Thinking Of Yu

As it currently stands, teams have until 5:00 PM ET on December 14th to make a bid for Japanese pitching phenom Yu Darvish. In the lead up to MLB’s announcement as to who wins the exclusive rights to negotiate a contract with Darvish, we’re bound to hear nonsense rumours about leading candidates to land the potential star.

For the record, it’s rather difficult to be a leading candidate when sealed bids are involved.

There were some suggestions made over the weekend by a certain blogger over at a certain website that the Toronto Blue Jays might be more interested in acquiring a player like Darvish because the terms of his contract, after the payment of a large posting fee, would make him easier to eventually trade than a typical free agent.

With so much of the money earmarked for Darvish siphoned off by his Japanese club, the team who wins the bidding will get him on a much more favourable contract than if all the money the club was willing to spend on him went directly to the player. He’s much less an unmovable asset because of it.

At first glance, this type of justification for acquiring Darvish seems like the exact type of strategy that Blue Jays General Manager Alex Anthopoulos might employ. Fans of the team can likely recount several occurrences in which the GM showed a preference for options, not just the club ones included in contracts, but also acquisitions that allow for the most flexible roster, both now and in the future.

However, does Darvish really represent a more fluid acquisition over other free agents?

I don’t see how.

Too much analysis on Darvish underplays or outright eliminates the posting fee from the equation. That’s simply not an accurate way of looking at any deal involving the pitcher. In measuring cost to value, the posting fee has to be considered as part of the contract because it’s quite literally part of the cost of acquiring Darvish.

Several times over the winter meetings, we compared long-term contracts with mortgages. A well-planned, long-term contract will underpay for the player’s value in the beginning of the deal and overpay for his value in the end. Similarly, at the beginning of a mortgage, the payments mostly cover interest, but as it nears the end, most of the equity gets paid off.

Therefore, we can’t say that such-and-such signing is good now, but it’s going to be bad later. This is what a club agreeing to a long-term deal is expecting. Just as any businessman is aware of the depreciation of the assets he or she is purchasing, front offices are just as aware of the expected declines in players that they’re acquiring.

Given his age and the enormity of the up front posting fee, the mortgage metaphor doesn’t quite work the same way with Darvish. However, claiming that the theoretical lower cost to his contract will make him easier to trade down the line is to totally ignore where the value of a potential Darvish deal is found or, if there is a perceived lack of value to be found, the current practice of sharing the cost of contracts at the back end with trading partners.

The team that signs him to his first Major League contract will still view his deal in terms that include the entirety of it. Because they paid for so much of that value up front, selling on it at the point in which it offers returns on the initial investment would be incredibly foolish.

For argument’s sake though, let’s say that the Darvish deal isn’t working out, and the team that originally acquired him wants to cut bait. How is cutting bait on the entirety of what’s already been invested preferable to working out an agreement in which you share the cost of the remaining years of a contract with a trading partner over time?

It’s not.

As much as we can all fall in love with a guy who does the things that we see in this video:

There is no way of getting around the fact that a deal for Yu Darvish is a financial risk without an easy method of extraction.