Shohei Otani one step closer to MLB, but many questions remain

Arden Zwelling joins Tim and Sid to discuss his time in Japan covering Shohei Otani, who he touts could become the next Babe Ruth due to his incredible pitching and hitting ability.

Shohei Otani, the two-way phenom believed to be the best player on the planet not currently in MLB, reportedly cleared another hurdle on Monday in his pursuit of changing that, hiring a North American agent. According to Dylan Hernandez of the Los Angeles Times and Ken Rosenthal of The Athletic, Otani has hired Creative Artists Agency (CAA) Sports to represent him in the U.S., with Nez Balelo serving as his point man.

CAA is one of baseball’s biggest agencies, boasting a strong stable of elite MLB talent like Adam Jones, Buster Posey, Ryan Zimmerman and Ryan Braun. The agency also has a history of representing Japanese players, including Junichi Tazawa, Nori Aoki, and Takashi Saito. Balelo is CAA’s lead agent for Aoki, Braun and Jones.

This is an important step for Otani, who had been working only with a Japanese lawyer prior to this point. His hiring of a North American agent — Balelo is based in Los Angeles — is a clear indication he’s moving towards being posted and joining an MLB team for the 2018 season.

But the path to that happening still features a significant roadblock. MLB’s posting agreement with Nippon Professional Baseball expired this month, meaning there is not currently a system in place for professional players to transfer from Japan to North America. And according to Joel Sherman of the New York Post, Otani himself is the primary barrier to getting a new deal done.

MLB and MLBPA were reportedly working to adjust the system to one that saw the posted player’s Japanese club receive a percentage of the contract the player signed in MLB, likely in the neighbourhood of 15-20 per cent. But Otani’s NPB club, Nippon-Ham Fighters, has understandably balked at this suggestion, lobbying to have Otani posted under the old rules, which would see them receive a $20-million posting fee.

It’s a big financial difference for Nippon-Ham. Due to the MLB collective bargaining agreement finalized last off-season, players under 25 are subject to international bonus spending restrictions, which means the highest signing bonus the 23-year-old Otani could earn this off-season would be around $10 million. But most MLB teams have already spent much of their international budgets this year (and some are restricted from signing a player for more than $300,000 due to past overages), meaning Otani’s actual signing bonus could be far less, further marginalizing Nippon-Ham’s cut.

According to Sherman, MLB is willing to make an exception for Otani while MLBPA has withheld its approval. He also notes that the union has attempted to communicate with Otani but has had trouble doing so. Otani’s hiring of CAA should help change that. But it’s still unclear how long it will take for a new posting system to be put in place.

All this consternation could be avoided if Otani waited until after the 2019 season to be posted. At that point, he’d be 25 and no longer bound to international signing rules, meaning he could ink an incredibly lucrative deal with an MLB team.

By that point, it’s likely that the elite free agent class of 2018-19 — which includes some of the game’s best players like Bryce Harper, Manny Machado, Josh Donaldson and Clayton Kershaw — will have significantly boosted the going rate for top talent. Assuming he remained healthy and similarly productive over the next two seasons, Otani would be in line for a nine-figure payday, with a $300-million contract potentially the starting point in negotiations.

But that’s not the direction Otani’s taking. “Personally, I don’t’ care about money,” Otani said in an interview with Sportsnet early this year. He exists extremely frugally in Japan, living at team residences and wearing sweats over suits. Not only does he not own a car, he doesn’t even have his driver’s license. Unless he makes some significant lifestyle adjustments, he’s likely made enough money in Japan already to keep him happy for the rest of his life.

MLB teams certainly aren’t complaining, as all 30 can, and should, get a seat at the table if Otani is posted this winter. Considering the absolute most it would cost to ink Otani would be the $20-million posting fee (which could be even lower if Otani isn’t given an exception under the new system), a strictly-capped signing bonus of no more than $10 million and potentially as low as $300,000, and a major-league minimum salary of $545,000 in his rookie season, even MLB’s lowest spenders could likely make the case to ownership considering Otani’s tremendous talent and marketing potential.

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Of course, it stands to reason that Otani would want to go to a team that can ink him to an exorbitant extension sometime down the line. But if he plays as well in MLB as he has in NPB, he’ll earn significant salaries through arbitration anyway, and would hit free agency in his prime. Otani also hasn’t taken full advantage of his endorsement and marketing potential in Japan to this point, and could find plenty of lucrative avenues for supplementary income if he becomes a star in MLB.

What exactly Otani desires in an MLB team remains a bit of a mystery, but he said in his interview with Sportsnet that he’d like to continue playing both ways, which could make an American League club more tenable due to the presence of the designated hitter. If he went to the National League, Otani would have to play the outfield if he wanted to hit on days he wasn’t pitching, which would expose him to more injury risk.

But it’s worth noting the NL’s Los Angeles Dodgers are believed to have had an agreement in place with Otani when he was a high schooler that would have seen him jump straight to North America as a teenager. Otani made an 11th hour decision to stay in Japan after he graduated, as Nippon-Ham, led by then general manager Masao Yamada, made a creative and convincing pitch that he should spend some time in NPB first.

The Dodgers front office has completely turned over since that point, but Otani’s prior relationship with the organization has to be worth something, and the Dodgers were quietly doing due diligence on Otani early in the 2017 season, expecting him to be posted prior to 2018.

Of course, with posting rumours picking up throughout the season, many other teams have done their homework on Otani this year as well, including the Toronto Blue Jays, who sent several executives to Japan to scout Otani this summer.

A prior history with Japanese players is believed to be of importance to Otani, but perhaps not a deal breaker. He is a reserved individual, which may influence him away from a big media market. But it’ll be hard for Otani to find a level of spotlight in North America comparable to what he receives currently as the best player in Japan.

The opportunity to win could be a strong factor. Otani is coming to MLB now and forgoing as much money as he is because he wants to compete against the best. He’s a gym rat who has obsessed over the game of baseball since he was child. It stands to reason that he’d prefer to join a competitive club that intends to be in contention in the near future.

Otani also has a very strong bond with Yu Darvish, who he’s worked out with during past off-seasons. After finishing the year with the Dodgers, Darvish is a free agent himself, and his signing decision could affect Otani’s.

Or it could not. We’ll see. All that’s certain is whichever team signs Otani will be acquiring a potentially franchise-changing player. Injuries limited Otani in 2017, but he was worth around 10 wins above replacement in 2016 between both his pitching and hitting. That kind of impact is impossible to find on the open market for the rate Otani will be paid.

It’s believed that the level of competition in Japan is a little better than triple-A and a little worse than MLB, which means that Otani’s numbers would likely suffer slightly in North America. MLB baseballs are also a little bigger than the ones used in Japan, with less pronounced seams, which inevitably leads to an adjustment period for Japanese pitchers making the jump overseas.

Still, even if you handicap Otani’s numbers by 30 per cent, you’re left with a seven-win player. Only four MLBers — Jose Altuve, Aaron Judge, Chris Sale and Corey Kluber — put up seven-win seasons this year. It’s not crazy to assume Otani’s floor could be that of an all-star player. And his ceiling could be the best player in the game.