Good Will Toward Men

Billy Beane, grinchopotamus.

So apparently Hisashi Iwakuma won’t be joining the A’s after all.

From the start, many people were surprised that the A’s had put in such an aggressive bid. FanGraphs’ own Dave Cameron argued that maybe the A’s needed starting pitching. But $19M still seemed like a big posting fee for this player.

And things got really interesting when contract talks began.

Oakland supposedly offered Iwakuma 4 years/$15M. Iwakuma, on the other hand, was looking for more like what Hiroki Kuroda (3/$35M) or Daisuke Matsuzaka (6/$52M) got. Those numbers are not close to being close and suggest that the A’s considered the $19M posting fee part of their cost to get Iwakuma (duh).

Don Nomura, Iwakuma’s agent, claimed that this was Oakland’s position. As background, Nomura is a prominent agent for Japanese players, whose own actions actually precipitated the creation of the posting system. In this case, Nomura felt that the A’s had not negotiated in good faith:

“[The Athletics’] offer was low, and they weren’t sincere… They knew he was just one year away from free agency, and they never showed any respect.”

These are curious remarks if you assume they mean anything more than that Nomura was frustrated.

The fact, invoked by Nomura above, that Iwakuma will be a free agent next year doesn’t support an argument that the A’s were negotiating in bad faith. If the A’s offended Iwakuma in this process, wouldn’t Iwakuma spurn them next fall?

And the fact that Iwakuma was faced with returning to Japan for a year if he could not make a deal with the A’s, even combined with the fact that the A’s maybe lowballed him knowing they’d get their $19M back if he didn’t sign, is likewise not evidence of bad faith negotiation. The posting process gives the MLB team lots of leverage over the Japanese player. Them’s the rules (for now).

The other “bad faith”-related theory is that this was a blocking bid, that the A’s submitted a huge posting fee to be assured of winning negotiation rights when they had no interest in signing the player — when their only interest was keeping him out of the hands of the other 29 teams. Some people speculated that the Red Sox were doing this to the Yankees when they bid $51M for the right to talk to Daisuke several years back. That speculation was undermined when the Sox eventually signed the torturously methodical pitcher.

And while it’s fun to ponder, no team could openly play the blocking game. For one thing, in paragraph 13 of the “United States — Japanese Player Contract Agreement” (PDF here), Bud Selig reserves the right to boot teams out of the posting process and replace them with the next-best bidder. Also, a team pursuing such a strategy would develop a poor reputation with our Japanese friends.

So no team will blatantly block. But when Major League teams sit down to decide on good-faith bids for negotiation rights with Japanese players, two things should factor in:

1. The Japanese player can’t negotiate with anyone else.
2. You get back your entire posting fee if the player doesn’t sign.

Given that, it just makes business sense to be super aggressive with the posting bid and then try to strong-arm the Japanese player into reimbursing you by accepting a below-market deal. If a fallout effect from this approach is that your competitors are blocked from signing the player, hey, that’s gravy.

I suspect that Oakland’s process here might have been similar to the above. Among other things, it fits Billy Beane’s cold-eyed rep. Furthermore, I think this approach is rational, and I think we’ll see Major League teams doing it more. And ultimately I hope it will inspire some changes in the posting system.

Photo credit: Lance Iversen, San Francisco Chronicle.