Traditionally top baseball talent has flowed from countries like Japan and South Korea to United States as star players such as Ichiro and Ryu Hyun-jin sought to compete against the best in the world in Major League Baseball (MLB). Players that moved from the United States to Japan or South Korea tended to be players who had marginal prospects of making the major leagues or players whose careers had stalled.
That may be changing.
While it’s unlikely that Japan’s Nippon Professional Baseball (NPB) or the Korea Baseball Organization (KBO) will be competing to sign star U.S. players such as Bryce Harper in the near future, as they can still make significantly more in the United States, that may no longer be the case when it comes to amateur talent.Enjoying this article? Click here to subscribe for full access. Just $5 a month.
Shortly before this year’s first year player entry draft, one of the top amateur U.S. players, 19-year-old pitcher Carter Stewart, decided to forego the major league draft and instead sign a six year, $7 million contract with the Fukuoka SoftBank Hawks of the NPB.
Stewart was originally drafted as the eighth pick in the 2018 MLB draft by the Atlanta Braves. He and the Braves were unable to reach an agreement when Atlanta reduced his signing bonus as the result of a wrist injury. In contrast to the $7 million Stewart will earn in Japan, he was only expected to receive a $2 million signing bonus if he entered the draft again this year. It’s also more than he’s expected to earn had he quickly made the majors after being drafted.
The move also likely enhances Stewart’s potential future earnings after his contract ends. As long as he plays parts of the next six years in the NPB’s top league and is successful, he’ll be eligible to go through the posting system for players to move from the NPB to MLB at a younger age then most players are eligible for free agency in the United States.
With MLB teams shifting spending from older players with strong track records to younger players to capture their peak years, Stewart could be in line for something similar to what Yusei Kikuchi received last winter as a solid, but not star player when he was posted and signed with the Seattle Mariners for three years and $43 million. Contrast that with Jake deGrom, one of MLB’s top pitchers, who only earned $7.4 million last season going through MLB’s arbitration system at an older age then when Stewart could potentially return to the United States.
A move similar to Stewart’s has become potentially appealing as MLB has sought to find way to limit spending on amateur players. Initially, hard caps were placed on the total amount that teams could spend on players chosen in MLB’s first year player entry draft, but similar caps were eventually extended to cover the amount that each team could spend on signing international amateur free agents outside the United States. Those caps may now have opened a potential window for teams in Japan and South Korea to compete for top amateur talent.
For the top 10 or 15 amateur talents in the United States, the financial benefits of what they can earn overseas compared to their draft slot value may not be enough to entice them overseas. However, for top talent in the second half of the first round or the second round it could become an appealing path. For international talent that will already have to make the decision to move to another country and where the potential signing bonus money is smaller, there may be stronger incentives.
In 2017, there were over 100 ex-major or minor league players in South Korea and Japan. Traditionally, the KBO and NPB have scouted players for recruitment in the United States who were in their late 20s in the minor leagues, but with major league experience. These types of players were more likely to move overseas since their long-term major league prospects were dimming and they could make significantly more money overseas than toiling in the minor leagues.
By going after amateur talent in the United States or Latin America, teams in the KBO and NPB would be able potentially recruit players of a higher level of talent and save the upwards of a $1 million they generally have to pay major league teams to gain the release of a player currently on an MLB team’s 40 man roster.
Because those players would be younger, they might not produce immediately, as is the case in MLB, but in the long run they could improve the level of play in both the KBO and NPB, making both leagues more competitive with MLB.
Beyond convincing players to seek their fortune in Asia rather than North America, there will be challenges recruiting international amateur talent. Teams in the KBO and NPB would have to expand their scouting internationally, and in Latin America deal with the murkier relationship between trainers and young players. There would also be limits to the number of players they could sign, as NPB teams are limited to four international players and KBO teams three international players on their active rosters. Some younger players could begin in each league’s minor league system, but the limited opportunities on the first level KBO and NPB teams would also naturally limit the number of players who could be in the minor leagues.
If either league were to try to attract more international talent, the NPB would be better placed than the KBO, and not merely because of the precedent set with Carter Stewart’s signing. Similar to MLB’s efforts to cap the salary of amateur players, the KBO has placed a hard cap on the amount that a team can spend on signing a foreign player. Under the hard cap, a new foreign player cannot be signed for more than $1 million or to a multiyear deal. Foreign players would also only be able to sign a multiyear deal with their current team, but not other teams in the KBO. Without changes to these rule the KBO would not be able to compete with an NPB team for amateur international talent like Stewart.
It’s too early to know if the Fukuoka SoftBank Hawks’ decision to sign Stewart to a contract more lucrative than he could have received in the United States will be become more common or if it will prove an anomaly. But there are clear incentives for both the players and the NPB or the KBO in light of MLB’s current salary structure. The only questions are whether other NPB teams follow the Hawks’ lead and whether the KBO makes the changes it needs to be a player in recruiting international talent.