On Friday afternoon, MLB clubs ratified a new posting system for foreign players. And though that sure was exciting, it’s not what had everyone in a tizzy. The ratification of the new posting system led to the moment everyone has been waiting for: Shohei Ohtani, the intriguing and talented two-way Japanese baseball star, has been officially been posted by his Nippon Professional Baseball team.
MLB sent out a press release detailing the new posting system, which won’t take effect until November 1, 2018.
Here's the entire release on the new posting agreement, with all information about the new system which will be implemented next November 1. pic.twitter.com/jqlxXS0Hyl
— Mark Feinsand (@Feinsand) December 1, 2017
Here’s the real meat of the agreement:
Effective November 1, 2018, the release fee that major league clubs will pay a posted players former NPB club will be as follows:
For Major League contracts with a total guaranteed value of $25 million or less, the release fee will be 20% of the total guaranteed value of the contract;
For Major League contracts with a total guaranteed value between $25,000,001 and $50 million, the release fee will be (i) 20% of the first $25 million of total guaranteed value (i.e., $5 million) plus (ii) 17.5% of the total guaranteed value exceeding $25 million;
For Major League contracts with a total guaranteed value of $50,000,001 or more, the release fee will be (i) 20% of the first $25 million of total guaranteed value (i.e., 5 million) plus (ii) 17.5% of the total guaranteed value between $25,000,001 and $50 million (i.e., $4,375,000) plus (iii) 15% of the total guaranteed value exceeding $50 million;
For Major League contracts that contain bonuses, salary escalators or options (Club, mutual or vesting), the Club may owe supplemental release fee at a later date equal to 15% of any bonuses or salary escalators actually earned by the player under his contract, and/or 15% of any compensation paid to the player in Club, mutual or vesting option years that were exercised or vested; and
For Minor League contracts, the release fee will be a flat 25% of the signing bonus. (For minor league contracts of “Foreign Professionals” that contain Major League terms, a supplemental release fee will be owed at the player is added to the 25 man roster).
The previous posting system, which expired on November 1, didn’t have the complicated structure that this one does. The previous agreement had a flat posting fee of $20 million, and any team that was willing to pay that fee could negotiate with the posted player during the 30-day window. The new system has a graduated release fee, which depends on the value of the total contract signed by the posted player.
At the bottom of the press release, MLB officially announced that Ohtani had been posted by his NBP team, the Hokkaido Nippon-Ham Fighters. Ohtani will have until 11:59 p.m. ET on December 22 to sign with an MLB team.
Neither Ohtani or his team will be subject to the new posting system, as the recently expired system was extended a year. If the new system had gone into effect, it would have meant a lot less money for the Nippon-Ham Fighters. Under the extended system, they’re still getting a flat $20 million posting fee for Ohtani. Under the new system, since Ohtani will be signing a minor league contract, they would have gotten just 25% of his signing bonus, which will top out at $4 million.
Now it’s all up to Ohtani. In just 21 days, we’ll know for sure which team he’ll sign with. Let the sales pitches begin!
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