching Ohtani play since about 2013, and he’s the most dynamic and exciting player I have ever seen. Obviously I want him to be on the Dodgers. Almost certainly, the Dodgers want him to be on the Dodgers. The short-term baseball fan in my head and the big-picture baseball fan in my head have completely different views of the situation. The Dodger fan part of my brain and the Japanese baseball fan part of my brain also disagree. I don’t know what to do about that, other than note it and move on.

This conflict is made even deeper by the fact by moving over now, in a strange way Ohtani creates more leverage for himself. Not contractually, obviously, but in order to pursue his two-way player dreams. With all teams on a mostly-even financial playing field, he can sign with whichever one will let him pitch and hit. He will get a chance to try his two-way player experiment here, and as a baseball fan it will be riveting. I just wish it didn’t come with all of the extra baggage.

It is definitely possible for the Dodgers to sign Ohtani, and it’s definitely possible for them to let him chase those dreams. They will have to innovate in order to make that happen, but they have the right front office in place to figure out how to carve that path. However, thinking about how that could happen will have to wait for another post. In the meantime, the other parts of this are worth thinking about.