The Texas Rangers win the exclusive right to negotiate with Yu Darvish on a Major League contract after bidding a posting fee of $51.17 million, according to Jeff Passan of Yahoo! Sports.

While we’ll have to wait to see what type of contract, if any, is agreed upon by Darvish and the Rangers, we can say that based on the posting fee, the total amount of money that it will end up costing is a lot for a pitcher that hasn’t thrown a single inning of Major League Baseball.

Most arguments against large posting fees and expensive contracts for Japanese pitching is that the history of doing so is fraught with bad investments. Six pitchers from the NPB have been signed by Major League teams after paying posting fees. Here’s the total amount that the team spent on the player (posting fee plus initial contract), and the value by WAR according to FanGraphs that they brought back to their organization based on what the same player would make in free agency:

  • Kazuhisa Ishii, LAD: $23.6 million cost; $2.5 million return + a negative $1.6 million return for one year of Jason Phillips (acquired in trade for Ishii).
  • Ramon Ramirez, NYY: $0.35 million cost; $0 return.
  • Akinori Otsuka, SDP: $1.8 million cost; $7.1 million return + additional return as part of trade that brought back Adrian Gonzalez, Terrmel Sledge and Chris Young.
  • Shinji Mori, TBR: $2.15 million cost; $0 return.
  • Daisuke Matsuzaka, BOS: $103 million cost; $44 million return.
  • Kei Igawa, NYY: $46 million cost; a negative $0.8 million return.

It’s not a racist exercise to compare Darvish to other pitchers from Japan because in most cases we’re talking about them all developing from a young age through a similar system. However, Darvish is unlike any of these other pitchers in that he’s risen through that similar system so quickly while still maintaining a reasonable work load. He also possesses such a uniquely large repertoire of pitches, as we can see in the video below.

While any pitcher’s strikeout highlights are bound to be impressive, it should be remembered that Darvish is using an assortment of different pitches with two strikes, all appearing to be swing and miss strikeout caliber. However, these are Japanese batters that he’s making look foolish, and once again, we come back to the idea that the posting fee, plus a contract will be a lot of money for someone with no experience at the Major League level.

Using the idea that a each win above replacement will cost $5 million on the free agent market, while assuming an inflation rate of 5% per year, we can get a rough idea of how Darvish would have to perform in order to live up to the Rangers’ spending in posting fees and his rumoured asking price of a five year contract worth $75 million.

Note: I feel as though 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, and will impact the amount of money being spent on the contract. It’s just the total money will be split two ways, between the Hokkaido Nippon Ham Fighters and Darvish.

An argument could be made that the posting fee is similar to the cost of a trade with the Japanese team, and the contract is a separate entity, but the arrangement is far more comparable to a free agent signing than a trade and contract extension, in that you’re dealing solely in money. It’s also clear what amount of value you’re giving up to negotiate a contract with Darvish, unlike a trade where you’re dealing in projected returns from players in addition to previously signed contracts.

With this in mind, we see that Darvish would have to accumulate something close to 23 wins above replacement for that to work out. So, he’d have to be in the top eight pitchers in the league over a five year period in order for a team spending $125 million to theoretically break even. Of course, the whole idea of spending in baseball is to do better than break even, but let’s look at some of the pitchers that Texas would have to believe he will be as good as in order to justify the signing.

These are the pitchers with more than 23  wins above replacement (according to FanGraphs) over the last five years:

Josh Beckett, Zack Greinke, Felix Hernandez, Cliff Lee, Dan Haren, Tim Lincecum, Justin Verlander, C.C. Sabathia and Roy Halladay.

Financially, it’s very unlikely that this deal will work out, especially when we see the most apt comparisons bringing up Jordan Zimmermann, and not Felix Hernandez.

There is something to be said for potential additions of corporate sponsorship from companies in Japan, but this simply isn’t as certain as might be imagined.

While Jeff Blair in the Globe & Mail suggests that Japanese imports Hideki Matsui and Ichiro! were worth millions of dollars to the New York Yankees and Seattle Mariners, Sam Kennedy, Chief Operating Officer of the Boston Red Sox replying to questions about Daisuke Matsuzaka’s off field value, said:

I know it hasn’t been a financial windfall that some people had predicted, but I do think it was always a baseball decision. There was a lot of made of the business aspect. Did we open some doors in Japan? Yes. Was it a windfall? No. Was it a good baseball move? You can debate that all day long.

Aside: By that last sentence, I’m led to assume that Kennedy’s days are significantly shorter than mine.

It should also be mentioned that any additional international television rights or merchandise sales would go to MLB and split up between all teams, as opposed to being a direct increase in revenue for the Rangers.

Dave Cameron from FanGraphs also brought up the point on a recent podcast that a pitcher is different from an everyday player when it comes to international attendance. It’s unlikely that Yu Darvish is going to make Arlington a tourist attraction for the Japanese, at as much as a regular member of the lineup might, considering the difference in frequency with which both would play.

I’m not sure if that difference might also carry some weight in terms of corporate sponsorship as well. Potential Japanese sponsors might ask: What’s the point in bothering to pay for advertisements at The Ballpark In Arlington if Japanese fans are only watching one in five games?

And also, let’s not begin propagating the myth that Darvish’s star attraction will bring out the local fans in droves. If we look, baseball history informs us that new additions to a lineup don’t bring greater attendance. Wins remain the only thing that brings bigger crowds to the ballpark.

So, yes, if everything goes well, Darvish will bring his share of those. However, those wins could most likely be had with a far less costly investment than the one that has been and will most likely be made in Yu Darvish.

After writing all this, it must be said that if any team can justify overpaying for a need, it is the Texas Rangers who have been to the World Series in both of the last two seasons with the 27th highest payroll in 2010 and the 13th highest payroll in 2011. Over those two years, they had the 14th highest attendance in 2010 and the tenth highest attendance in 2011. This led to a reported $22.6 million operating income in 2010, years before a new, lucrative television deal with FOX will begin in 2014.

As for the roster, the Texas Rangers now have six MLB caliber starters in Darvish, Neftali Feliz, Alexi Ogando, Derek Holland, Matt Harrison and Colby Lewis, as well as two prospects in Martin Perez and Neil Ramirez that will soon be knocking on the door. There are many options for the team going forward, but I expect them to hold steady for the time being and see how Feliz and Ogando do in the rotation to start the year, one that despite the Los Angeles Angels’ recent additions, promises to be a successful one.