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Wednesday, November 15, 2006

ESPN: Red Sox’s winning bid for Matsuzaka—$51.1 million

Wow.

NAPLES, Fla.—The Boston Red Sox emerged Tuesday night as winners of the bidding for Daisuke Matsuzaka with a $51.1 million offer and have 30 days to sign the Japanese pitcher to a contract.

The Seibu Lions of Japan’s Pacific League announced they had accepted the high bid—ESPN’s Peter Gammons this week reported the figure to be $42 million—for their prized pitcher, and the major league commissioner’s office simultaneously confirmed at the general managers’ meetings that the Red Sox had made the offer.

Kyle S Posted: November 15, 2006 at 02:43 AM | 363 comment(s) Login to Bookmark
  Tags: japan, red sox

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   1. Mister High Standards Posted: November 15, 2006 at 03:47 AM (#2238086)
<Drawl>
Well... the price of poker just went up boys.
</Drawl>
   2. Mork Posted: November 15, 2006 at 03:47 AM (#2238087)
Shenanigans.
   3. speeds Posted: November 15, 2006 at 03:47 AM (#2238088)
Seems like lots.
   4. The Anthony Kennedy of BBTF (Scott) Posted: November 15, 2006 at 03:50 AM (#2238094)
i'd love to know what other teams bid.
   5. bibigon Posted: November 15, 2006 at 03:51 AM (#2238096)
Is anyone wondering where the $42M figures from Gammons and the $38-45M range from Olney came from? Those are specific numbers - someone has to have made them up, right?

What's the journalistic process that leads to you getting the team right, but the number wrong? Were their sources lying to them, or what?
   6. bibigon Posted: November 15, 2006 at 03:53 AM (#2238100)
i'd love to know what other teams bid.


We likely won't find out officially until he's signed. Before then, it's in the interests of the 2nd place team to keep it quiet. And since it's not a tremendously important issue, we won't be seeing the same efforts by journalists to find out.
   7. Banta Posted: November 15, 2006 at 03:54 AM (#2238102)
A lot to pay to talk to a guy who's gonna have an ERA over 4 in the American League East next year.

I don't really have anything to back that statement up (except that he doesn't really look like he has the type of stuff to strike out 9 per 9 in the majors), but I want to get it on record just in case.
   8. nycfan Posted: November 15, 2006 at 03:54 AM (#2238103)
I posted this in the sox therapy thread, but i'm sure this will become the new big Matsuzaka thread, so i'll ask again:

Do the Sox have to pay Seibu the 51 mil as soon as they sign him? If so, then that's a lot different than just averaging it out over the life of the contract because of inflation and the inability to invest that money. Maybe someone with an economics background could help me out here. what's the difference between, say, a 5-year deal that is 20 million per year and one that is 60 million in the first year and 10 million for each year after that?
   9. Darren Posted: November 15, 2006 at 03:56 AM (#2238107)
Finally, we have a place to discuss this deal. What does everyone think?
   10. Шĥy Posted: November 15, 2006 at 03:57 AM (#2238108)
i'd love to know what other teams bid.

According to the NY Daily News, the Mets bid 38 mil, the Yankees bid about 30 mil, and the Rangers bid about 27 mil.
   11. Ignatius J. Reilly Posted: November 15, 2006 at 03:59 AM (#2238114)
So the Red Sox thought the Yanks would bid as high as 50 mill?
   12. Who Swished In Your Cornflakes? Posted: November 15, 2006 at 03:59 AM (#2238115)
Jebus.
   13. NJ in DC (Now with Wife!) Posted: November 15, 2006 at 04:01 AM (#2238118)
For the record, I think Matsuzaka's going to be a 3.50 to 4 ERA guy, which isn't worth 51.1 million, obviously.
   14. bibigon Posted: November 15, 2006 at 04:01 AM (#2238119)
Do the Sox have to pay Seibu the 51 mil as soon as they sign him?


They have five days after signing to pay up.
   15. bibigon Posted: November 15, 2006 at 04:02 AM (#2238121)
So the Red Sox thought the Yanks would bid as high as 50 mill?


No, probably not, but this is how it often happens with a blind bidding process - the top bid blows the 2nd bid out of the water.
   16. 5.00, .280/.320/.400, 4th outfielder Posted: November 15, 2006 at 04:03 AM (#2238122)
You have to assume that there's some form of kickback going on here.
   17. TVerik, the gum-snappin' hairdresser Posted: November 15, 2006 at 04:06 AM (#2238123)
While we're reposting:

I haven't read all of these threads yet. So someone may have brought this up. But why does the team that wins the posting bid get all of their money back if they can't come up with a contract? Seems to me that the best way to keep the bidding serious (and put a stop to the shenanigans that I've seen speculated about "blocking") is to require the team to pay some percentage of that initial amount - cases could be made for 10% or even 50% - into some pool - Bud's slush fund or something.

Otherwise it certainly looks easy to manipulate the system - win the bidding war and then submit an offer that you don't think will be taken, but is still high enough not to set off alarms in Bud-land.

My reading of this system is that the Sox are win-win here; either they get a good pitcher at a good price or they prevent that pitcher from beating them nearly for free. If there were $ that they would lose at the end of an unsuccessful negotiating round, that would motivate the sides to come to a deal, which is the entire point of this posting process, right?
   18. Mork Posted: November 15, 2006 at 04:10 AM (#2238127)
Does anyone now seriously expect them to sign him without a back-door payment by the Lions?

Someone give me an example of a deal that will make sense to both parties, when this outlay is taken into account.

To put it another way, if you were Matsuzaka/Boras, with genuine free agency one year away, what is the lowest deal you'd take to go to the Red Sox now? And when you add the $51 million, even offsetting the luxury tax distortion and any revenue offset, would you pay it if you were the Red Sox?
   19. Sean in Sydney Posted: November 15, 2006 at 04:10 AM (#2238128)
Word is Boras will want to get him a 3 year deal, establish himself in MLB and then be available for a new mea deal. But by bidding so highly it's expected the sox will want to spread the up front cost over as many years as possible. So he's 26 now? I'd expect a 5-6 year offer from the sox at $10m per, Boras to counter with 3 year $12m per. For what it's worth I think it says more about what the Sox think of the available crop of FA Starters than anything else :) Note too the amount doesn't count against the luxury tax, so they still may be in the running for someone like Drew.
   20. PhillyBooster Posted: November 15, 2006 at 04:11 AM (#2238129)
Wow! Brilliant bid, and a precursor to a great signing!

This is the first step to Matsuzaka leading the Sox to multiple pennants, and he'll pay back every penny spent on him in spades.
   21. bibigon Posted: November 15, 2006 at 04:13 AM (#2238131)

To put it another way, if you were Matsuzaka/Boras, with genuine free agency one year away, what is the lowest deal you'd take to go to the Red Sox now? And when you add the $51 million, even offsetting the luxury tax distortion and any revenue offset, would you pay it if you were the Red Sox?


Well, it's important to note he's not a FA until May 1 of 2008, so that would really put a dent in his free agency plans for 2008. He can't even negotiate until May 1, let alone secure a huge payday.

My guess is the Sox sign him for $4/45 or something, but they forfeit the arbitration rights for the last two yeas.
   22. greenback calls it soccer Posted: November 15, 2006 at 04:15 AM (#2238134)
This is the first step to Matsuzaka leading the Sox to multiple pennants, and he'll pay back every penny spent on him in spades.

And everybody will get a pony.
   23. LSR Posted: November 15, 2006 at 04:16 AM (#2238135)
So basically the Red Sox feel that the right to talk to Matsuzaka is worth more than the entire starting rotation of the Florida Marlins ... plus the rest of the roster as well ... and quite a bit more. Unreal.
   24. bibigon Posted: November 15, 2006 at 04:18 AM (#2238137)
So basically the Red Sox feel that the right to talk to Matsuzaka is worth more than the entire starting rotation of the Florida Marlins ... plus the rest of the roster as well ... and quite a bit more. Unreal.


Or about as much as Johnny Damon for four years. That's the part that makes me laugh.
   25. Banta Posted: November 15, 2006 at 04:21 AM (#2238138)
Or about as much as Johnny Damon for four years.

Or Pedro.
   26. LSR Posted: November 15, 2006 at 04:22 AM (#2238141)
Or about as much as Johnny Damon for four years. That's the part that makes me laugh.

Hmmm ... when you put it that way it does start to make sense. Scary.
   27. Randomly Fluctuating Defensive Metric Posted: November 15, 2006 at 04:22 AM (#2238142)
I said it once and I'll say it again. 51.1 mil?

Agent Flood: Shieeeeeettttttttt...
   28. bibigon Posted: November 15, 2006 at 04:23 AM (#2238143)
Or Pedro.


Yeah, but Pedro doesn't sting quite as much given his current status. Damon has yet to fail, so he has more of a grass is greener feel.
   29. Sam M. Posted: November 15, 2006 at 04:23 AM (#2238144)
My guess is the Sox sign him for $4/45 or something, but they forfeit the arbitration rights for the last two years.

You know, there's just no contract you can hypothesize that doesn't make the total investment eye-popping. $45M + $51M . . . . $96M for four years . . . . $24M/year for Matsuzaka. Yikes.

I know CFiJ says that's not how the accounting works. Fine. But still . . . yikes.
   30. CraigK Posted: November 15, 2006 at 04:25 AM (#2238145)
Jesus H. Christ; it was higher than anyone thought.

Boy, this is going to be a fun offseason.

I'm calling it here. Jeff Suppan gets a 5 year, 60 million deal and Carlos Lee gets a 5 year, 80 million deal.

This offseason will be ####### crazy. In a few years, people will be looking at A-Rod's contract as a bargain.
   31. Mork Posted: November 15, 2006 at 04:25 AM (#2238146)
My guess is the Sox sign him for $4/45 or something, but they forfeit the arbitration rights for the last two yeas.

OK, I think that's a little optimistic on behalf of the club, but even if they got him for that that, they'd be paying $24 million per year for a pitcher who's never pitched in the major leagues, that they probably won't be able to fully insure.

I don't believe they have any intention of doing that.
   32. Shredder Posted: November 15, 2006 at 04:27 AM (#2238149)
My guess is the Sox sign him for $4/45 or something, but they forfeit the arbitration rights for the last two yeas.

Still makes no sense. It's a 4 year $95MM deal for the Red Sox, which is nuts. I agree with Mork. I'd be surprised if the signed him for anything (assuming everything is on the level). If I'm Boras, I turn down the low ball, take my money in Japan, and become a free agent in two years. Any signing really makes no sense now for the sox unless they sign him to about a 10 year deal. Hell, even if they drugged Boras and got him for five years and $25MM, that's $15MM per season for a guy who has never pitched in the majors.
   33. Phil Coorey is a T-Shirt Salesman Posted: November 15, 2006 at 04:28 AM (#2238151)
In a few years, people will be looking at A-Rod's contract as a bargain.

I always thought it was!!!

:)
   34. Mister High Standards Posted: November 15, 2006 at 04:31 AM (#2238154)
So basically the Red Sox feel that the right to talk to Matsuzaka is worth more than the entire starting rotation of the Florida Marlins ... plus the rest of the roster as well ... and quite a bit more. Unreal.


No actually it doesn't mean this at all gomer pile. It means:

Expected Revenue/Savings >= 51 + [(marginal wins produced*revenue associated with a marginal win)- cost of marginal win]

The problem here is we don't have a great idea of any of these variables.
   35. The Original SJ Posted: November 15, 2006 at 04:31 AM (#2238155)
I would love to see a cancelled check that says 51.1 million. There is very little chance all of it stays in Japan.
   36. bibigon Posted: November 15, 2006 at 04:35 AM (#2238161)
In a few years, people will be looking at A-Rod's contract as a bargain.


Hey! We might actually have a chance to see A-Rod "highest paid player in baseball" clause come into play. If anyone is making more than him, then A-Rod gets a bump to $1M more than that player.
   37. cercopithecus aethiops Posted: November 15, 2006 at 04:35 AM (#2238162)
Does anyone now seriously expect them to sign him without a back-door payment by the Lions?

Yes. Put yourself in Seibu's shoes -- the Sox ask you to kick back anything more than $13M, you drop a line to Selig about this outrageous breach of the agreement, and Matsuzaka's rights go to the Mets, who are paying cash, no questions asked. If the Sox are asking for a smaller kickback then that, what's the point? They're still paying a sh!tload, and they're still risking the whole thing if some enterprising investigative journalist exposes their scheming.

Someone give me an example of a deal that will make sense to both parties, when this outlay is taken into account.

6/54. It will make perfect sense when Zito signs for 6/105 a few days later. The trouble is that Boras will want a shorter deal and a release from any remaining arb years. The Sox will be demanding that he take more money for more years. Boras will be insisting on less money for fewer years. A sure sign that the apocalypse is nigh.
   38. The Original SJ Posted: November 15, 2006 at 04:36 AM (#2238163)
Gomer Pile? How trendy.
   39. Buzzards Bay Posted: November 15, 2006 at 04:36 AM (#2238164)
chadbradfordwannabe if you're out there what is your take on his innings pitched,his delivery etc
   40. Stan Papi Posted: November 15, 2006 at 04:37 AM (#2238165)
The email redsox.com sent out says

Almost a week after receiving the highest bid for 26-year-old right-hander Daisuke Matsuzaka, the Seibu Lions on Monday notified Major League Baseball that they would accept the $42 million offer submitted by the Red Sox.
   41. sasquatch83 Posted: November 15, 2006 at 04:38 AM (#2238166)
It should be pointed out that the closest person to the actual bid wasn't Olney or Gammons, but Orestes Destrade.
   42. cercopithecus aethiops Posted: November 15, 2006 at 04:38 AM (#2238168)
I would love to see a cancelled check that says 51.1 million.

I rather expect that Steinbrenner will insist on seeing it. Maybe he'll let you have a peek.
   43. Mork Posted: November 15, 2006 at 04:39 AM (#2238169)
6/54.

Why on earth would he take that when he could wait a year and get nearly double?
   44. Mister High Standards Posted: November 15, 2006 at 04:40 AM (#2238170)
Sorry - just watched Full Metal Jacket. One of the most quotable movies ever.

I have to tell you, it's getting a bit annoying to see smart and informed posters (Sam M) all ready lumping these two expenses together. There is no sound reason to associate 100% of the expense to player payroll... some portion should be associated with marketing... but how much? No one has a clue besides one guy on SOSH... who is Joe Schmoe for all we know.

BTW: I agree with elenchi... the intresting part here will be the interaction between Boras and the Sox as they flip flop roles when looking at contract length. I expect the Sox knew going in, what the Matzuka was looking for, and that contributed to their bid.
   45. Group Captain Mandrake Posted: November 15, 2006 at 04:42 AM (#2238173)
It should be pointed out that the closest person to the actual bid wasn't Olney or Gammons, but<strike> Orestes Destrade</strike> Frank Stallone.


Fixed
   46. Shredder Posted: November 15, 2006 at 04:42 AM (#2238174)
The problem here is we don't have a great idea of any of these variables.

Well, Considering the Sox already have the highest ticket prices in the league, and they already basically play to 100% capacity, unless Matsuzaka can bring some tools and add about 20,000 seats to Fenway, the marginal increase in revenue probably isn't going to be anywhere near $50MM.

Maybe they think they're guaranteed to sell 250,000 jerseys.
   47. Sam M. Posted: November 15, 2006 at 04:43 AM (#2238175)
Almost a week after receiving the highest bid for 26-year-old right-hander Daisuke Matsuzaka, the Seibu Lions on Monday notified Major League Baseball that they would accept the $42 million offer submitted by the Red Sox.

Curiouser and curiouser . . . . This is more confusing than the frigging BCS.
   48. Who Swished In Your Cornflakes? Posted: November 15, 2006 at 04:44 AM (#2238178)
I expect the Sox knew going in, what the Matzuka was looking for, and that contributed to their bid.

I read that as being pronounced "Mat-ZOO-kah". Which, if applied in reference to his arm, is both pretty cool and pretty funny.
   49. bibigon Posted: November 15, 2006 at 04:47 AM (#2238180)
Well, Considering the Sox already have the highest ticket prices in the league, and they already basically play to 100% capacity, unless Matsuzaka can bring some tools and add about 20,000 seats to Fenway, the marginal increase in revenue probably isn't going to be anywhere near $50MM.


How exactly do you think they keep those ticket prices so high and sell out every game? It doesn't happen in a vacuum you know... If the Red Sox are not in contention for the playoffs next year, that sellout streak is over.
   50. Shredder Posted: November 15, 2006 at 04:49 AM (#2238183)
some portion should be associated with marketing

I disagree. If, for example, the Angels sign Vlad to a 5 year, $75MM contract, all of that amount is associated with player payroll, despite the fact that they clearly believe some of it will be made up with marketing. I think most people who post here realized that part of what a team decides to spend on a free is based on how much they plan to recover through marketing of that player. When I added the posting fee to a contract amount in post #32, I was doing so that I could compare apples to apples. I'd imagine that I'm not the only person who makes that assumption. I mean, that's the idea, right? Comparing apples to apples?
   51. cercopithecus aethiops Posted: November 15, 2006 at 04:49 AM (#2238185)
Why on earth would he take that when he could wait a year and get nearly double?

I said I don't think he'd take it, but it makes a certain amount of sense because it's a ton of money and he's assuming a lot of risk by waiting. He'll make $3M in Japan next year, and he won't be able to negotiate with all MLB teams next winter -- he'll have to wait until May of 2008 -- service time in Japan is based on calendar days, not seasons. If the Sox were willing to front load it enough, it could make plenty enough sense to Matsuzaka.

But like I said, he'll want a earlier out. The Red Sox will want a longer term to amortize the posting fee and continue to tap whatever revenue streams he opens for them. That, much more than annual salary, is going to be the sticking point.
   52. Mister High Standards Posted: November 15, 2006 at 04:52 AM (#2238188)
the marginal increase in revenue probably isn't going to be anywhere near $50MM.


I certainly follow the RedSox closer than you do, and I don't have a clue if that statement is true or not. You're putting a Japanesse national sports hero in the most baseball crazy market in the world (no offense to NYC, or STL)... If Matzuka is just another number 2... then yeah it might be tough... but if this guy is a Cy Young type... which I expect based on the Sox bid, they think he is... well thats a synergy that none of us have any idea how it will play out.

Also, I expect if the RedSox long term goal is to play ball on the same field as the Yankees, then they need to make inroads into this market so that when hot Japanesse free agents hit the market they don't automaticlly just want to sign with the Yankees (or mariners), so that likly has some impact on the dollars.... there are hundreds of variables... and we are in the dark.
   53. nycfan Posted: November 15, 2006 at 04:53 AM (#2238190)
The question seems to be how much $51m (or maybe $42m) in non-payroll dollars equal in payroll dollars. You can't just ignore the posting fee by saying it isn't going to payroll, because at least a portion of that money could have gone to payroll if they didn't spend it on the posting.
   54. Raskolnikov Posted: November 15, 2006 at 04:55 AM (#2238191)
Somewhere in Cuba, Yulieski Gourriel is bawling.
   55. Sam M. Posted: November 15, 2006 at 04:56 AM (#2238193)
I have to tell you, it's getting a bit annoying to see smart and informed posters (Sam M) all ready lumping these two expenses together. There is no sound reason to associate 100% of the expense to player payroll... some portion should be associated with marketing.

The point is, however you allocate the $51.1M (or $42M, or whatever the heck it really is), this is a player acquisition and payroll expense. To me, the fee is most analogous to a signing bonus paid to a draftee, at least from the team's perspective (obviously, from the player's perspective, it's not analogous at all since he isn't getting the money). It is money paid prior to the player ever playing a game, for the privilege of getting him into your system and away from every other organization. No team, of course, counts bonus money in its player payroll.

But it is part of player acquisition. The fact that the Sox think they can recoup this expense via marketing is all well and good; if they are right, it makes them smart investors. If they're wrong, then maybe they lose some $$$, which isn't necessarily the worst sin in the world if Matsuzaka nevertheless helps them substantially on the field. But recouping via marketing doesn't make it part of their marketing budget, any more than signing a traditional FA and then trying to market him effectively to recoup THAT investment makes his salary part of the marketing budget.

So anyway, to me it is convenient shorthand for us, in thinking of how much Matsuzaka is costing the Red Sox out of pocket -- before we think about how they will account for it, and before we think about whether they will profit in the long run -- to put together how much they are paying Seibu, and how much they will be paying Matsu.
   56. CraigK Posted: November 15, 2006 at 04:56 AM (#2238194)
So, uh, has anyone thought what would happen if he blows his arm out in a year?

Almost $100M for one year. Yikes.

I still think they should have just go after, say, Zito AND Schmidt; less risk with them.
   57. Mister High Standards Posted: November 15, 2006 at 04:58 AM (#2238197)
Shredder - because the marketing/business opportunities provided by Matzuka are vastly different than any other player in baseball history. Certainly different than a "run of the mill" superstar (ha ha what a term run of the mill syperstar) like vlad.

I obviously disagree with you claiming your comparision is apples to apples.
   58. bibigon Posted: November 15, 2006 at 04:58 AM (#2238198)
How would a May 1, 2008 negotiation process work exactly is my question. Boras is going to need to be negotiating with teams who already have five starters, since nobody is going to be going into the season counting on landing Matsuzaka.

It's not impossible obviously, but I'd guess it wouldn't be trivial either. Realistically, he's a June-September player for 2008.

On the other hand, the dollars may be different enough that it makes sense.

By the way, Shredder is right - these accounting games are pretty silly. If a team signs Matsuzaka for 5 years, $100M on May 1, 2008, then they're getting the same marketing benefits that the Red Sox are. Why some people want to say this $51.1M doesn't count is beyond me. (Other than the luxury tax implications that is.)
   59. CraigK Posted: November 15, 2006 at 05:00 AM (#2238199)
Oh, and:

Note to self: learn to pitch, and go to Japan.
   60. Raskolnikov Posted: November 15, 2006 at 05:01 AM (#2238200)
Shredder - because the marketing/business opportunities provided by Matzuka are vastly different than any other player in baseball history. Certainly different than a "run of the mill" superstar (ha ha what a term run of the mill syperstar) like vlad.

I don't see it. He's not as popular as Ichiro, who is revered like a deity there. Hideki Matsui was a huge star for the most popular team, Tokyo. At best, Matsuzaka is no.3. And if he struggles? He'll be yesterday's news. I'm sure Henry and Theo have thought about that risk as well.
   61. sublime Posted: November 15, 2006 at 05:03 AM (#2238202)
A lot to pay to talk to a guy who's gonna have an ERA over 4 in the American League East next year.


how many pitchers wouldnt?
   62. Mork Posted: November 15, 2006 at 05:04 AM (#2238203)
Shredder - because the marketing/business opportunities provided by Matzuka are vastly different than any other player in baseball history.

I don't think so. Think Ichiro and Matsui, only with less stature in Japan.
   63. Shredder Posted: November 15, 2006 at 05:05 AM (#2238205)
If the Red Sox are not in contention for the playoffs next year, that sellout streak is over.

First of all, I think you're wrong. I doubt that attendance would drop enough to really affect revenue, especially at a place like Fenway. The Cubs routinely don't contend for a playoff spot and they still play to near full capacity. The last time the Red Sox didn't contend was 2001. They played to 96.6% of capacity that season. If you want to go back a little further, it was probably 1997, and they drew to about 80-85% of capacity that season. That was, of course, prior to baseball's resurgence beginning in 1998, and prior to winning a World Season, and prior to nine consecutive seasons in which they were actually quite good.

Second, do you really think it will cost them that much to contend for a playoff spot again? They probably have a contending team right now. Sure, like everyone else, they're flawed, and they have holes to fill, but I doubt you'd find anyone knowledgeable about baseball (speaking seriously) who would say that as everything sits right now, the Red Sox won't contend.
   64. bibigon Posted: November 15, 2006 at 05:06 AM (#2238208)
I don't see it. He's not as popular as Ichiro, who is revered like a deity there. Hideki Matsui was a huge star for the most popular team, Tokyo. At best, Matsuzaka is no.3.


I've heard varying reports on this. A lot of people say he's a bigger deal than Ichiro or Matsui are - because of that 250 pitch game in high school.

Another note on the accounting games. When people calculate the Yankees payroll, do they remove Matsui's contract and say it doesn't "count" because it has a larger marketing impact than other player signings?

Ultimately, accounting isn't what matters - it's the bottom line when all the budgets of the different departments are added together. Matsuzaka might well be worth it, but it's not because the $51.1M comes out of a different budget than the payroll budget. The Red Sox don't just have a flat amount allocated per year to their marketing budget, and a flat amount allocated to their payroll budget.
   65. pkb33 Posted: November 15, 2006 at 05:08 AM (#2238210)
We likely won't find out officially until he's signed. Before then, it's in the interests of the 2nd place team to keep it quiet. And since it's not a tremendously important issue, we won't be seeing the same efforts by journalists to find out.

The second place team is the second place team regardless of what they bid. Why do you think they care if it gets out?
   66. bibigon Posted: November 15, 2006 at 05:11 AM (#2238215)
The Cubs routinely don't contend for a playoff spot and they still play to near full capacity.


The Cubs average ticket price is $34.30 - the Red Sox average ticket price is $46.46. That's a major differential.

Second, do you really think it will cost them that much to contend for a playoff spot again? They probably have a contending team right now. Sure, like everyone else, they're flawed, and they have holes to fill, but I doubt you'd find anyone knowledgeable about baseball (speaking seriously) who would say that as everything sits right now, the Red Sox won't contend.


The Red Sox were outscored in 2006. Injuries are obviously a big part of that, but they're not all of it. No, I do not think the Red Sox as they are now are a team that would be in contention for the playoffs.
   67. Mister High Standards Posted: November 15, 2006 at 05:11 AM (#2238216)
Sam ,

It is 100% unreasonable to assume the redsox "payout" from Matsuzaka will be similar where a team gets its "payout" from other players. It also 100% inappropraite to view it as a signing bonus.

The return almost all players in MLB generate for his team is based on the wins they generate, and how much marginal revenue those wins generate for each team. That part of equation we are fairly good at figuring out, the problem is we can't only compare Matsuzaka on that basis as he will generate additional revenue, though avenues that would likly be closed to RedSox with out him.

Matsuzaka is much a business move, as a baseball move. While all moves have components of each... this one is being driven by a large exant the business aspect... which we simply don't have a good handle on.

IMHO - the only conclusion we can make is that the RedSox think Daisuke Matsuzaka will be really really good... based on their recent track record... color me skeptical.
   68. CFiJ Posted: November 15, 2006 at 05:12 AM (#2238217)
The point is, however you allocate the $51.1M (or $42M, or whatever the heck it really is),

The $51.1M comes directly from Seibu's press conference. The $42M is no doubt a leftover Gammonsrumor, used by someone who hadn't heard the actual bid.
   69. Shredder Posted: November 15, 2006 at 05:13 AM (#2238218)
Shredder - because the marketing/business opportunities provided by Matzuka are vastly different than any other player in baseball history.

Kent Brockman as Mr. High Standards: I've seen Pedro, Sandy Koufax, and Roger Clemens, and I can say without hyperbole that Matsuzaka is a million times better than all of them put together.

I mean really? Vastly different than any other player in baseball history? Really?
   70. bibigon Posted: November 15, 2006 at 05:14 AM (#2238220)
The second place team is the second place team regardless of what they bid. Why do you think they care if it gets out?


On the off chance that Selig invokes the "good faith" clause. I suspect the Red Sox are going to be a bit more willing to have the rights taken away from them if the Mets are the 2nd place team than if the Yankees were.
   71. pkb33 Posted: November 15, 2006 at 05:17 AM (#2238224)
That creates an incentive for the Mets to make it public what they have bid, though, not to keep it quiet.

I don't really see any reason for the other teams to keep their bids private. And I don't think the Red Sox have any interest either way in who was second, because they aren't trying to block they are trying to sign the guy. Thus, they won't be within a mile of the good faith clause anyway.

I'm just not seeing it, but whatever.
   72. Shredder Posted: November 15, 2006 at 05:18 AM (#2238228)
No, I do not think the Red Sox as they are now are a team that would be in contention for the playoffs.

I think you're nuts. This is the wild card era. Teams that hover a few games over .500 are in contention into September pretty much every year. Contending for the playoffs is not exactly setting the bar very high.
   73. Sean McNally Posted: November 15, 2006 at 05:20 AM (#2238232)
I've been busy and preoccupied with a bunch of things, but I'd just like to snark that Theo and Co. that are running Yankees Lite now only have $49 million to build their super awesome player development machine.
   74. bibigon Posted: November 15, 2006 at 05:22 AM (#2238235)

I've been busy and preoccupied with a bunch of things, but I'd just like to snark that Theo and Co. that are running Yankees Lite now only have $49 million to build their super awesome player development machine.


Snark is snark, but it's better if you aren't like the 4th person to make that crack.
   75. Mister High Standards Posted: November 15, 2006 at 05:24 AM (#2238237)
Kent Brockman as Mr. High Standards: I've seen Pedro, Sandy Koufax, and Roger Clemens, and I can say without hyperbole that Matsuzaka is a million times better than all of them put together.


Where did I use the word better? I used the word different. Please tell me the last time in the post draft era you have a "number 1" starter entering the talent pool, where you didn't have an open bidding, and have exclusive rights based stricly on dollars not franchise performance, where that pitcher is also considered a national sports hero in a market you've tried to tap for 4 years, where your considered a third class citizen in terms of recruiting talent far behind your only real competitor? Heck that seems like an extremly different situation to me.
   76. Don Guillote (The Cheat) Posted: November 15, 2006 at 05:24 AM (#2238238)
The numbers for other bidders will get out. They'll get fed to beat reporters by the unfortunate souls who had to settle for Gil Meche's upside at 3/$30M on the free agent market. "Hey, we couldn't get Matsuzaka, but we tried."
   77. Shredder Posted: November 15, 2006 at 05:25 AM (#2238239)
Matsuzaka is much a business move, as a baseball move. While all moves have components of each... this one is being driven by a large exant the business aspect... which we simply don't have a good handle on.

IMHO - the only conclusion we can make is that the RedSox think Daisuke Matsuzaka will be really really good... based on their recent track record... color me skeptical.


Look, there's only so much more revenue they can suck out of that fanbase. The only conclusion isn't that he's going to be really good. It's that he's going to sell a sh!tload of merchandise. Even if we speculate that a non-contending Red Sox team loses 15% of if it's ticket sales, you're arguing that paying $50MM plus whatever contract they sign him to is worth it in order to keep revenue essentially where it already was last season outside of merchandise sales. But that's a calculation that every team makes when they sign a top tier free agent (admittedly, he is somewhat unique, but there are other examples, and they're examples of players who were bigger stars in Japan before coming to the majors).
   78. bibigon Posted: November 15, 2006 at 05:25 AM (#2238241)

I think you're nuts. This is the wild card era. Teams that hover a few games over .500 are in contention into September pretty much every year. Contending for the playoffs is not exactly setting the bar very high.


In the NL, sure. 95 wins took the wild card this year in the AL however, 94 the year before, 96 the year before that, 95 the year before that, 99 the year before that, etc... The AL wild card is not the same thing as the NL wild card. An 85 win team is not likely to be in playoff contention in the AL East. They have a shot certainly, but it's not likely.
   79. Sam M. Posted: November 15, 2006 at 05:25 AM (#2238242)
It is 100% unreasonable to assume the redsox "payout" from Matsuzaka will be similar where a team gets its "payout" from other players. It also 100% inappropraite to view it as a signing bonus. . . .

That part of equation we are fairly good at figuring out, the problem is we can't only compare Matsuzaka on that basis as he will generate additional revenue, though avenues that would likly be closed to RedSox with out him.


But what I'm saying is that it for purposes of judging how much they are PAYING for him, it doesn't matter how they calculate how they are getting a return on that investment, or whether they are right about it. Those are separate and distinct questions. We can usefully say that Matsuzaka is costing the Red Sox $24M/year (assuming the numbers used in # 29). It's in that sense that it's like a signing bonus: they've paid it out; it's gone . . . now they have to ALSO pay salary, and hope it all pays off in whatever ways they hope it will: great pitching, and marketing to make money and win games.

The marketing side of it, to me, is about (a) what part of their budget we put the expense into (which I don't really care about -- that's just bookkeeping), and (b) how much of that $24M/year they end up recouping (or if they profit). That I do care about, or at least I find it interesting, because it will determine (in part) whether this was a wise move. And I certainly agree with you that the Red Sox absolutely are counting on the unique/unusual marketing gains to pay for some of those costs. We know the outlay -- and we don't know the income potential. I kind of wonder (as you do) if the Sox do, either. It's a gamble on their part.

I do think he'll be really good on the field, though.
   80. pkb33 Posted: November 15, 2006 at 05:28 AM (#2238243)
Look, there's only so much more revenue they can suck out of that fanbase.

They agree, which is why they paid for a guy who gives them access to a different, untapped fanbase.
   81. Sean McNally Posted: November 15, 2006 at 05:30 AM (#2238245)
Snark is snark, but it's better if you aren't like the 4th person to make that crack.


Like I said, it's been busy 'round here.
   82. CFiJ Posted: November 15, 2006 at 05:30 AM (#2238247)
He's not as popular as Ichiro, who is revered like a deity there. Hideki Matsui was a huge star for the most popular team, Tokyo. At best, Matsuzaka is no.3.

It's 12 of one and half a dozen of another. Ichiro was the most well-known Japanese player. Matsui topped polls of baseball fans. Matsuzaka has been on average the best pitcher since he came into the league at age 19. Ichiro and Matsui are relatively old news. No one will generate the kind of hype Ichiro did his first year, partly because there can be only one first position player from Japan, playing everyday on a team that wins 116 games. But Matsuzaka's the flavor of the month, as it were. There will be a lot more interest in him this year than in Ichiro or Matsui, unless Ichiro goes and breaks another record, or Matsui threatens to hit 55 home runs (or more).
   83. Tor Posted: November 15, 2006 at 05:35 AM (#2238253)
I agree with Mork. I think all these discussions about how much Matsuzaka is really worth because of marketing and so forth are irrelevant. The question is: why would Matsuzaka accept a contract which is artificially depressed by $50 million, when he can get a contract at market value in 1-2 years?

What usually happens when a team attempts to use exclusive negotiating rights to get a below market deal from a Scott Boras client?
   84. Mister High Standards Posted: November 15, 2006 at 05:38 AM (#2238256)
Matsuzaka is costing the Red Sox $24M/year


Is 100% useless information?

All that matters for our purposes is how much it is costing the RedSox for Matsuzaka to play baseball. Which we have no clue.

I'm not the one playing accounting games here by the way. I'm saying we have no clue how the account/economics of the situation works relative to traditional players. All I know simple addition is in appropriate.
   85. Sam M. Posted: November 15, 2006 at 05:42 AM (#2238261)
The question is: why would Matsuzaka accept a contract which is artificially depressed by $50 million, when he can get a contract at market value in 1-2 years?

That's a bit misleading. Actually, it's a lot misleading. The $50M certainly depresses Matsuzaka's market value, but it's not like he would recoup anything close to all of that as a FA. The teams bid that to capture Seibu's rights, not Matsuzaka's, so it reflects the value of the right to negotiate exclusively with Matsuzaka (which is what Seibu owned). And they were competing with one another for that exclusivity. They won't have to bid for that a year from now, and they won't be bidding blind against each other, because they won't be paying off Seibu and exclusive rights won't be for sale.

Boras has to recognize this. No doubt, Matsuzaka can get more per year for himself next year. But he won't get the entire $51M, either.
   86. JC in DC Posted: November 15, 2006 at 05:45 AM (#2238265)
I floated this point earlier, and there was no reaction to it, but maybe I'll put it as a question: Is there precedent for a player receiving so much money and matching or exceeding the expectations associated with that cost? I think the enormous outdistancing of the Sox bid of every other places an enormous pressure on this young man. Regardless of how people count the money, everyone will speak of the huge dollars the Sox spent on him and that will create media expectation against which his EVERY action will be measured. I guess that's a roundabout way of asking is it more likely he'll be Irabu or Ichiro?

Another related question: Who is the most successful Japanese SP who jumped straight from Japan to MLB?
   87. rory_b_bellows Posted: November 15, 2006 at 05:46 AM (#2238267)
I don't see how a great portion of the posting fee isn't going to go back to Matsuzaka's contract. It's the only thing that makes sense. He's obviously going to want a short contract, 3 years max, and the Red Sox can't pay him "fair" market value without including a great portion of the $51.1m. Any contract that's comparable to what an "ace" would get would just be ridiculous -- notwithstanding the great opportunities for marketing Japan, I just can't see the Red Sox giving him upwards of $25m a year for only 3 seasons. It just doesn't make sense from a baseball standpoint. The goal of the Red Sox isn't to sell jerseys in Japan, it's to win the World Series and drastically overpaying a player doesn't seem like the best way to do that.
   88. Mork Posted: November 15, 2006 at 05:47 AM (#2238268)
Is 100% useless information?

All that matters for our purposes is how much it is costing the RedSox for Matsuzaka to play baseball. Which we have no clue.

I'm not the one playing accounting games here by the way. I'm saying we have no clue how the account/economics of the situation works relative to traditional players. All I know simple addition is in appropriate.


Crap. That's exactly the way to value the payroll effect on a basis that's comparable to how we value the cost of every other player (subject to any payroll tax effect resulting from the exclusion of the posting fee from the taxable payroll).

You might then go on quite legitimately to point out that there are marketing benefits that make the $24 million or whatever paid to Matsuzaka better value than an equivalent amount paid to a different player, but to say that the $24 million isn't the appropriate point to start the discussion of value is just playing games.
   89. bibigon Posted: November 15, 2006 at 05:48 AM (#2238269)
Another related question: Who is the most successful Japanese SP who jumped straight from Japan to MLB?


Easily Hideo Nomo.
   90. pkb33 Posted: November 15, 2006 at 05:49 AM (#2238272)
I think the enormous outdistancing of the Sox bid of every other places an enormous pressure on this young man.

Newsday reports the Mets bid $40 mil, so that's not really a huge outdistancing...US free agents somewhat regularly have an $11 mil or more spread between offers. I haven't looked it up, but wasn't AJ Burnett's Blue Jays bid well more than that above his next highest offer?
   91. Raskolnikov Posted: November 15, 2006 at 05:53 AM (#2238273)
I wonder what the bid will be like when Fujikawa gets posted?

Also, isn't there supposed to be a fantastic young pitcher over in Japan right now? Won't be posted for a few years.
   92. J. Michael Neal Posted: November 15, 2006 at 06:04 AM (#2238277)
I've argued that a large chunk of the salaries of Magglio Ordonez and Ivan Rodriguez are considered by Mike Illitch to be marketing costs. That is not at all the same thing as saying that they don't count as payroll.

Also, please explain to me exactly how the Red Sox are getting access to a previously untapped fanbase. Most of the ways that a local fanbase pay into a franchise are considered league revenues, and split equally, when they come from Japan. Exactly how much signage do you think the Red Sox are going to be able to sell in Fenway that they weren't already selling?
   93. Tor Posted: November 15, 2006 at 06:05 AM (#2238278)

The $50M certainly depresses Matsuzaka's market value, but it's not like he would recoup anything close to all of that as a FA. The teams bid that to capture Seibu's rights, not Matsuzaka's, so it reflects the value of the right to negotiate exclusively with Matsuzaka (which is what Seibu owned). And they were competing with one another for that exclusivity. They won't have to bid for that a year from now, and they won't be bidding blind against each other, because they won't be paying off Seibu and exclusive rights won't be for sale.


I don't follow that reasoning. I'm not saying you are wrong. I just really don't follow it. Let's say Boston figures he is worth 4/100 to them. Ignoring the luxury tax issue (since that doesn't seem to be what you are talking about), why would they offer anything over 4/49?


Is there precedent for a player receiving so much money and matching or exceeding the expectations associated with that cost?


Pedro Martinez.
   94. Mork Posted: November 15, 2006 at 06:09 AM (#2238280)
I don't follow that reasoning. I'm not saying you are wrong. I just really don't follow it. Let's say Boston figures he is worth 4/100 to them. Ignoring the luxury tax issue (since that doesn't seem to be what you are talking about), why would they offer anything over 4/49?

I agree. To put it another way, if a team is prepared to pay a total of 4/100 consisting of a $51 million posting fee and a 4/49 player contract, why would they not be prepared to pay the player 4/100 directly (or its equivalent once the luxury tax effects are taken into account).
   95. J. Cross Posted: November 15, 2006 at 06:09 AM (#2238281)
I wonder what the bid will be like when Fujikawa gets posted?

Also, isn't there supposed to be a fantastic young pitcher over in Japan right now? Won't be posted for a few years.


I'm interested in this too. Who are the next/best Asian pitchers who could be posted? What are the chances that Kazumi Saitoh comes over in a year or two years?
   96. nycfan Posted: November 15, 2006 at 06:12 AM (#2238283)
Correct me if i'm wrong, but aren't merchandise sales shared just like international tv broadcasts? If so, then the only real advantage for the Red Sox is more money from advertising, which i can't imagine will increase profits by more than a million a year or so
   97. pkb33 Posted: November 15, 2006 at 06:17 AM (#2238284)
Also, please explain to me exactly how the Red Sox are getting access to a previously untapped fanbase. Most of the ways that a local fanbase pay into a franchise are considered league revenues, and split equally, when they come from Japan. Exactly how much signage do you think the Red Sox are going to be able to sell in Fenway that they weren't already selling?

The issue is price, not volume of ads.

For example, how much money do you suppose they are getting now from the local surplus building supply company that is the primary behind-home-plate advertiser versus what they'll get from a Japenese company for a placement during games Matsuzaka pitches?

They also will establish marketing partnerships with Japanese companies; one person in the industry on SoSH has said $3 mil is a reasonable number to expect for such a partnership and two per year are likely.

There's plenty of revenue sources which are created here. I don't think they'll pay the entire $50 mil over the next four years (or whatever the contract ends up being) but it'll pay a decent chunk of it, I'd guess.
   98. b Posted: November 15, 2006 at 06:20 AM (#2238287)
I don't see how a great portion of the posting fee isn't going to go back to Matsuzaka's contract. It's the only thing that makes sense.

If the Red Sox won with $42M and the Mets bid $40M, why would Seibu agree to do anything that is against the rules? If the Red Sox try something funny, the Mets are sitting right there with cash in hand and there are other teams in line behind them.

I think it gets a lot more interesting now. If you are the kind of guy who hires Boras, you're the kind of guy who isn't afraid to go back to Japan for a year and sign next spring if you don't get what you want, and I'm not sure that the size of this bid allows a team to actually give DM what he wants. If it were another agent, I could see the guy caving, but Boras isn't afraid to piss anyone off on behalf of his clients.
   99. bibigon Posted: November 15, 2006 at 06:21 AM (#2238288)

Correct me if i'm wrong, but aren't merchandise sales shared just like international tv broadcasts? If so, then the only real advantage for the Red Sox is more money from advertising, which i can't imagine will increase profits by more than a million a year or so


Merchandise sales outside of 200 miles are shared, yes. Where are you getting your million a year or so figure?
   100. nycfan Posted: November 15, 2006 at 06:26 AM (#2238292)
merchandise sales outside of 200 miles are shared, yes. Where are you getting your million a year or so figure?


Just a wild guess. I can't imagine Japanese companies are willing to pay that much more than American ones for ballpark ads, but i really have no idea and could be very wrong
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