Japanese Posting System

Definition

Players from Japan's top league -- Nippon Professional Baseball (NPB) -- who do not have the requisite nine years of professional experience to gain international free agency can request to be "posted" for Major League clubs.

Under posting rules that remain in effect through the 2017-2018 offseason, Japanese clubs set a "release fee" -- an amount that NPB clubs must receive in the event an agreement is reached between the player and a Major League club. The maximum release fee that Japanese clubs can set is $20 million, although it can be considerably lower as well. Any Major League club that is willing to meet the designated release fee can negotiate with the player for 30 days after the player is posted, but only the club with which the player signs must pay that release fee. If no agreement is reached, no club pays the release fee and the player returns to his NPB club for the coming season. He cannot be posted again until the following offseason.

New posting rules will be instituted in the 2018-19 offseason. Players will have to be posted between Nov. 1 and Dec. 5, and the 30-day negotiating window will still apply. Under this system, the release fee sent to a Japanese club for a posted player will depend on the guaranteed value of the contract that player signs with a Major League club.

• For Major League contracts with a total guaranteed value of $25 million or less, the release fee will be 20 percent 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 20 percent of the first $25 million plus 17.5 percent 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 20 percent of the first $25 million plus 17.5 percent of next $25 million plus 15 percent of the total guaranteed value exceeding $50 million.
• For all Minor League contracts, the release fee will be 25 percent of the signing bonus. For Minor League contracts that contain Major League terms, a supplemental fee will be owed if the player is added to the 25-man roster.
• If a posted player signs a Major League contract that contains bonuses, salary escalators or options, a Japanese team may receive a supplemental fee equal to 15 percent of any bonus or salary escalators actually earned by the player, and/or 15 percent of any option that is exercised.

So if a player signs a Major League contract with a guaranteed value of $100 million, his Japanese team would receive roughly $16.9 million ($5 million for the first $25 million, $4.4 million for the second $25 million and $7.5 million for the final $50 million).

The caveat of the posting system is that foreign-born players are subject to international bonus pool money restrictions unless they are at least 25 years of age and have played as a professional in a foreign league recognized by Major League Baseball for a minimum of six seasons. Under the 2017-21 Collective Bargaining Agreement, each Major League club has a cap between $4.75 million and $5.75 million to spend on the non-exempt foreign-born player pool. Clubs will be able to acquire up to 75 percent of their initial international bonus pool money in the 2017-18 and 2018-19 signing periods and up to 60 percent of their initial pools in subsequent signing periods. This means that a club with an initial pool of $5.75 million can increase its pool total via trade to approximately $10.1 million during the 2017-18 and 2018-19 signing periods.

Examples

The Yankees signed Masahiro Tanaka to a seven-year, $155 million contract -- a sum they paid in addition to a $20 million release fee, which went to the Rakuten Golden Eagles -- following the 2013 season. On the other side of the scale, the Rangers paid a $500,000 release fee to the Yakult Swallows for right-hander Tony Barnette after the 2015 season. Texas then signed Barnette to a two-year, $3.5 million contract, bringing their total investment in him to $4 million.