FanPost

"Overpaying" for Darvish

Rumour has it that the winning bid for Yu Darvish was in the $50 million range (rumour also says that the Jays were the winner, but we will see!)

There was a lot of discussion before the posting about the wisdom of paying big bucks for Yu. The consensus was that it would take a combined $120 million-ish for a 6-year commitment, including the posting fee and the contract itself. That works out to $20 million per year - Roy Halladay money for someone who is unproven at the MLB level.

The point was also made that the higher the posting fee, the less likely it was that Darvish would sign.

So why would a team - whether the Jays or someone else - spend that much money on the posting?

I see several good reasons:

  • The posting fee is fully refundable if the player does not sign. More than one writer has commented on the leverage that Yu has, in that he is willing to go back to Japan. But the team with exclusive negotiation rights has leverage too. In the worst case scenario, all the bidding team has lost is some time ... and Yu has acquired the reputation of being greedy
  • There is even a benefit to a team overbidding on the posting fee and failing to sign, in that Yu will not be playing for any of their opponents that year. In a sense, keeping your opponents from getting better accomplishes the same end as making your own team better.
  • The potential exists for a sign-and-trade if (for example) Yu insists on playing for a West Coast team. A winning team with a bit of cash flexibility could agree to a sign and trade that does not fully recover the posting fee paid in exchange for an elite prospect or two - effectively "buying" those prospects
  • Even if Yu does not force a sign-and-trade, a trade might still make sense. The Yankees are said to have offered Montero, Nova and Betances for Felix Hernandez. Would they make a similar offer for Darvish, and if so, would a rebuilding team be tempted?
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