Players in Japan could push for free agency change, opening door for earlier moves to MLB

In late July, Tony Clark, the executive director of the Major League Baseball Players Association, visited Japan to announce support for players in the country’s top league, Nippon Professional Baseball. Japanese ballplayers are trying to take control of their name, image and likeness rights, or NIL — a fight familiar to college athletes in the United States. The NPB clubs hold those rights, and therefore, the final say over the endorsement deals players make.

But NIL is not the only battle underway for the Japan Professional Baseball Players Association. It may not even be the most ambitious. NPB players, who are not known for aggressive labor tactics, are pushing to become free agents earlier in their careers — including a change that would allow players to join Major League Baseball sooner.

To get it done, the JPBPA is preparing a legal challenge to the league’s reserve system on antitrust grounds. Tak Yamazaki, outside counsel to the Japan Professional Baseball Players Association, said he could not specify exactly when the action will be brought, but that it would be this year.

“It will happen soon,” Yamazaki said.

Players in Japan have two forms of free agency: domestic and international. Domestic free agency, the freedom to switch to another NPB team, is achieved after seven or eight years in the league, depending on whether the player was drafted out of college or high school.

But to leave as a free agent for a foreign league like MLB, the wait is nine years. Players can depart sooner, but only if their team posts them for bidding. Instead, NPB players want what’s in place in MLB: free agency after a blanket six years, regardless of entry or destination.

The two-pronged push for change is remarkable for a players’ association that does not have the same might as its U.S. counterpart. Club owners hold most of the power in NPB, in part because labor unions in Japan are generally not as strong as they are in the United States. Coincidentally, next month marks the 20th anniversary of the only strike NPB players have held in their history, a two-day effort to stave off club contraction.

A second NPB player strike does not appear to be in the offing any time soon. But the JPBPA regards the body that oversees antitrust law, Japan’s Fair Trade Commission, as perhaps the best vehicle to attack the reserve system. That’s a relatively new development: in 2019, the commission issued a report that gave the nation’s athletes newfound leverage.

“There was legal argument whether antitrust law is applied to sports matters,” Yamazaki said. “They changed the interpretation, making it clear that the antitrust law will apply. … That has changed the whole landscape.”

One smaller test case in front of the commission has already gone the JPBPA’s way, leading to the repeal of an unwritten rule in NPB in 2020. The “Tazawa Rule” was named for former big-league pitcher Junichi Tazawa, who had been effectively barred from playing in NPB at the end of his time playing in the U.S. because he had skipped NPB’s amateur draft to pursue a major-league career.

A person briefed on management’s thinking who was not authorized to speak publicly said NPB has been preparing for this next challenge, and that the league has proposed reducing the time to domestic free agency. The offer did not include a reduction with international free agency.

“Six and seven years was on the table at the end of January,” the person said. “If they were willing to negotiate several months ago, I think we would have been able to successfully come to an agreement before Opening Day.”

Yamazaki said the league’s offer was more complex than a straight reduction.

The other change NPB players seek, to their NIL rights, creates a contrast to the U.S., where NIL is a relatively settled matter in pro leagues. But it’s been a dominant topic in college athletics, reshaping the NCAA.

The JPBPA intends to continue to pursue player NIL rights via negotiation. Theoretically, though, the players could also take up an antitrust fight in that space, too. The topic is longstanding. The players sued over publicity rights on different grounds back in 2002, and years later, the case wound up in the Supreme Court of Japan, where the league prevailed.

But that was before 2019. An antitrust case in the U.S. was notably at the center of vast change of NIL for college athletes, when the U.S. Supreme Court ruled against the NCAA in 2021.

NPB teams take a cut of player endorsements, and the clubs are protective of their own sponsors.

“There will be a certain amount of commission, and also it is not absolutely free (choice),” Yamazaki said. “For example, if a company that is offering an endorsement deal to the player is a competitor of club sponsors, it can be denied. Also, for example, setting up a YouTube channel: some clubs allow it, but some clubs don’t.”

The person briefed on NPB management thinking contended that because the clubs have been successful in merchandising, the current setup allows players to maximize their income. Clark, meanwhile, believes players can unlock greater value in group licensing. International unions have “rarely, if at all … taken advantage of or realized the value of their name, image and likeness rights,” he said.

“We believe there’s a better opportunity on the heels of (Shohei) Ohtani coming here, and on the heels of nearly a third of our membership at the major-league level being international, to build on that in a way that hasn’t happened yet,” Clark continued.

The MLBPA is billing its involvement as a business opportunity, not just union camaraderie. When Clark traveled to the city of Sapporo last month, he announced that the MLBPA and a licensing business it owns about 20 percent of, OneTeam Partners, are going “to support Japanese players in reclaiming their NIL rights from Nippon Professional Baseball (NPB) and to manage these rights in the future through the creation of a commercial program, run by OneTeam International,” per a memo the MLBPA sent to its players.

The JPBPA became a union in 1985. That’s almost two decades after the MLBPA created a group licensing program in 1966. Big leaguers at the time quickly began a boycott of Topps, in effort to force the trading card company to deal with the players en masse.

Today, that licensing program brings in huge dollars for players and the union. A financial statement the MLBPA filed with the Department of Labor lists $152 million in net licensing royalties for 2023, although that figure doesn’t account for every stream.

The work requires enforcement. Just last week, the PA’s business arm sued the Pittsburgh Pirates and the gas station chain Sheetz for alleged unlicensed use of player images. A settlement has been tentatively agreed to. But the income has ripple effects: the funds help players prepare for work stoppages, creating bargaining leverage.

Clark acknowledged the MLBPA’s support for the Japanese players comes with costs to players stateside, but said players will benefit stateside as well.

“Someone may look at it from the outside in and suggest, ‘OK, well, that really doesn’t affect me,’ but the truth is, the global sports community is more connected than people think,” Clark said. “Yes, there is a financial investment. Yes, there is a sweat equity component of this.”

Per the MLBPA memo, OneTeam’s international division, which was started this year, is also in partnership talks with football and soccer unions across England, Italy, France, as well as the International Rugby Players Association and various unions across Australia and New Zealand. The memo did not touch, however, the JPBPA’s reserve-system battle — an omission perhaps made out of sensitivity to another union’s bargaining positions.

Cultural chasms

When the MLBPA started its group licensing program, the union was run by the late Marvin Miller, an economist who rose to prominence with the steelworkers and built the PA into a titan. Miller’s son, Peter, is a longtime resident of Japan who served as a consultant to the MLBPA in Japan from 1994 to 2011.

Peter Miller said the relationship between players and owners in his time was “very different from the adversarial relationship that is considered essential in U.S labor-management relations.”

“For example, when they called a strike, they expressed remorse to the fans,” Miller said. “Because it was just really not part of the culture at all.”

Yet, at the same time, the JPBPA has also stood out amongst unions in the country according to Matt Nichol, a lecturer who studies sports law and labor in the College of Business at Central Queensland University in Australia.

“Even though the Japanese players’ union doesn’t have the strike history that the MLBPA does, and there wasn’t that period of industrial action from the formation of the MLBPA through to the strike in 1994, for Japan, the Players Association is quite a militant union,” Nichol said. “Litigating over NIL … taking on the league when they tried to reduce the teams from 12 to 10. Those actions by the Players Association are quite important, and quite dramatic in the context of Japanese labor relations. So the JPBPA is becoming more assertive.”

The differences between the two countries’ systems are vast. For example: There is no set term for the collective bargaining agreement in NPB, creating a rolling nature of negotiations, as opposed to the five-year terms MLB players and owners agree to. NPB players also don’t always explore free agency, even when eligible.

“Players, when they become free agents, don’t always change teams, so there’s not a huge free-agent market like in the U.S.,” Nichol said. “In the last 10, 15 years, players have been moving domestically a little bit more with free agency, but it’s nothing like the U.S.”

In some ways, NPB operates “probably a bit fairer system” than what’s in place in MLB, according to Nichol, who noted teams rarely release players midseason. NPB also has a smaller gap between the highest and lowest paid players and has long provided housing accommodations to minor leaguers — a contrast to the U.S., where minor leaguers took up a public fight for housing in recent years.

The person briefed on NPB management’s thinking made similar points, and argued it was folly to compare the reserve systems in the two countries.

“We only have one minor-league level,” the person said. “If you sign out of college, on average, you will make it (to the major-league level) in less than two years. That, plus seven years, means about nine years.

“But in Major League Baseball, in America’s case, you have to spend about an average of four years in the minors. Plus six years free agency. So, 10 years. Although it’s a long reserve system, you would spend less number of years at the minor-league level in Japan.”

NPB players today sometimes do leave for the U.S. sooner than nine years, but only when their club chooses to post them for bidding. And the best players bring NPB teams hefty payments. The Los Angeles Dodgers, for example, paid the Orix Buffaloes $50.6 million to sign Yoshinobu Yamamoto last offseason, on top of the $325 million the Dodgers committed to the pitcher in salary over 12 years.

The posting agreement — which determines that club-to-club fee structure — is technically separate from the reserve system. But, if the NPB reserve system changes, there’s a clause allowing the posting agreement to be changed. The posting agreement is actually a deal amongst three parties: MLB, MLBPA and NPB. The players in Japan are not formally a party, but Yamazaki said the MLPBA has well represented their interests.

Former MLB pitcher Junichi Tazawa’s case helped set a precedent for player movement in Japan. (Chris Covatta / Getty Images)

More than the number of years to free agency, what might be most pressing to NPB players is who decides it. The MLBPA toppled club control over the reserve system in the 1970s.

“Our reserve system, just like back in pre-1976 MLB, has been unilaterally imposed by the clubs,” Yamazaki said. “That’s the biggest difference between the MLBPA and the JPBPA.”

Working in the JPBPA’s favor could be the success it has had in front of Japan’s antitrust administration already.

The Tazawa Rule forbade a player who skips the league’s amateur draft from joining NPB until at least two years following the conclusion of his career abroad. It was intended to deter players from bolting for MLB. Tazawa made 388 appearances in MLB from 2009-18, mostly for the Boston Red Sox,  but he could not play in NPB once returning home.

In 2020, the JFTC found the NPB had likely violated the law. NPB repealed the rule during the investigation, so no discipline was issued. Now, the JPBPA could try to repeat that playbook: using the complaint to pressure change.

Money on the table?

Shohei Ohtani’s global sponsorship portfolio, like his dual talent as a pitcher and hitter, is unique. For the general player population in Japan, there’s a question of how robust a market they would find if they do take over their NIL.

Josh Persell, who runs JP Sports Advisors, an agency that specializes in bringing players from NPB to MLB and vice versa, said that the endorsement rules in the nation limit what players can do, but only to an extent.

“The licensing landscape is far different than it is here. It’s a smaller country, there are less brands, companies, and categories participating,” said Persell. “The league does well with their general marketing campaigns, but it’s on a smaller economic scale. Is there a broader licensing play which rises the tide and benefits the league, the owners and the players?”

An executive who brokers endorsements for NPB players said the league’s top players make only $150,000 in endorsements annually. But, the executive believes more opportunities could open if clubs relinquished the rights.

“Yes it’s cheap,” said the executive, who was granted anonymity because of the sensitivity of the business dealings, “but that’s what it is.”

A second marketing executive, one who arranges sponsorships for MLB players, said consistently good players in the States make at least double, adding that one or two players per team might reach seven figures.

Peter Miller said the licensing rights have long been desired by Japanese players.

“The Japanese baseball clubs are all potentially advertising entities,” Miller said. “It’s expected that the Yomiuri Giants will support all the Yomiuri newspapers and be identified in pictures and with their uniforms and everything. When you look at it in that way, it’s a little bit hard to imagine an owner wrapping his mind around the idea of a player having his own image rights.

“From a Japanese point of view, it just doesn’t compute.”

Between the two pursuits, Yamazaki thinks NPB players have arrived at a crucial moment.

“Absolutely,” he said. “The biggest ones came at the same time.”

Although Yamazaki declined to reveal exactly when the JPBPA plans to file its challenge to the reserve system, he did share the timing of a different event: the union will celebrate the 20th anniversary of the two-day strike in December.

(Top photo of Yomiuri Giants players celebrating a win earlier this year: Kyodo via AP Images)