Baseball Musings: Matsuzaka Deal

December 13, 2006

Matsuzaka Deal

Jon Heyman at SI.com reports on the deal (thanks to James Dreier for the link):

Daisuke Matsuzaka has reached a deal with the Boston Red Sox for six years, $52 million, a source close to the negotiations has told SI.com. The deal contains escalator clauses that could bring it up to $60 million.

I must admit I find that number surprisingly low, given that Boras seemed to have the upper hand in the negotiations. I wonder if the $52 millions was a point of pride, that Matsuzaka receive more money than the bid? If he's as good as scouts believe, $8.5 million a year is a low salary. I'm guessing that Matsuzaka wanted to play in the US more than he wanted to get a market value salary.

Now, I'm sure the Red Sox are looking at it as $17 million a year, given what they paid the Lions. I'm surprised Matsuzaka didn't go for a shorter term deal, where he could be a free agent after three years. It's possible the Red Sox wanted to get the most for their $51 million, so they wanted to lock up the pitcher to a long term deal.

Either way, the pitcher made out very well. He's a wealthy man, and now the Red Sox will wait and see if their $103 million investment pays off on the field and in international revenue.

Update: Henry says there is no deal yet. I believe that's a technicallity. Daisuke still needs to undergo a physical, and there's always little things that come up. With them on the plane, however, my bet is the deal is likely to be completed.

Posted by David Pinto at 03:27 PM | Pitchers | TrackBack (0)

Comments

I was somewhat skeptical in your supposition that Boras had the upper hand, though. Part of the problem with Boras pulling out and letting his customer walk is that he loses credibility, not just with Seibu (who from all accounts is desperately cash-strapped, and thus needed the $51M posting fee), but with Japanese baseball generally. The Red Sox had a similar problem; both sides needed to arrive at a contract. The fluff we read earlier in the week about the possibility that both sides would reach a permanent impasse were just public relations smoke.

Posted by: Rob McMillin at December 13, 2006 03:53 PM

I agree - I don't think Boras had the upper hand at all. In fact, looking back at his very recent public speeches, it seemed like he was bringing up the "unfairness" of the posting system as some kind of premeditated excuse to save face when he didn't get his usual ludicrous deal from the Sox. Kind of a way to say to other prospective clients (or to his own ego), "Look I'm still The Man, but there's only so much I can do in this flawed system."

Posted by: Mike at December 13, 2006 04:07 PM

I think the issue is that Matsuzaka needed to get what he'd reasonably get two years from now, in aggregate terms. That is, let's say he plays out the 2007 and 2008 seasons in Japan, then comes here, and gets a four-year contract. He'd get at least $10m/yr for those four years, and probably more, absent an injury or a regression. A 4 year, $52m deal seems low, but close to right.

He basically gives the Red Sox the first two years for free in exchange for the security of being guaranteed that four year, $52m contract after the two years are up.

Posted by: DNL at December 13, 2006 04:08 PM

Rob and Mike, I based that on the Red Sox blinking first. Boras, by doing nothing, was making the Red Sox come to him. That usually means you're in control. The thing I didn't know (and still don't) is how willing Matsuzaka was to return to Japan. If he wasn't willing at all, then Boras was all posturing.

Posted by: David Pinto at December 13, 2006 04:09 PM

Good points, both DNL and David Pinto. DNL, that really does make it more comprehensible to me why DM didn't prefer sitting tight in Japan and waiting for a monster deal later.

Posted by: Jamie at December 13, 2006 04:14 PM

The Red Sox may benefit from this on the field but have no way to benefit financially. All tickets are sold out and merchandising money is split evenly.

With no other team to play off of the Red Sox, Boras had no leverage except the deadline.

I'd never wish an injury on a player, but I definitely hope this guy turns out to be a very average pitcher. The only way teams will stop doing this crap is if they repeatedly get burned.

Posted by: LargeBill at December 13, 2006 04:20 PM

Maybe the plane will crash.

Posted by: Reno at December 13, 2006 04:46 PM

All tickets are sold out and merchandising money is split evenly.

The ticket prices haven't been set for 2008 or any of the other Matsuzaka seasons, nor have any tickets been sold.

Posted by: Josh at December 13, 2006 04:57 PM

The Red Sox will take in a ton of cash from Japan though, LargeBill. Matsuzaka is like a national hero in that country and the Japanese will want NESN to watch his games, and thus become Red Sox fans theoretically.

Posted by: Ryan at December 13, 2006 05:12 PM

The Red Sox own 80% of the NESN television network (the Bruins own 20%) - airing games in standard and hi-def. I'm assuming that the signing will boost ratings in the 6 states where NESN is available and also expand NESN into a national context in Japan - a "market" with 128 million population.

This was as much a network content deal and brand marketing campaign as it was a baseball deal.

Posted by: ABV at December 13, 2006 05:33 PM

HAVE WE GONE COMPLETELY NUTS STOP THE WORLD I WANT TO GET OFF SPORTS AND THE MANAGEMENT OF SAME IS ABSURD

Posted by: sosidegeorge at December 13, 2006 06:49 PM

HAVE WE GONE COMPLETELY NUTS STOP THE WORLD I WANT TO GET OFF SPORTS AND THE MANAGEMENT OF SAME IS ABSURD

Posted by: sosidegeorge at December 13, 2006 06:50 PM

Wow, all caps and 2 posts. It's like surround sound yelling!

Posted by: DavidC at December 13, 2006 09:24 PM

$52 mil seems low, relatively speaking, unless as has been speculated, some of the $51 mil posting fee finds it's way back to Matsuzaka through Seibu.

Any money he would get from Seibu would be free from US tax, and would also be free from Boras' commission. Why would Seibu agree? If they are strapped for cash, 75% of something is better than 100% of nothing, which is what they would get if Matsuzaka refused Boston's offer.

More likely, Matsuzaka understood how much endorsement and other income he could realize by playing in the US for a famous team and figured the $52 mil was just a base for his total compensation down the road.

I'm wondering what kind of season Boston thinks Matsuzaka needs to have to justify this deal? 15 wins? 200 IP? How high/low has Boston set the bar?

Posted by: George S at December 13, 2006 10:03 PM

I doubt that Epstein thinks in terms of 'now he needs to be this good'. He's smart enough to know that all baseball player contracts are risks and gambles; he's gambling something like 'there's a 5% chance this guy is the late-90s version of Pedro Martinez, 10% chance this guy is Johan Santana, 40% chance he's Barry Zito, 25% chance he's Jarrod Washburn, and 20% chance he's Gil Meche'. Even if all Matsuzaka is is Barry Zito, Epstein knows that he is and is comfortable with paying for the chance that Matsuzaka is Johan Santana.

Posted by: NBarnes at December 14, 2006 01:51 AM

NBarnes - I think you nailed it. They weigh the likelihood of certain future scenarios and place their bet based on the collective value of those outcomes. It's like calling a bet based on "pot odds" in poker.

Tim
http://www.redsoxtimes.com

Posted by: Tim Daloisio at December 14, 2006 11:27 AM

The pundits who said that it was Matsuzaka who made this signing possible and not Boras are correct. According to Japanese press reports, as the negotiations got closer to the deadline with nothing concluded, Matsuzaka got concerned that maybe Boras, who actually has had little success in landing previous Japanese clients (Hanshin lefty Tsuyoshi Shimoyanagi comes to mind) jobs in MLB, would alienate the Red Sox, resulting in a very embarrassing return to the Lions after all the sturm und drang over his leaving. Matsuzaka flew to the U.S., and this is my supposition only, as much to tell Boras to get a deal done and be damned quick about it, as to announce his addition to the club.

I believe that Matsuzaka is well chuffed at the bucks he is getting. He is already a multimillionaire and has come to the U.S. because he wants to play at the ultimate level. He also has to feel that he has performed "onkaeshi (expression of gratitude for past favors rendered)" to Seibu by eliciting the $51 million, something that is very important in the Japanese moral system.

Boras badly overreached and there was speculation in the Japanese press that Boston had been feeling some buyer's remorse due to Scott's outrageous contract demands. There were even a couple of headlines that some projects that Seibu had on the drawing board as a result of the bid were expected to now be history since it was likely that the cash wasn't going to materialize. Happily for the Lions organization, it will.

I hope that when Lotte closer Masahide Kobayashi (fastball up to 94mph, shuuto, slider, forkball) and Chunichi five tool superstar outfielder Kosuke Fukudome earn their free agent rights next season, they will choose a less greedy agent than Boras. Same goes for Softbank fireballing righty Nagisa Arakaki (91-96mph fastball that sinks down and in, slider, cutter) and Hanshin closer Kyuji Fujikawa (fastball 93-94, devastating forkball, changeup, good slider, nice curveball, adding a cutter) who are thought to want to be posted after the end of the 2007 schedule.

Posted by: Gary Garland at December 16, 2006 07:36 PM

jonny897

Posted by: jonny304 at December 17, 2006 03:40 AM

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