What Is MLB’s Posting Fee? How Does It Impact Free Agency?

In the past few days, we’ve seen two major international deals – Yoshinobu Yamamoto to the Los Angeles Dodgers and Lee Jung-Hoo to the San Francisco Giants. While both teams are coughing up dollars for the players, another expense has caught fan attention. It’s the posting fee these franchises owe the teams of Yamamoto and Lee.

It is known that Yamamoto has a massive $325 million contract but his total cost to the Dodgers is over $375 million. This is because of the $50.6 million they owe to Yamamoto’s previous team – the Orix Buffaloes. So what exactly is a posting fee?

Posting Fee – how it was calculated for Yoshinobu Yamamoto and others

MLB has strict rules for what constitutes an international free agent. A player needs to have nine years of experience in the NPB or KBO before they can enter MLB as free agents. If any player wants to enter before that time frame, they need to request their teams to post them in MLB. Whichever major league franchise signs that player must pay a “release fee” to the original team. This is popularly known as the “Posting Fee”.

Calculating it is quite simple. It follows a basic “20 – 17.5 – 15” formula. The team gets 20% of the first $25 million of guaranteed amount. Then gets 17.5% of the next $25 million and 15% of everything over $50 million.  

For example – Yamamoto’s posting fee is $50.6 million. His contract is $325 million. This means for the first $25 million, the posting fee was $5 million. Then for the next $25 million, it’s $4.375 million. And finally for the remaining $275 million the amount is $41.25 million. All added up it becomes $50.625 million. This is the posting fee that the Dodgers owe to the Orix Buffaloes.

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There is another rule that goes with the posting process. Teams have only 45 days till the day of posting to sign the player. Should they fail, the player will have to stay in his home league for that year. If the player gets a minor-league contract, the teams get a flat 25% of the contract’s value. Surprisingly, Yamamoto isn’t the player with the highest posting fee.

Highest posting fee for a player yet

The highest posting fee ever given was the $51.7 million for Yu Darvish by the Texas Rangers in 2011, though it was given under the old rules. Another huge fee was given by the Tampa Bay Rays – $51.111 for Daisuke Matsuzaka in 2006. 

Yamamoto comes in third with $50.6 million. Other than him Shohei Ohtani, Kenta Maida, and Masahiro Tanaka’s contracts had a $20 million posting fee. With Yamamoto setting a whole new benchmark, how long till someone breaks the record set by Darvish?

Read more: Japanese Ace Yoshinobu Yamamoto Saves $8.5 Million in Record-Shattering $325 Million Deal