ASK BA: Can A Team Promise Otani A Lucrative Extension?

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Q:Is there any rule in place prohibiting a team from, during negotiations for his signing bonus, offering Shohei Otani an extension on his standard player contract which would pay him a higher sum?

Can a team promise Otani one of the pre-arbitration deals we see all of the time now instantly upon signing?

Brendan Surmeier
@BSUR2193

BA:Not legally.

Legally, the only thing a team can offer Otani is a minor league contract with a signing bonus. And that signing bonus is limited by current international spending pools, which are now a hard cap that prevents any team from spending more than its bonus allotment. Teams can increase their allotment with additional bonus money they have acquired in trade, but that is limited to adding an additional 75 percent to its bonus pool.

So teams will be limited to offering Otani a signing bonus of somewhere between $300,000 (for the 12 teams currently penalized for exceeding spending limits under the old CBA system) and $5+ million (for teams that go out and acquire additional bonus allotment in trades).

This kind of offer is an underpay to Otani of somewhere between $150-200 million compared to what he would receive on the free agent market considering Otani’s stuff (a 100+ mph fastball), track record in Japan and his age (23).

But any promise beyond that is prohibited by the current collective bargaining agreement. In fact, the current CBA goes in extreme detail to try to list some of the examples of ways a team could try to circumvent the bonus restrictions and bans all of them. It also states that these examples are a non-exclusive list, so any new ways of working around the bonus limits could also be ruled illegal.

Those restrictions even include a prohibition on promising Otani a spot on a major league roster by a certain date. It also prohibits any agreement to void the contract or release the player in the future so he can get a larger deal. And it explicitly says it’s illegal to offer any promise of a larger contract in the future.

But that doesn’t mean it won’t happen. As long as those conversations are only verbalized between agent and team, it would be hard for anyone to prove that any extension announced after a suitable amount of time has passed in Otani’s MLB career was simply an extension to buy out one or more years of free agency for Otani.

But no such deal would be binding. If Otani performs as expected, it would be hard for MLB to use a contract extension as proof of a pre-existing agreement. But if Otani was injured or failed to perform, such an extension would be harder to explain.

There is one thing teams could offer. Nothing in the CBA prohibits a team from promising that they would allow Otani to hit and pitch. So Otani can choose to ensure he joins a team that is willing to let Japan’s Babe Ruth try his hand at hitting and pitching in the U.S.

None of these signing restrictions would be in effect if Otani waited to come to the States until after he turns 25 during the 2019 season. If he did, he could sign a massive free agent deal immediately and he would be allowed to include a wide variety of contract tweaks including those that could allow him to reach free agency again before he had spent a full six years on an MLB roster.

It bears repeating. If Otani decides to come over the U.S. this year, he is doing so in spite of a system that is heavily weighted towards keeping him in Japan for two more years. Financially, he’s giving up many millions of dollars.

So if Otani does comes to the States this offseason, some team is going to win the lottery. He’ll be signing a deal that is well under market value, giving a team a potential big league ready ace at a cost that’s less than what teams spent for B-level Cuban prospects under the previous CBA.