Monday, October 17, 2011

The Answer is Yu

The Royals need a front end starter. A man that simply by his presence at the front end, enables every other member of the rotation to pitch one day later and one slot back in the rotation. By doing this the Royals not only improve their top spot, but every subsequent spot afterward.

Due to a weak free agent class in the starting pitching department and the amount of prospects it would take to acquire a front end guy via trade, there aren't many options available. But there is one player that should be available via another route. The route I am referring to is the posting system, and of course that pitcher's name is Yu Darvish.

"please stop believing that CJ Wilson or Yu Darvish will end up here because they won’t." -Greg Schaum (

I agree that Yu Darvish won't be wearing Royal blue on Opening Day 2012. However, I don't believe this is because he doesn't fit, or because the Royals would be incapable of fitting him into the budget.

Personally, I see Darvish as a great fit financially. This is because a large chunk of the necessary cash would be tied up in a posting fee, virtually giving the Royals the opportunity to front load a huge percentage of the investment.

Why is this so important? Well as we all know the Royals are an awesomely young team. With twelve players making their Major League debuts in 2011, the Royals will be afforded the benefit of paying those players the league minimum for the next three seasons. In the three subsequent seasons those players will begin to receive raises through arbitration, gradually elevated the team's payroll.

My point is that while the Royals have a ton of payroll flexibility in the short run, this will begin to diminish in the long run. To illustrate this point consider that the Royals could very reasonably afford to pay a top tier guy for the next three seasons, this would be possible despite of an annual salary of $15-20 million.

However, top tier guys don't sign contracts for just three seasons. For this reason the Royals would also be committing an additional $15-20 million to payrolls 4-6 years out that ideally won't have that flexibility. (I say ideally because arbitration is performance based. Hopefully our young players perform as hoped and will earn major raises.)

Normally this situation would render the Royals obsolete in the market for a top tier starter. But this year it could be different. The reason is that there is an ace available that doesn't require a $15-20 million commitment 4-6 years down the road. Instead the Royals could only be committing half that.

Of course this prediction is only based in precedent. As we all know there has been another highly touted Japanese starting pitcher that has went through the posting system in recent years. Daisuke Matsuzaka required a $51 million posting bid, along with a six year $52 million contract. It was a $103 million investment made by the Boston Red Sox, but instead of paying $17-18 million a year for six seasons, they were only on the hook for $8-9 million for the final three seasons of the contract.

Of course just because you can figure out a way to fit the contract neatly into payroll projections for 2015-17, it doesn't necessarily mean that the problem is solved. The Royals would still need to figure out how to fit in a nearly $50 million posting fee into the present budget.

So what would be required in the posting fee to win the exclusive negotiating rights for Yu Darvish. As we've already learned it took a $51 million bid from the Red Sox to win the negotiation rights to Matsuzaka. Here is what Mlbtraderumors had to say on the matter:

"Baseball officials are increasingly convinced that righthander Yu Darvish will be posted to the major leagues, and industry folks wonder how much will teams pay. The Red Sox paid more than $51MM five years ago to talk with Daisuke Matsuzaka, and that hasn't panned out for them. The expectation is that in light of Boston's disappointment with Matsuzaka, teams won't bid as much for Darvish."

So if the Royals can get away with a $40 million or even a $45 million bid, that's awesome. But if a $50 million bid was necessary could the Royals fit that into the current budget? I say yes.

Of course it isn't my money, but considering this team has reached nearly $80 million in payroll before. And considering Dayton Moore has on several occasions talked about the ability to have payroll somewhere near that figure, it would seem that the Royals have the short term flexibility to absorb a $50 million posting fee.

In 2011, the team payroll ranked 30th in baseball and came in right around $35 million dollars. It is great to save money, especially when the saving was a result of leaving room for better and younger players. But if that money isn't reinvested back into the organization than David Glass haters, have another reason to cry foul.

Even if we operate with the assumption that the max payroll the 2011 team could have maintained was just $70 million, that still leaves roughly $35 million in excess. Looking at the roster for 2012, this figure shouldn't jump much. Even if through arbitration and raises it did jump to $50 million, the Royals would still have about $20 million leftover, before hitting our hypothetical $70 million threshold. In 2013, the Royals should still find themselves at the least $10 million under that same threshold.

In short, without the Royals taking on any major contracts they should have at least $65 million in payroll space, including 2011. If a posting fee was made it could be spread over the excess of this season's budget and the next two or three seasons. Make no mistake about it, from a financial perspective Yu Darvish offers the Royals an investment possibility that no other top tier starter can, without sacrificing top prospects.

Quite frankly, the Royals may be the only small or mid market team in baseball that can fit the financial burdens of Yu Darvish into their budget. This is enabled by being so far under payroll potential in the short term, coupled by the vast amount of young players on the roster.

Yu Darvish is 24 years-old this season. Which ever team signs him is going to enjoy him throughout the prime years of his career. He isn't your prototypical Japanese pitcher. This is in part because he is actually half Iranian descent.

Darvish is 6-5, according to Trey Hillman he has a similarity to Zack Greinke in that he loves to toy with his pressure points in order to add and subtract miles per hour on or off of his pitches. He can throw in the upper 90s, and entering 2011 he had a career 1.81 era in the Nippon Professional Baseball League. His career K rate is 9.2 and his career walk rate is 2.1.

This season he has been even better his era is down to 1.44. He is averaging 10.7 strikeouts per 9 innings to just 1.4 walks. He has a 76-28 career record and in Japan is an absolute superstar.

Financially the Royals could fit Darvish into their budget, based on my cursory overview of the payroll and projected payrolls for the next six seasons. I haven't even mentioned how the potential payrolls could expand should the Royals perform as we hope. A playoff appearance, pennant, or dare I say World Series victory are known to have major implications on attendance for the following season.

Not to mention, a whole new market that the Royals would all of the sudden appeal to. Daisuke Matsuzaka has drastically affected the Red Sox popularity in Japan, an island that is absolutely infatuated with the game of baseball. How awesome would it be for the Royals to gain a huge appeal for the massive market? What could the financial implications be from that?

Do I believe that the Royals will sign Yu Darvish? No, I don't. But do I believe that they could? Yes. And do I believe that they should? Absolutely.


  1. You make some excellent points, but completely understate the marketing value of Darvish. This guy is a rock star in Japan, and he would bring the type of media attention not seen since Hideo Nomo. The Royals would instantly add tons of value and world wide recognition to their brand.

    I imagine that every team in baseball understands this, and despite rumors that teams will be reluctant due to Daisuke Matsuzaka's 2009 and 2011 seasons. Dice-K did help them to a World Series title, and according to Fangraphs, has racked up $44.9M in "value".

    The Fangraph's value is based entirely on performance... how much would even 1,000 more tourist to the Kansas City area be worth?

  2. I intentionally understated the value of Darvish and the increase in Japanese fan base, plus the value of extra wins on attendance. I wanted to look purely at if the Royals could afford it in the present conditions.

    I mentioned it at the end, to just keep that thought in fans minds. I knew I couldn't assign a dollar value for adding a rock star, so I didn't want to make guesses.

    You are definitely right, the value from a market increase would be astronomical.

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