Sports Litigation Alert – The Evolution of the U.S. – Japanese Player Contract Agreement

The Evolution of the United States – Japanese Player Contract Agreement

(Editor’s Note: What follows is a piece by Robert J. Romano, founding partner of The Romano Sports & Entertainment Agency. Romano can be reached at (203) 777-9797)

History of the Agreement

The initial United States – Japanese Player Contract Agreement was entered into in 1967 after a dispute arose between Major League Baseball’s (MLB) San Francisco Giants and Japanese Professional Baseball League’s (NPB) Nankai Hawks over the rights to pitcher Masanori Murakami.  Prior to the 1967 agreement, Murakami played for the Giants’ minor league affiliate in Fresno, California.  In 1964, Murakami was called up to the Giants and became the first Japanese-born player to appear in a Major League Baseball game.  Following the 1965 season, however, Murakami, over the Giants’ objection, was required to return to his Japanese team to fulfill his contractual obligation with the Nankai Hawks.  As a result of this dispute, the initial The United States—Japanese Player Contract Agreement was signed stating that all Japanese professional baseball players will stay in Japan and play for the NPB and all American professional baseball players, at either the major and/or minor league level, will stay in the U.S. and play for MLB.

By the 1990’s, salaries for MLB players, as a result of free agency and advances made by the MLB players’ association through collective bargaining, increased significantly.[1]  Japanese players, aware of these high salaries, wanted to come to the U.S. to see if they too could secure a lucrative contract with an MLB franchise.

Hideo Nomo was the first NBP baseball player who successfully “cashed in” by signing with an MLB franchise.  After retiring from NPB in1994, he signed a 3 year, $4.3 million dollar contract to play for the Los Angeles Dodgers.  Nomo was able to sign with the Dodgers since the NPB players’ contract reserve clause only controlled the actions of Japanese players within the Japanese Professional Baseball League.  The reserve clause was silent when it came to players signing with a non-Japanese baseball team.

A second Japanese player, pitcher Hideki Irabu, wanted to play for the New York Yankees and asked for a trade from his current NPB club, the Chiba Lotte Marines.  The Chiba Lotte club agreed to the trade but opted to send him to the San Diego Padres instead.  After a lengthy series of “negotiation”, MLB ordered the Padres to relinquish all rights to Irabu, allowing him to sign with the Yankees.

Another occurrence involved Alfonso Soriano.  Soriano wanted an increase from the league minimum in which his current NPB team, the Hiroshima Toyo Carps, was paying him.  The Carps failed to make Soriano a significant offer.  He therefore decided to retire from NPB to pursue a career with an MLB franchise. Soriano was successful, despite the best efforts of NPB to stop him from signing with an MLB team, because there were no rules to preclude him from retiring from the NPB and signing with an MLB franchise.  Soriano was deemed a free agent by MLB and signed a five-year, $3.1 million contract with the New York Yankees.

Following this series of player departures, Japanese baseball clubs believed the players exploited loopholes in United States – Japanese Player Contract Agreement, namely its reserve clause.  The reserve clause, the clubs believed, allowed Japanese players to escape their NPB contracts and play for MLB teams without MLB teams having to compensate their former NPB teams.  Feeling they were left with nothing, the NPB petitioned for a new agreement with MLB that would govern when a player could be released from his NPA contract and play for an MLB franchise.

In 1998, a new “posting system” was agreed upon, modifying the United States – Japanese Player Contract Agreement in effect between NPB and MLB.  The new agreement, written by Orix Blue Wave general manager Shigeyoshi Ino, designed a plan wherein NPB players could be traded to an MLB franchise in exchange for monetary compensation.  This new agreement applied only to players currently under contract with an NPB team.  Free agents and players who have completed nine years of service were exempt from the posting rules and could negotiate with foreign professional baseball leagues without restraint.  In addition, the new agreement did not apply to Japanese players who never played professionally in Japan, or American players playing with an NPB franchise.  (These players are treated by standard free agent rules.)

The term of this new agreement was for one year with each league having the option to terminate it by providing written notice by June 18th of the year preceding termination of the agreement.  To date, neither MLB nor NPB has exercised this termination option.

How the Posting System Works

The “posting system” works in the following manner.  Japanese players can request to be posted by their current NPB club.[2]  If the team agrees to grant the player’s request, and only if the team agrees to do such, the team will then notify the NPB Commissioner’s Office of its decision.  The NPB Commissioner’s Office then contacts the MLB Commissioner, who in turn notifies all American and National League front offices.

A Japanese baseball player can be posted only between November 1st and March 1st.  Once posted, MLB teams have four days to bid on rights to a thirty-day window of exclusive contract negotiations with the player.[3] These bids are sealed and bidders do not know the amount of another MLB team’s bid.  Placed in U.S. dollars, bids are sent directly to the MLB Commissioner’s Office.

Following the completion of the four-day auction period, MLB then notifies the player’s NPB ballclub (via the NPB Commissioner’s Office) of the winning bidder.[4] If the NPB club chooses to accept the winning bid, they agree to grant the MLB franchise a thirty-day period of private contract negotiations with the posted player.  If the NPB team rejects the bid, they forfeit any bid amount offered by the MLB franchise.[5]  Additionally, if the NPB club accepts the bid, the MLB franchise must come to contract terms with the player within the thirty-day period.  If a contract is not signed between the posted Japanese player and the MLB franchise, the player returns to play for his NPB club and the MLB franchise does not have to pay the bid amount to the NPB team.[6]  However, if a contract is reached, the MLB franchise has to pay out its bid amount to the NPB team.  This amount is paid on top of whatever amount it has contracted to pay the former NPB player for his services.

Since the new United States-Japanese Player Contract Agreement came into play in 1998, 21 Japanese players have used the posting system, with 14 signing contracts with MLB franchises.

Date Player posted Team posting Team claimed Price
February 2, 1999 Alejandro Diaz Hiroshima Toyo Carp Cincinnati Reds $400,001
February 2, 1999 Timoniel Perez Hiroshima Toyo Carp No claim No Price
November 9, 2000 Ichiro Suzuki Orix Blue Wave Seattle Mariners $13,125,000
January 9, 2002 Kazuhisa Ishii Yaklut Swallows Los Angeles Dodgers $11,260,000
February 6, 2003 Ramón Ramírez Hiroshima Toyo Carp New York Yankees $300,050
December 18, 2002 Akinori Otsuka Osaka Kintetsu Buffalo No claim No Price
November 19, 2003 Akinori Otsuka Chunichi Dragons San Diego Padres $300,000
January 28, 2005 Norihiro Nakamura Orix Buffalo Los Angeles Dodgers Not disclosed
November 6, 2005 Shinji Mori Seibu Lions Tampa Bay Rays $1,000,000
November 30, 2005 Yusaku Iriki Hokkaido Nippon Ham Fighters No claim No Price
November 9, 2006 Daisuke Matsuzaka Seibu Lions Boston Red Sox $51,111,111.11
November 11, 2006 Akinori Iwamura Tokyo Yakult Swallows Tampa Bay Rays $4,550,000
November 20, 2006 Kei Igawa Hanshin Tigers New York Yankees $26,000,194
December 18, 2008 Koji Mitsui Saitama Seibu Lions No claim No Price
January 8, 2009 Koji Mitsui Saitama Seibu Lions No claim No Price
November 1, 2010 Hisashi Iwakuma Tohoku Rakuten Golden Eagles Oakland Athletics $19,100, 000-DNS
November 17, 2010 Tsuyoshi Nishioka Chiba Lotte Marines Minnesota Twins $5,329,000
November 28, 2011 Hiroyuki Nakajima Saitama Seibu Lions New York Yankees $2,500,000 – DNS
December 1, 2011 Hiroki Sanada Yokohama Bay Stars No claim No Price
December 8, 2011 Yu Darvish Hokkaido Nippon Ham Fighters Texas Rangers $51,703,411
December 12, 2011 Norichika Aoki Tokyo Yakult Swallows Milwaukee Brewers $2,500,000

[1] Top 6 -1990 MLB players’ salaries:

Robin Yount Milwaukee Brewers

$ 3,200,000

Kirby Puckett Minnesota Twins

$ 2,816,667

Roger Clemens Boston Red Sox

$ 2,600,000

Paul Molitor Milwaukee Brewers

$ 2,600,000

Eddie Murray Los Angeles Dodgers

$ 2,513,703

Don Mattingly New York Yankees

$ 2,500,000

[2] United States – Japanese Player Contract Agreement paragraph 9.

[3] United States – Japanese Player Contract Agreement paragraph 9.

[4] United States – Japanese Player Contract Agreement paragraph 10.

[5] United States – Japanese Player Contract Agreement paragraph 10.

[6] In 2010, the Oakland Athletics won the bid for Japanese pitcher Hisashi Iwakuma with an amount of $19.1 million.   However, contract negotiations failed and Oakland was returned its bid offering.

“King James” Lebron

LeBron James finally won his first NBA title last night against the Oklahoma City Thunder. It took him longer than he would have hoped and that others anticipated, (nine NBA seasons) but it happened. Let’s all take a moment of silence for his first championship. Now that we just wasted yet another moment of our lives thinking about LeBron, I would like to address one question that has been on my mind since LeBron entered the league in 2003. “Who died and made LeBron James ‘King?’” His self-inflicted nickname, “King James,” is inappropriate and too cliché for his own goodWhat is a king without a ring? A king in my mind is an all-powerful being who rules for an extensive time period. LeBron hadn’t even put on a Cleveland Cavaliers jersey before signing a $90 million dollar contract with Nike. He was deemed King James before ever lacing up his sneakers for his first NBA game. Who made him ruler of a league he hadn’t even played for yet? And shouldn’t the king be the one with the most rings? This would make Boston Celtics legend Bill Russell king with 11 rings.

Everyone who knows the game of basketball would say that Michael Jordan is the greatest player to ever play the game. Michael won 6 championships in the 1990’s with the Chicago Bulls. It did take Michael six years to finally win a championship, but he never deemed himself king. I guess media exposure has certainly sparked with the advances in technology, but that is no excuse to call yourself a king.

So LeBron’s first title was certainly a weight lifted off his back as he has grown to be a hated player in the NBA for the way he left Cleveland in 2010. When he joined the Miami Heat in 2010, Dwyane Wade, Chris Bosh, and LeBron had a press-frenzy in the summer at the Miami Heat’s arena. This is when LeBron announced that the Heat are going to win multi-championships saying: “Not two, not three… not six, not seven..” Well LeBron, you have one. Let’s start with that.

By Stephen Bower
Student Assistant
The Romano Sports & Entertainment Agency

Romano On Radio: KCAA – California

Attorney Robert J. Romano will be a guest on KCAA 1050 AM – The Morning Brew Sports Parade today, June 23, 2012 at 11:15.m. est to discuss the current status of the Jerry Sandusky and Roger Clemens verdicts together with the latest on Curt Shilling’s 38 Studios bankruptcy filing.

The station’s number is 1-888-909-1050.  Please feel free to call into the show.

KCAA Radio, 1050 AM, NBC News, Inland Empire, California

Retired NFL Players’ Antitrust Lawsuit Dismissed.

U.S. District Judge Paul A. Magnuson dismissed the antitrust lawsuit filed by retired NFL players accusing the NFL of exploiting their image for financial gain.

The lawsuit filed in 2011 by former players, Gene Washington (Vikings, Broncos), Diron Talbert (Redskins) and Sean Lumpkin (Saints), alleges that the NFL illegally monopolizes their likenesses by trading on historic footage of the players in promotional films and other products, while at the same time prohibiting them from using their own identities as players to promote themselves for personal economic gain.

The Judge while dismissing the action stated. “What they have are claims for royalties, not claims for antitrust.”

Counsel for the NFL said the opinion confirmed that “antitrust laws do not limit the NFL’s ability to market and sell intellectual property, including historical game footage, that the member clubs own collectively.”

Mike McQueary Testifies: “Sandusky In Shower With Young Boy.”

The defense team in the Sandusky trial can argued that the boys’ he allegedly abused memories are questionable and that their motives are suspect because of the pending civil suits.  But what about Mike McQueary, an adult and eyewitness who says he saw Sandusky abuse a boy and can testify about the events in the shower at Penn State University.

The testimony of McQueary on Tuesday described how he went to the gym and saw a naked Sandusky with a boy  – between the ages of 10 and 12 – who was pushed against the shower wall.  McQueary testified that there was no doubt he was witnessing a sex act.

It was “very much skin-on-skin smacking sound,” he said. “I immediately became alert and was kind of embarrassed that I was walking in on something.”  He said he slammed the locker door to try to alert his presence and attempt to break up what was happening.

“It was more than my brain could handle,” McQueary said. “I was making decisions on the fly. I picked up the phone and called my father to get advice from the person I trusted most in my life, because I just saw something ridiculous.”  The next day, McQueary said, he went to head coach Joe Paterno.

During cross-examination by the defense, McQueary held firm.   Sandusky’s attorney questioned why McQueary changed the dates of when he saw the incident, first saying it happened in 2002, then correcting it to 2001.
“I recall a lot of things in my life that are very clear and vivid, and I don’t know the dates, sir,” McQueary stated.

McQueary was asked how he could be sure about the details, since some of what he saw was in a mirror.  McQueary’s response – there was no question where Sandusky’s genitals were.

As for calling the authorities, McQueary insisted he thought he did by contacting Coach Paterno who later went to the hierarchy at the university.  Defense counsel questioned – “if there had really been a sexual assault, shouldn’t [McQueary] have called police?”

The Sandusky trial resumes with no less that six more victims who say they were abused by Sandusky testifying.

Sandusky Is Now Facing Men In Court – No Longer Young Boys In Showers

Jerry Sandusky is not controlling little boys anymore, now he is dealing with grown men – as exemplified by Victim No. 4’s testimony this past Monday.

The witness, who was only a 13-year-old boy when he met Sandusky, is now a 28-year-old man.  When defense counsel asked this man whether the former Penn State defensive coordinator treated him “like a son”, Victim No. 4 just shook his head. “He treated me like a son in front of other people, aside from that, he treated me like his girlfriend.”

For over five hours No. 4 recapped how Sandusky first met him when he was a troubled teenager at a Second Mile charity picnic. When a bunch of kids went swimming in a lake, Sandusky joined them, and during a game where he’d throw the children in the air, the witness first realized something was wrong.

“He’d kind of pretend like he was having trouble getting a good grip,” No 4 said. “And as he was grabbing you he would brush your genitals and then throw you.”

During the two-person shower sessions, Sandusky would grope the young man, forced contact with private parts and even have absurd “wrestling” matches, where Sandusky would pin the 90-pound boy in compromising positions.

“Combination of the oral sex or just groping me,” the witness said. “Sometimes there would be no oral sex that would happen but he’d be between my thighs kissing them like I was a girl.”

WOW:   Unless the defense intends to impeach Victim No. 4 by catching him in multiple lies, No. 4 did some significant damage to the Sandusky – Actually, he laid Sandusky out, right in his own face.

No. 4 testified that fear, confusion and thoughts that he would be mocked at school were the reasons why he didn’t report the incidents.  In addition, Sandusky offered gifts, trips and unheard of access to Penn State football, including team locker rooms, charter flights, hotels, bowl trips and sideline passes.

“It’s not that simple, you just can’t say, ‘OK, I’m done.'” There was also the odd mix of being so excited about getting to be part of the Penn State program (“I was like the mascot”) that he could block out the shower sessions.

The amazing part, there are seven more alleged victims scheduled to testify against Sandusky.  Each of them may have been a child who was once afraid and cowered to Sandusky  – but now, as No. 4’s testimony indicates, the remaining seven are grown up men, all strong, fearless and unafraid of telling it all.