Shohei Otani is Coming to America. What does it mean for the White Sox?

Shoehei Otani is one of the best baseball players in the world. The Japanese star is 23 years old and is apparently ready to come to Major League Baseball according to Jeff Passan of Yahoo Sports. He can throw over 100 mph as a starting pitcher and possesses light tower power in the batter’s box. Otani plays for the Hokkaido Nippon Ham Fighters and is often referred to as the Japanese Babe Ruth. They play in the Nippon Professional Baseball League, which is considered by some to be the best league in the world outside of the United States. Otani posted a 1.86 ERA while striking out 174 hitters in just 140 innings last year. He also hit .322/.416/.588 and belted 27 home runs. This two-way player could be a transcendent, once-in-a-generation star. He would add tremendous intrigue to the offseason and dramatically improve a lackluster crop of free agents.

Want to see what all the fuss is about? How about some videos…

Here is Otani hitting a mammoth home run at the Tokyo Dome

Here are some highlights of Otani’s 2016 season

Otani interview with J.P. Morosi courtesy of MLB Network

What Is He Giving Up?

Most fans and media members assumed that Otani wouldn’t be coming to the United States for at least two more seasons. At 23, Otani is subject to the hard-capped nature of the new MLB Collective Bargaining Agreement. In this agreement, the owners and player’s union decided to deprive the little man in this case and dramatically decrease spending on international amateurs. A player of Otani’s caliber would likely earn a contract in excess of $200 million if he were a true free agent.

But under the new rules, any player under the age of 25 is considered an international amateur and is forced to take a contract well-below what a free market would dictate. MLB teams have been allocated between $4.75 and $5.75 million to spend internationally in a given year. Large market teams have a budget of $4.75 million while small market clubs have the right to spend up to $5.75 million annually. Clubs can trade their entire bonus pool if they choose but cannot acquire more than 75% of their total pool. This means that large market clubs such as the Yankees and Red Sox can acquire roughly $3.5 million in international space for a total of $8.3 million. There are also 11 clubs that are in the penalty phase in regards to international spending and they can’t allocate more than $300,000 for any player – including the White Sox.

The following clubs are in the penalty phase and can’t offer more than $300,000: Atlanta Braves, Chicago Cubs, Chicago White Sox, Cincinnati Reds, Houston Astros, Kansas City Royals, Los Angeles Dodgers, Oakland Athletics, St.Louis Cardinals, San Diego Padres, San Francisco Giants, and Washington Nationals.

Here is what the other clubs have available to spend (and could spend if they acquired max space from other teams) based on their pools minus reported signings to date in the current J2 period, in order of available money:

  • Colorado Rockies: ~$3.5M, could go as high as $8M
  • Cleveland Indians, Pittsburgh Pirates: ~$2.5M, could go as high as $7M
  • Texas Rangers: $2.5M, could go as high as $6M
  • Miami Marlins: ~$2M, could go as high as $6.5M
  • Detroit Tigers, Los Angeles Angels: ~$2M, could go as high as $6M
  • Arizona Diamondbacks: ~$1.5M, could go as high as $6M (have already traded for space, amount unknown)
  • Seattle Mariners: ~$1.5M, could go as high as $5M
  • Milwaukee Brewers, Minnesota Twins: ~$1M, could go as high as $5M
  • New York Mets, Philadelphia Phillies, Toronto Blue Jays: ~$500k, could go as high as $4M
  • Boston Red Sox, New York Yankees: Appear to have used full pool, but also traded for space, amount unknown, so max maybe $3M
  • Baltimore Orioles***: Had $5.75M to work with, made no notable signings, but also traded away some pool slot. Impossible to say here.

Which Teams are Interested?

All 30 major league clubs most likely have some level of interest in Otani. Some clubs are in a better position to sign him than others are however and we also have no idea what Otani is looking for. Passan reported that the Asian star almost signed with the Dodgers out of high school and that the Cubs “covet” him. He also mentions that the Padres and Rangers in addition to the Astros have spent time scouting and “strengthening their relationships” with the two-way phenom. But many of those teams (all but the Rangers) are capped at $300k for this period.

Rosenthal reported in August that 13 teams sent scouts to see Otani pitch in Japan. The Boston Red Sox and New York Yankees are often rumored as potential landing spots for the right-handed ace. Boston and New York have added international bonus pool space in the current period and could still acquire more. The problem for them is that both clubs have already spent roughly $5 million on international prospects this period. Otani could still choose to play on one side of the American League East rivalry but it would be for a bonus of around $3 million. The Cubs, Dodgers, Nationals, and Reds also sent representatives to see him pitch but those teams can’t offer Otani more than the penalized limit of $300,000 as a bonus.

Teams like Colorado, Cleveland, and Pittsburgh can offer Otani the most money initially out of all the teams with scouts present at his game. The Orioles may be able to out-bid even those, but having traded away some slot money we don’t know how much is actually left. They are also rarely major players for international amateurs.

How This Pertains to The White Sox

It’s highly unlikely that Shohei Otani ends up pitching at 35th and Shields in the near future. The White Sox were not one of the clubs mentioned by Ken Rosenthal that were in attendance for a recent start overseas. They are restricted as to how much money they can spend on the international front for the next two years. The club went over its bonus pool allotment during the 2016-2017 signing period in order to obtain Luis Robert and now will incur two years worth of penalties. As a large market club the Sox have a bonus pool of $4.75 million to spend on international amateurs during the 2017-2018 signing period that started on July 2nd, but they are still prohibited from signing any international prospect under the age of 25 for more than $300,000. The club has used some of its available international bonus pool to acquire prospects from other teams looking to increase their bonus allotment. The Sox acquired infielder Yeyson Yrizarri in a trade with Texas and RHP Ryan Burr in a deal with Arizona. It is expected that the organization will continue to use their bonus pool space to acquire prospects from other teams.

Here’s where the Otani sweepstakes more likely helps the Sox. The sheer amount of clubs that would like to sign Otani creating a bidding war, making yet one more team that won’t have big cash to spend in the region for a while. More directly, the Sox could theoretically auction off the remaining international bonus pool space that they have left and possibly land better prospects in return since the drive for cap space will increase the value of that pool capacity. This could be a big silver lining in regards to the club not really being a factor in the signing process. It is likely that the organization would love to add a player like Otani to their team as early as 2018. It’s just not that realistic based on the situation that the White Sox have put themselves in.

I would expect Rick Hahn, Marco Paddy and his staff to check in on Otani but actually landing him would be a true shock. It is possible that Otani would love to live in Chicago, start every 5th day and be used as the Designated Hitter when he’s not pitching, but would have to accept a bonus of $300,000 to do this though and that’s just not in the cards. Ideally, they can use the desperation of other interested parties to their advantage.

What Will Otani Do?   

The Shohei Otani sweepstakes will be a fascinating process to watch as it unfolds. There are many teams that will be interested and a number of them are currently jockeying for position. The most interesting part of this undertaking is that nobody truly knows what Otani’s main objective will be, since the top money offered will all probably be in the same ballpark. Does he want to win? Does he want to be in a large market? Does he want to be in a small market? Does he want to definitely pitch and hit? Does he want to recoup as much money as he can even though it’s been reported to the contrary?

These are all captivating factors to be ironed out if he indeed comes stateside this winter. Teams that want him will negotiate a posting fee with his Japanese club that likely exceeds $20 million. Once he signs, his major league club will purchase his contract and they will effectively have him for three pre-arbitration seasons and then he will be arbitration eligible after that. By choosing this route, Otani will be foregoing in excess of $200 million if he waited a couple years, but that’s something that reportedly just doesn’t matter to this kid. There is also the risk factor to consider – $5-6M guaranteed now is still a good chunk of change in the scheme of things, with a chance for similar paydays in years four to six and then the really big bucks. Maybe he gets hurt in the next two years, in which case walking away from the table with that $5-6M might not look so bad.

If the hurler wants to be in a large market and get paid upwards of $5 million, The Angels, Rangers and Mariners make the most sense. The Red Sox, Yankees and Philies can all offer him more than the penalty phase minimum but all three clubs currently have dollars already spent elsewhere. If Otani truly wants the most money right away, teams like the Pirates, Indians, Rockies and maybe Orioles can offer it. The Dodgers, Cubs, Astros and Padres are said to be very interested but they are limited to hammering out no more than a bonus of $300,000. This situation should start to heat up after the World Series and we will get some closure on what Shohei Otani really wants in the next few months. It should be a wild ride.

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