Yu Darvish – Bargain?
One hundred and seven million, seven hundred and three thousand, four hundred and eleven dollars. $107,703,411. That is the guaranteed amount of money the Rangers are debiting from their checking account in order to see Yu Darvish button on a number 11 Rangers jersey for the next six years. The final amount could even go up from there, if Darvish achieves some high-performance incentives built into the deal. That is more money than the Rangers have committed to paying for one single player since the famed Alex Rodriguez deal, and makes Darvish only the sixth pitcher in baseball history to cost more than $100 million.
I am not an advocate of the posting system that brings most Japanese professional baseball players to the MLB. I think it is an extremely inefficient process that does not favor the player, or the MLB team. The posting fee ($51.7M in the case of the Rangers/Darvish) should go to the player, or be used by the MLB team to sign other players. Instead, that money is paid in full to the posting Japanese club within 5 days of a contract agreement being reached.
Even in light of the inefficiency of the posting process, and despite the heavy 9-digit price tag, I think the Rangers found themselves a bargain in the acquisition of Yu Darvish in this offseason.
The timing of when players make their money in Major League Baseball is oftentimes seemingly backwards. For instance, this offseason, we have seen enormous contracts given to Albert Pujols and Prince Fielder. However, the majority of the value for those two players has come and gone. They are either at their peak, or their skills are already on the decline. Despite their best days being in the rearview mirror, of the money they will make in their entire career, 70%+ (Pujols) and 86%+ (Fielder) will come from this point forward. That is what you might call diminishing returns.
Darvish projects to be a solid #2 MLB starter, with an outside chance of being a #1. Two other players were signed as free agents this offseason with similar descriptions of their place in a rotation: C.J. Wilson and Mark Buehrle. Including the posting fee, the Rangers are set to pay Darvish an AAV of $17.95M. Wilson signed a contract with the Angels for an AAV of $15.5M, and Buehrle’s deal with Miami was for an AAV of $14.5M. This puts the Darvish price tag at a 24% and 16% premium, respectively. So how can Darvish possibly be a bargain? As you likely know, Wilson is 31 years old, and Buehrle will turn 33 this season. Both pitchers are hitting that state of diminishing returns. On the other hand, the Rangers will have Darvish locked up for ages 25 – 30, the prime of a pitcher’s career. Instead of paying top dollar for what a player HAS accomplished, the Rangers are choosing to pay top dollar for what Darvish WILL accomplish.
Furthermore, the price tag of Darvish does not come with an offsetting cost of damaging the quality of the Rangers minor league system. The acquisitions of Wilson and Buehrle cost their new teams their first draft pick in the upcoming amateur draft. And this most certainly didn’t cost the Rangers a bounty of prospects like the Reds, Nationals, and Diamondbacks had to pay for Mat Latos, Gio Gonzalez, and Trevor Cahill (respectively). Each of these three pitchers who were traded also project as a #2, maybe a #3 pitcher in a solid rotation. A prospect or a draft pick can only be given away or traded once. The Rangers lone sacrifice for acquiring Darvish was cash, and when the turnstiles start rolling on April 6, 2012, that cash will start replenishing once again.
Beyond the on-field benefits, the costs of the Darvish signing will be significantly offset by apparel, ticket sales, and more. The Rangers will cross the 3,000,000 attendance mark for the first time this season, I guarantee it. And Darvish will have played no small part in that. Not only is he an international star with huge marketing potential, he makes this team better on the field, and nothing draws the crowds in like a winning club.
There are risks that come with Darvish, certainly. No pitcher from Japan has ever lived up to his total price tag. That is not to say none have ever been successful, merely that the costs have outweighed the benefits. Darvish, however, is not your typical pitcher from Japan. He is a physical specimen at 6-5, 225 pounds. He is a committed workout junkie. He understands that he will need to pitch more “American” to succeed in the MLB. And, he wants to be the greatest pitcher in the world. Despite all this, the charisma and self-depreciating humor he displayed at his opening press conference signaled that he will also be a good fit in the Rangers clubhouse.
The fact that the Rangers signed Darvish is a banner day for this organization. This team’s owners, scouts, coaches, and front office all played a part in bringing number 11 here. It also exponentially expanded the size of the Rangers family and fan base. Wholeheartedly, I welcome the new multitude of Rangers fans that reside in Japan, and across the world.
There is much talk of finding the new market inefficiency in the aftermath of the Moneyball era we live in now. Perhaps the Rangers have found a market inefficiency within the inefficiency of the posting system. With this front office, I suppose we really shouldn’t be surprised. Once again, they have demonstrated their commitment to constructing a franchise that is prepared to win, and win for many years. This time they did it by surveying the landscape of their environment, and then finding a $107 million bargain.