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FA prices soar as big names dominate KBO

Dec 06,2017
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KT Wiz General Manager Lim Jong-taek, right, puts a uniform on Hwang Jae-gyun during a ceremony at KT Wiz Park in Suwon, Gyeonggi, on Nov. 27. Hwang became the seventh-highest FA earner in the KBO, signing a four-year contract at 8.8 billion won ($8.1 million). [JUNG SI-CHONG]
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Within four years, from 2013 to 2017, the investment Korea Baseball Organization (KBO) clubs have made in the free agent market has increased significantly, from 24.25 billion to 76.62 billion won.

When Kang Min-ho signed a four-year contract with the Lotte Giants at 7.5 billion won in November 2011, he broke the KBO’s FA record, then at 6 billion won, set by Shim Jung-soo when he signed with the Samsung Lions in 2005. When Kang signed with the Samsung Lions for 8 billion won this year, he didn’t even make it into the top-ten FA earners.

Last year, the KBO permitted contracts over the 10 billion won threshold. Lee Dae-ho of the Giants is currently the highest FA earner at 15 billion won. The Giants were willing to pay the high price for Lee as he is a fan favorite with major-league experience.

Following Lee, Choi Hyoung-woo of the Kia Tigers is second at 10 billion won and Son Ah-seop, who chose to stay with the Giants, is third at 9.8 billion.

In four years, the highest FA earners have changed completely. If Kim Hyun-soo decides to return to the KBO this year, it’s likely that he will break the record. Due to the high investments the clubs have been making in recruiting major league returnees or top players in the KBO, the record is now routinely broken every single season.

In November 2014, Choi Jeong of the SK Wyverns exceeded Kang’s record by re-signing with the SK Wyverns at 8.6 billion won, but that record didn’t last long, as it was exceeded by Yoon Suk-min when he signed with the Kia Tigers for 9 billion won in March 2015.

Within a year, Park Sok-min of the NC Dinos broke the record at 9.6 billion won in November 2015, before Choi became the first player to sign a 10 billion won contract in the KBO in November 2016.

When the free agent system was introduced to the KBO in 2000, only 2.425 billion won was spent on the five initial signees. At the time, there was no such thing as a four-year contract that guaranteed a player’s loyalty for a certain period of time.

The market, which barely exceeded 2 billion won in 2000, quickly broke 20 billion won by 2004 and since 2014, new records have been set in total spending. In the past two seasons, total spending has exceeded 70 billion won. Considering how small the FA market in Korea is, the clubs have been spending over the odds.

“The signing of top players is like one third to one fourth of the club’s yearly operating expenses,” said an industry source familiar to the matter. “If the market continues to be overheated for the next few years, then it’ll give financial difficulties to the clubs.”

Despite the concerns, the FA market has only gotten bigger. Since the clubs are only judged based on results, they try their hardest to bring in the best players, even though they are aware that prices are shooting up.

“It’s difficult to bring a player without overpaying,” said an industry source familiar with the matter. “The actual evaluation price and the recruiting price are different. If a club is certain about their goal of rebuilding, like the World Series Champion Houston Astros, who lost 100 games a season for three consecutive years, then they need to go along with it. But in the domestic league, this can have a negative affect on the companies that sponsor the clubs. This is why it’s difficult to rebuild a team.”

Not only that, clubs feel like they have no choice but to pay the price for top players for fear of fans turning against them. But the amount of spending isn’t the only concern. More and more veteran players are left out of the market, as clubs don’t have enough to spend on them after blowing it all on a few top players.

This has proven to be true this year, as none of the clubs have announced the signing of any of the more seasoned FA players.

“The increase in the elite players’ contracts will lower the average FA players’ contract,” said an industry source. “Unless FA regulations change, this will continue.”

BY LEE HYEONG-SEOK [kang.yoorim@joongang.co.kr]