Tag Archives: CBA

NPB’s salary structure

Japan doesn’t have a CBA, but it does have a charter, the “Pro Yakyu Kyoyaku,” approved by the 12 teams, that establishes its operating rules. Japan’s players’ union has the right — thanks to Japan’s fairly liberal labor laws — as opposed to its often draconian labor customs — to approve changes to their working conditions.

Years ago, former NPB star Leon Lee grumbled how hard it was in his then job as a scout for the Chicago Cubs to sign hungry Japanese players, and a large reason for that, he said, are the good working conditions of Japanese pro ballplayers — even those who are not yet ready for action at the top level.

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Taking care of the kids

There are three tiers of NPB players. The lowest tier is comprised of players on non-roster developmental or “ikusei” contracts. These have a minimum salary of 2.4 million yen ($21,000) a year, cannot be activated to play in first-team Pacific and Central league games but can play in official minor league games in the Eastern and Western leagues. These players do not count against each team’s 70-man organizational roster.

They can, however, be signed to a uniform NPB contract with a 4.4 million yen ($40,000) minimum salary, where they can be activated to the first team, but do count against the 70-man roster. Teams can only reserve players on developmental contracts for three years.

Each team can also have up to 29 players on its first team active roster – although only 25 are game usable on any given day. These players’ salary – if under 14.3 million yen ($128,000) are raised to that amount every day they are on the active roster. In 2020, that goes up to 16 million yen ($144,000).

In addition to living wages, young players have access to room and board at team dormitories, weight rooms and training facilities.

No need to sugar coat it

The Nippon Ham Fighters easily secured the negotiating rights to Shohei Ohtani at NPB’s 2012 amateur draft because the 11 other teams assumed he would sign his first pro contract with a major league team.

So five years before a host of MLB teams mapped out plans to secure Ohtani’s services, the Fighters did the same. A huge part of that was an explanation of what it meant to sign a minor league contract with a major league team, the pay, the working conditions and the cultural difficulties. The club also pointed out the relatively poor record of Japanese athletes who had turned pro overseas.

The Fighters approach, which included an opportunity to pitch and hit, and supposedly an offer to be made available to the majors via the posting system, eventually swayed him.

For a young Japanese player of exceptional talent, the advantages of turning pro here are numerous, since you can make a side deal with teams that is not made public and could include about anything under the sun as long as it does not violate the game’s fundamental rules.

The Japanese way

In MLB, minor league salaries and major league minimums are strictly monitored to make sure clubs don’t engage in private deals that would violate the terms of the CBA that limit the bargaining power of amateurs.

Japan has similar rules for first-year players, but after that teams can pay their players whatever they like. First-year players coming out of the draft are limited to:

  • 100 million yen signing bonus ($900,000) *
  • 50 million yen in incentives *
  • 16 million yen in salary

*-The signing bonus and incentive caps are limits agreed to by the teams that have not been formally added to the baseball charter and thus are not technically “rules.”

Until recently, it was customary for teams to exceed the signing bonus limits by paying cash under the table. In 2006, then Lotte Marines manager Bobby Valentine hit out at teams violating these “guidelines.” Shigeru Murata, then secretary general of the Pacific League estimated at the average first-round draft pick in NPB was getting in the neighborhood of $2.5 million under the table.

See also “NPB under the table.”

Players ineligible to enter through the draft, primarily foreign nationals who have not played amateur ball in Japan, have no salary restrictions. This allowed the SoftBank Hawks to sign Carter Stewart Jr to a six-year $6 million deal last summer.

Under-the-table deals and private personal-service contracts are how NPB teams do business with players. These can even include a promise to be posted to the big leagues in the future. All multiyear deals follow this pattern in that they only specify the ways in which the official salaries will be calculated in future one-year official contracts filed with NPB.

Because these deals are not spoken about, it is common for top team executives to be unaware of their details. And because annual salaries are reported only to NPB and the players union — for union members — the estimates in the media are simply what reporters are told by the teams or the players and often don’t reflect reality.

The sky’s the limit

Once players are under contract, however, the teams are allowed to raise their salaries as much as possible. This being Japan, teams are expected to reward big seasons by players on one-year contracts with large pay raises and no one asks questions.

The Central League’s 2019 rookie of the year, slugging first baseman Munetaka Murakami, entered that year, his second, under the first-team minimum, making 8 million yen ($72,000). His 2020 salary has been reported at 45 million ($405,000), well more than double the first-team minimum.

— For another take on this phenomenon, see “Marvin Miller’s legacy and Japan.”

The only limitations on salaries have to do with pay cuts and minimum salaries.

Players earning 100 million yen ($900,000) can be forced to take pay cuts up to 25 percent, while those earning more than 100 million yen can be forced to accept 40 percent pay cuts. Players offered pay cuts in excess of those figures can opt to be released so they can sign with another team.

Arbitration

Japanese players have the option of arbitration as early as their second pro contract provided he and the team have been unable to agree on a figure for the following year.

The commissioner must form an arbitration committee upon receipt of a request. The player signs a blank contract and is considered signed, with the amount to be filled in within 30 days of receiving the request for arbitration. The player and team each submit a figure and after hearing from one representative from each side the committee submits its decision.

In the seven arbitration hearing since the Hanshin Tigers’ Leon McFadden became the first filer after the 1972 season, the team’s figure was accepted four times. The committee once selected a figure closer to the team’s, and twice slightly closer to the player’s. No figure submitted for a player has been approved.

While Ryozo Kato will forever be known as the commissioner who lost his job because a disloyal subordinate secretly orchestrated changes to NPB’s official balls in 2013, the teams were eager to get rid of him after he introduced third-party arbitrators in the hearing for Seibu Lions pitcher Hideaki Wakui.

While the Lions didn’t actually lose, Wakui’s final salary was far closer to the one he’d requested than any in history. The Lions lost because outsiders listening to Seibu’s unsupported statement “Wakui pitched poorly down the stretch,” looked at the evidence and determined the claim was without merit.

The Lions could have argued that Wakui’s performance had dropped off from his previous norms, but instead, they pulled something out of their butts and Japan’s owners were dumbstruck when non-baseball people rejected the unsubstantiated claims of baseball insiders.

Deadlines

Here are some dates and deadlines you need to be aware of:

  • Spring training starts: Feb. 1
  • Last day to add non-waiver players to rosters: July 31
  • Free-agent filing period: 7 business days, starting the day after the conclusion of the Japan Series.
  • Contract tender deadline: Dec. 2

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Carter Stewart can change the world

Carter Stewart hasn’t thrown a baseball in anger as a member of the SoftBank Hawks, but his arrival in Japan, as the first big-name American amateur to turn pro with a Japanese team, could cause a ripple effect through baseball’s labor markets. It could mean an end to the posting system or more money for U.S. amateurs from MLB.

Say it again: “This is MLB’s fault”

Although the Hawks signing Stewart is news, it is not a new story. His signing is made possible by MLB and its union conspiring to deprive amateur players of the right to fair value for their service, and MLB’s choice to further clamp down on the below-subsistence wages paid to minor league players.

Without those two factors, no Japanese club is going to spend what it would be worth to lure a top amateur to NPB, at least not as long as the economic structure in NPB continues without significant change.

But with MLB’s draft signing pool bonuses, draft slot values, and the criminal level of pay in the minor leagues, Japanese teams can now pay the best American amateurs less than they’re worth but vastly more than MLB clubs can.

Sure, there’s a limit on having four players on each team’s active roster in Japan, but NPB clubs could theoretically have up to 52 foreign players under contract, not including those on developmental contracts, who don’t count against each organization’s 70-man official roster.

Japan was in a similar bind 25 years ago

A quarter of a century ago, Nippon Professional Baseball’s owners were bullied into allowing the Yomiuri Giants sign their big name veteran stars by agreeing to the introduction of free agency after the 1993 season.

What was intended as a way for the country’s biggest-name franchise to enrich itself at the expense of its business partners became something else altogether within two years. The free agent system was predicated on owners’ belief that competition in the majors was too hard for Japanese players.

Unfortunately, for the NPB owners, that belief was proved wrong in the most dramatic fashion by pitcher Hideo Nomo.

Jean Afterman, then working with Nomo’s agent Don Nomura, found the loophole needed to punish NPB for its arrogance. Because NPB rules considered Japanese players to be inferior and incapable of playing in the majors, they were permitted to play abroad after retiring in Japan.

So Nomo “retired” and became Japan’s first free agent import to the major leagues. Although NPB closed that loophole within a few years, the free agent route that was meant to enrich the Yomiuri Giants with Japan’s top talent, soon became a highway for Japanese stars to leave for the major leagues.

This could be something big — or not

The question then is whether this type of deal will become a supply line for Japanese baseball to upgrade its talent base at the expense of MLB.

In order for that to happen, Japanese teams will need to handle the players and develop them in a sustainable relationship with MLB so the international rules don’t change at the whim of MLB and its union.

The Japanese side of the equation

The SoftBank Hawks were perfectly placed for this kind of venture. They have the money, the infrastructure, the patience, and the will. Since SoftBank’s founder Masayoshi Son took over the club in 2005, he has aspired to field the world’s best baseball team and has frequently pestered his staff to sign the biggest names available.

Son has repeatedly challenge major league owners to an international championship series between the NPB and MLB champs, something that will happen the second MLB owners think it’s profitable.

The Hawks have invested heavily in development and in their medical side. While other clubs expect first-year pros to make an immediate impact, Hawks newcomers have to slog their way through an impressive logjam of minor league talent to even get a shot at the top.

The Hawks are an exception, but with the will, a few other teams, the PL’s Rakuten Eagles and the CL’s Giants, Hiroshima Carp and DeNA BayStars could join them in a true money ball campaign — exploiting the sizeable gap between what MLB requires amateurs be paid and what they are worth to Japanese teams. In 2023, when the Nippon Ham Fighters open their new stadium outside Sapporo and begin generating huge amounts of revenue, they could become players as well.

The Carp probably won’t go down this road, although they are well situated to expand into MLB’s Dominican Republic player pool because of their academy in that country. Hiroshima is focused on recycling talented players who fail in their first shot with big league clubs but are not willing to see their baseball dreams die.

But for now, it’s just the Hawks.

The MLB side of the equation

The market solution on the MLB side is to increase the amount of the signing bonus pools and draft slot allocations so that those amounts at least equal the value of those players to NPB teams — eliminating the demand for those players by raising the prices.

But that’s not what MLB does, and doing so would require negotiations with its union to alter the details of the CBA.

The posting system, however, is not included in the CBA. Though the agreement must conform to the CBA and the union must sign off on it — as it did in December 2017. But because either MLB or NPB can back out of the deal with a few months notice, it’s an easy way for either side to fire a shot across the bow.

With the union’s cooperation, MLB could also take more drastic measures, such as instituting its own “Tazawa Rule” — named for Junichi Tazawa, because it effectively banned him from playing in NPB because he turned pro with the Boston Red Sox rather than submit to NPB’s draft. MLB could banish players who turn pro in Japan, but that seems like too drastic of a solution, and the Tazawa Rule hasn’t prevented Japanese from following his path.

The posting system

Ironically, punishing the Hawks by eliminating the posting system might be part of SoftBank’s grand plan, since the club has never used it and is opposed to its existence. That being said, the Hawks can use the posting process as part of their plan with Stewart.

If the deal is for six years, from June 2019 to June 2025, Stewart will qualify as an international free agent under current rules on Nov. 3, 2024, exactly when the posting period begins. If Stewart develops and has value, he will have options. SoftBank being SoftBank, they’d prefer Stewart to stay in Japan and sign an extension, but without an extension, Carter would be able to move to the States as a free agent when his contract expires.

Using the posting system prior to the 2025 season would allow the Hawks to recoup all the costs incurred with signing and training Stewart and essentially get paid to benefit from all his contributions. It’s also the reason why other clubs might jump on this train. They could make a profit signing and posting American amateurs, and eliminating the posting system would put a damper on that part of the business.

Still, the Hawks would be happy to see the posting system gone, because if it remains in place and Stewart has that option, SoftBank will have a hard time denying the requests of its Japanese stars, read Kodai Senga, who want to leave early.

But sooner or later, the Hawks are going to have to fall in line and post players if the system remains in place. That’s because at some point they’ll want to sign a player who will only work for a club that promises an early exit to the majors, read Roki Sasaki.null

The Shohei Ohtani example

Shohei Ohtani is one reason why MLB would like to weaken the posting system and raise the age of international free agency. If Japan’s best amateurs think it’s easier to get to the majors through free agency by going through NPB and the posting system, it will be even harder for MLB to sign kids like Roki Sasaki, which is the big league’s ultimate wet dream.

Being major league baseball, they think no one can teach professionals the way they can be prepared through in the minor leagues with all the soul-sapping crappy treatment that entails. But the real reason is the control that comes with signing amateurs. MLB is all about control, if it weren’t we wouldn’t see blatant service time manipulation.

If Japanese teams could take the best high school stars and promise to post them at the age of 23 so they could be international free agents, everyone would benefit, the NPB teams, the players, MLB. The only thing it would cost the MLB teams is control, and they put an awfully high value on that.

The problem is that by worrying so much about control, MLB guys lose sight of one fact, that Japan is a great place to learn how to play baseball.

The advantage of a Japanese education

There are things players won’t see in Japan, like a lot of 100 mile-per-hour fastballs, but other than that, you name it and Japanese baseball has it.

When a player ventures out of the minors and into Central and Pacific league, he faces some incredible pitchers, guys who can locate their fastball and then use NPB’s stickier baseball to throw some of the wickedest breaking balls in the world. Because the talent depth is thinner, there are pitchers who lack command and control, too, guys who throw more fat pitches that can be exploited.

“A lot can be gained from playing here. Playing in Japan is a great way to develop a hitter. Look what happened with Shohei Ohtani. He’s an elite hitter and an elite pitcher. That couldn’t have happened in the States.”

Former Detroit Tigers and San Diego Padres GM Randy Smith

For a pitcher, there is less pressure from lineups where every batter is trying to take you deep, but those batters are there along with guys who can foul off one good pitch after another, and are really, really hard to strike out.

Players also get used to playing in pressure situations in meaningful games in front of large crowds. If minor league baseball are less meaningful because one goal of every player is to get promoted, NPB games are more meaningful because they are all about winning, and there is value in that.

The other side is the fanatical amount of discipline and practice, which can be a good thing if a player embraces it. Another advantage is a good diet, a place to live in the team dormitory, a healthy diet and easy access to training facilities.

What this means for Carter Stewart

It means an opportunity to learn more about pitching than he would ever learn in the United States. If there is a weakness in the Japanese system, it is that so many talented pitchers never survive the nation’s old-school youth baseball traditions.

Some NPB training methods are obsolete, and most pro coaches tend to teach players to follow established models rather than find what works best for them as individuals. In that, however, there are messages worth learning if one can handle the often authoritarian way in which those messages are delivered. If Stewart can handle that, remain humble, remember that he is coming to learn and improve, he will excel to the degree he is physically and mentally able to handle.

Simply by reaching out to Stewart, the Hawks have instantly changed the way MLB views Japan since this is something it considered impossible. If Stewart succeeds and comes out of this as a world-class player, that will be a further shock to MLB owners who have shown little but disdain for Japanese baseball.