MLB Buzz: Lee Jeong-hoo’s $56 Million Deal Shakes Things Up

The interest in Lee Jung-hoo (25, Kiwoom Heroes) from the Major League Baseball (MLB) exceeds expectations. A spectacular entry into the United States is anticipated, and the Kiwoom Heroes might also have a reason to smile secretly.

The MLB has officially opened the 2023-2024 Free Agent (FA) market. American media outlets are preemptively reporting the anticipated values and destinations of major FAs. Even though this FA market is primarily for starting pitchers, Lee Jung-hoo is ranked just below Cody Bellinger (28) in terms of evaluation.

Recently, The Athletic predicted that Lee Jung-hoo would sign a guaranteed contract worth $56 million over four years. MLB Trade Rumors anticipated a five-year contract worth $50 million on the 8th (Korean time). Regardless, it surpasses the four-year guaranteed $28 million (total amount 4+1 years $39 million) contract of Kim Ha-Seong (28, San Diego Padres) from three years ago.

Despite Lee Jung-hoo’s season being virtually ruined this year due to an ankle injury and surgery, he has received high praise for his consistent good hitting over the past seven years. He is also evaluated as having good defensive skills. Although his power hitting is a weakness, the trend in the MLB is increasingly favoring hitters who can bunt and play running baseball.

The moment Lee Jung-hoo goes to the MLB, the Kiwoom Heroes will likely have a reason to smile. Lee Jung-hoo is not a free agent in Korea. The Kiwoom Heroes are expected to retain their reserve rights while he voluntarily withdraws. According to the Korean-American Posting System rules, the Kiwoom Heroes will receive a transfer fee (posting cost).

The Korean-American Posting System was revised in July 2018. If the total contract amount is $25 million or less, 20% of the total amount is the posting fee. For contracts between $25 million and $50 million, the posting fee is 20% of $25 million ($5 million) plus 17.5% of the amount exceeding $25 million. If the contract amount exceeds $50 million, the posting fee is 20% of $25 million ($5 million), 17.5% ($4.375 million), and 15% of the amount exceeding $50 million.

If Lee Jung-hoo actually signs a contract worth $56 million, it will be calculated as $5 million + $4.375 million + $900,000. The Kiwoom Heroes will receive a lump sum of $10.275 million from the team that signs Lee Jung-hoo. If we consider that the annual operating cost of a KBO League team is at least 40 billion KRW ($30.4 million), the Kiwoom Heroes will be making about 34% of their annual operating cost by nurturing one player well.

The total contract amount for Lee Jung-hoo could potentially increase, so it should be considered a profitable deal for the Kiwoom Heroes. It wouldn’t be wrong to say that Lee Jung-hoo contributes to the sustainability of the Kiwoom Heroes even after he takes off his Kiwoom uniform.

On the other hand, 13.5 billion KRW is equivalent to the total value of a decent S-class FA. Based on the 2022-2023 FA market, only two players, Yang Eui-ji (Doosan, 4+2 years, 15.2 billion KRW) and Park Min-woo (NC, 5+3 years, 14 billion KRW), signed contracts worth more than 13.5 billion KRW. It’s hard to buy such players, but the Kiwoom Heroes are set to make enough money to afford such a player.

By. Kim Jin Sung