Posting system

The posting system (ポスティングシステム, posutingu shisutemu) is a baseball player transfer system that operates between Nippon Professional Baseball (NPB) and Major League Baseball (MLB). Despite the drafting of the United States – Japanese Player Contract Agreement, unveiled in 1967 to regulate NPB players moving to MLB, problems began to arise in the late 1990s. Some NPB teams lost star players without compensation, an issue highlighted when NPB stars Hideo Nomo and Alfonso Soriano left to play in MLB after using loopholes to void their existing contracts. A further problem was that NPB players had very little negotiating power if their teams decided to deal them to MLB, as when pitcher Hideki Irabu was traded to an MLB team for which he had no desire to play. In 1998, the Agreement was rewritten to address both problems; the result was dubbed the "posting system".

Under this system, when an NPB player is "posted", his NPB team notifies the MLB Commissioner, with the posting fee based on the type of contract a player signs and its value. For minor-league contracts, the fee is a flat 25% of the contract's value; for MLB contracts, the fee is based on the value of the contract that the posted player eventually signs. The player is then given 30 days to negotiate with any MLB team willing to pay the NPB team's posting fee. If the player agrees on contract terms with a team before the 30-day period has expired, the NPB team receives the posting fee from the signing MLB team as a transfer fee, and the player is free to play in MLB. If no MLB team comes to a contract agreement with the posted player, then no fee is paid, and the player's rights revert to his NPB team. The current process replaced one in which MLB held a silent auction during which MLB teams submitted sealed, uncapped bids in an attempt to win the exclusive negotiating rights with the posted player for a period of 30 days. Once the highest bidding MLB team was determined, the player could then only negotiate with that team.

Up to the end of the 2017–18 posting period, 23 NPB players had been posted using the system. Of these, 12 signed Major League contracts, four signed minor-league contracts, five were unsuccessful in attracting any MLB interest, and two could not come to a contract agreement during the 30-day negotiation period. The five highest-profile players that have been acquired by MLB teams through the posting system are Ichiro Suzuki, Daisuke Matsuzaka, Yu Darvish, Masahiro Tanaka, and Shohei Ohtani. The first three attracted high bids of $13.125 million, $51.1 million, and $51.7 million respectively. Tanaka was the first player posted under a revised procedure that was in place from 2013 to 2017; he was posted for the maximum $20 million allowed under the new rules. Ohtani was the first player posted under the current procedure; his posting fee of $20 million was grandfathered in under the previous agreement. Since its implementation the posting system has been criticized by the media and baseball insiders from both countries.

The first instance of a Japanese-born player playing in Major League Baseball was in 1964, when the Nankai Hawks, an NPB team, sent three exchange prospects to the United States to gain experience in MLB's minor league system. One of the players, pitcher Masanori Murakami, was named the California League Rookie of the Year while playing for the Fresno Giants (the San Francisco Giants' Class-A team). Giants executives were impressed with his talent and on September 1, 1964 Murakami was promoted, thus becoming the first Japanese player to play in MLB. After Murakami put up good pitching statistics as a reliever, Giants executives sought to exercise a clause in their contract with the Hawks that, they claimed, allowed them to buy up an exchange prospect's contract. NPB officials objected, stating that they had no intention of selling Murakami's contract to the Giants and telling them that Murakami was merely on loan for the 1964 season. After a two-month stalemate the Giants eventually agreed to send Murakami back to the Hawks after the 1965 season. Thus, after pitching one more season for the Giants, Murakami returned to Japan to play for the Hawks. This affair led to the 1967 United States – Japanese Player Contract Agreement, also known as the "working agreement", between MLB and NPB, which was basically a hands-off policy.

MLB and NPB officials created the posting system as a combined reaction to three cases in the 1990s, involving NPB players who moved to MLB. The first of these occurred in the winter of 1994 when pitcher Hideo Nomo, with the help of agent Don Nomura, became the second Japanese-born player to play in MLB, 30 years after Murakami. Nomo, who was not yet eligible for free agency in Japan, was advised by Nomura that the Japanese Uniform Players Contract's reserve clause limited the Kintetsu Buffaloes' control over him to Japan only. Nomo utilized this loophole by voluntarily retiring from NPB to terminate his contract with the Buffaloes, circumvent its reserve clause and play in MLB. He announced his retirement from NPB in late 1994 and signed with the Los Angeles Dodgers in February 1995, where he won the National League Rookie of the Year award. The following year, the Dodgers signed Nomo to a three-year, $4.3 million contract.

In early 1997, after months of negotiations, the San Diego Padres signed a working agreement with the Chiba Lotte Marines that gave the Padres exclusive signing rights to another Nomura client, Hideki Irabu. Although both Irabu and Nomura stated that Irabu would only sign with the New York Yankees, neither the Padres nor the Marines consulted Irabu before finalizing their deal. The Major League Baseball Players Association (MLBPA) sided with Irabu, stating that the arrangement unfairly disregarded a player's expressed wishes. However, MLB's executive council ruled that the Padres had not violated any existing rule, and therefore legally held the rights to Irabu. Following this decision, Irabu contemplated a number of different options, including playing in NPB until he became a free agent, and taking the matter to the U.S. judicial system. By May, however, the Padres gave in and traded Irabu to the Yankees, who signed him for $12.8 million over four years.

The final incident occurred in 1998, when Alfonso Soriano was unable to leave the Hiroshima Toyo Carp due to contract restrictions. Soriano disliked the intense Japanese practice schedule, and the Carp denied him a salary increase from $45,000 (the league's minimum) to $180,000 per year. Like Nomo and Irabu, Soriano hired Nomura to help his situation. After first attempting to void Soriano's NPB contract by unsuccessfully arguing that the player was legally a minor when he signed it Nomura advised him, like Nomo, to retire from NPB and pursue a career in MLB. This prompted Carp executives to file an injunction against Soriano and send letters to MLB teams demanding that they cease all negotiations with him. NPB officials claimed that after the Nomo case they had privately amended the Player Contract to give NPB teams the right to prohibit a player from signing a new contract anywhere after voluntarily retiring. Since MLB officials were not consulted and they did not agree to any changes, MLB Commissioner Bud Selig declared that MLB would recognize Soriano as a free agent on July 13, 1998, and the Carp backed down. He signed a 5-year, $3.1 million contract with the New York Yankees the same year.

In 1998, Orix BlueWave general manager Shigeyoshi Ino rewrote the 1967 United States – Japanese Player Contract Agreement, when he drafted the "posting system". Selig and NPB Commissioner Hiromori Kawashima signed this new agreement in December 1998. It sought to address each of the problems brought up by the Nomo, Irabu and Soriano cases, by requiring MLB teams to place "bids" for NPB players. These bids became the basis of transfer fees that are paid as compensation to NPB teams whose star players sign with MLB. NPB players are also allowed to negotiate with MLB teams over the terms of their new contracts. Through the 2013 season, the agreement was in effect on a year-to-year basis, terminable at the option of either the MLB Commissioner or the NPB Commissioner provided notice to terminate is given by June 18 of any given year.