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   101. nycfan Posted: November 15, 2006 at 01:56 AM (#2238025)
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?
   102. philly Posted: November 15, 2006 at 01:58 AM (#2238027)
No, you explained it very well. Since the luxury tax is 40% (right?), laying out a total of $130 million or something for him, $50 million of which is non-luxury-taxed, will cost less, or at least no more, than a $90 million contract for Zito. Add in the fact that I'm sure the Red Sox think Matsuzaka is quite a bit better than Zito, and that may just explain it.

The luxury tax issue is overrated. It's a 40% tax on the portion of the Sox payroll that is over 148M for the coming year. The Sox have never gone over by more than a few million.

If the Sox payroll, with the posting fee amortized over X years of his deal, is 150M, then the luxury tax savings is 400k. Nnot much more than a roudning error on 51.1M.
   103. rr Posted: November 15, 2006 at 02:00 AM (#2238031)
So i'm guessing the Sox are just expecting the ancillary benefits to pile up and reduce what would be the AAV to around market value.

Sure, but I don't think this is about "market value." They saw this, correctly, IMO, as an exceptional set of circumstances. They have a chance to add a young, #1 starter, stay under the cap and on Selig's rhetoric team, increase marketing opportunities and revenue streams in Japan, and screw the Yankees all at once. It is unlikely that that Selig will blow the whistle on them if they make a halfway reasonable offer, given the posting fee, Henry's coziness with Selig, and Boras' history and rep. And, if the Mets are the #2 bid, and they can confirm that, very-worst-case is not bad at all.
   104. Darren Posted: November 15, 2006 at 02:01 AM (#2238033)
I've wondered if they could do this. Dice-K wouldn't be a FA until April of '08, and I'm not sure he could play just part of the year, but without playing until April he's not eligible for free agency.

Do you mean he has to play some of April 08 before he's a FA? That's not what other Japanese gurus (CFIJ for one) have said. They say he's definitely free after 07.

Now if the posting system fails once for Seibu, would they accept an offer from Boras and Dice-K that if he's granted free agency, they get X% of his new contract? It seems like it should be legal because it doesn't screw his team -- I believe the main reason the posting process was created because of the Soriano move -- and the player isn't screwed either.

I wouldn't if I were them. Too many ways to get screwed there. They could lie to you about the amount, sign a one year deal initially then renegotiate later. Bet to get a firm $ commitment. After this negotiation, Boras should have a pretty good idea what kind of contract they could get. I'd say $20-ish mil. would make sense because it represents the difference between what Dice will make in Japan in the US in 07.
   105. Darren Posted: November 15, 2006 at 02:05 AM (#2238038)
It is unlikely that that Selig will blow the whistle on them if they make a halfway reasonable offer, given the posting fee, Henry's coziness with Selig, and Boras' history and rep.

Bud's alleged closeness to Henry won't even have to come into play. He has amply demonstrated that he will let pretty much anything go, regardless of the rules, unless he's forced to act in some way.
   106. Dr. Vaux Posted: November 15, 2006 at 02:10 AM (#2238045)
Ah. I was wondering why the Yankees were so willing to blow by the tax, thinking that it was 40% of the whole payroll!
   107. The Ghost of Sox Fans Past Posted: November 15, 2006 at 02:12 AM (#2238048)
Ghost, you explained it well, but I don't think Boras will give a ####. He certainly won't be willing to knock the full $51 mil off the contract total.

You are right; the deal won't be $51 million less. However, Boras has to realize that the posting fee expense is one factor that the Sox have to consider when they evaluate any offer - it's the marginal expense to them that matters, whether DM gets it or Seibu. In the same way, the Sox have to look at the alternatives available to the player and agent. It helps Boras that a few of his clients have JDDrew-ed (played elsewhere for a year rather than sign). That is the weapon that Boras and DM have. ANd better thatn Drew, DM has the chance to be a FA with no $51 mil in additional cost attached to him.

It's hard to factor the lux tax in directly, though Vlad gave it a reasonable shot. The Red Sox have worked to keep under it, and I read that was their intention this year, too. So would they really get Zito and pay the tax, or would they adjust elsewhere to stay under? Remember, the tax bite in higher every succeeding year that a given team goes over the limit, so breaking that ceiling one year has ramifications in future seasons, too.
   108. Darren Posted: November 15, 2006 at 02:16 AM (#2238056)
FWIW, it doesn't look like that $ amount is official. MLB.com says the amount wasn't released, but that the sources are media outlets and baseball officials. They also say that it's between $42 and $50 mil.
   109. PJ Martinez Posted: November 15, 2006 at 02:19 AM (#2238059)
So, who's going to tell us how much the other teams bid? It seems to me it's in no one's interest who would actually know to be honest about that. Teams that lost may leak that they bid, say, 25m, to suggest the Red Sox are insane. The Red Sox can leak that they had it on good authority Steinbrenner was bidding 50m plus one cent-- and could be lying through their teeth.

Are we actually going to find out? I'm certainly curious.

Oh, and I hope they sign him.
   110. Darren Posted: November 15, 2006 at 02:20 AM (#2238060)
But the Red Sox are pretty far away from the luxury tax right now. Last time I looked they had ~$98 mil committed. That leaves plenty of room for Drew, Zito, a closer, and a decent SS. I think it's more that they're desperate for a top pitcher and don't think Zito is one.
   111. Darren Posted: November 15, 2006 at 02:21 AM (#2238061)
So, who's going to tell us how much the other teams bid?

The story on Redsox.com says Texas bid $27 mil.
   112. Excel Hearts Choi Posted: November 15, 2006 at 02:22 AM (#2238063)
Do the advanced defense metrics still say Drew is a super-duper star?


Drew can get cold fusion to work...when he's healthy that is.
   113. TVerik - Dr. Velocity Posted: November 15, 2006 at 02:25 AM (#2238066)
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?
   114. CFiJ Posted: November 15, 2006 at 02:29 AM (#2238069)
There is simply no way any of us can make this make any sense. So, either it doesn't make sense or it is beyond our capacity.

It's very simple.

The posting bid is not payroll. I've tried to explain this before, and no one really believes me so I guess this will be the last time I'll try. The bid doesn't count towards the luxury tax, it's not added on to his salary over the years. From an accounting standpoint it's handled in a way completely different from payroll. If the Red Sox are smart it's on an entirely different payroll. If there's one thing Henry and Lucchino know it's how to handle money. In the end, they'll probably work it out so that the posting bid saves them money come tax time.

The upshot being that before Matsuzaka was even posted the Red Sox worked out how much they were willing to pay him, and then worked out how much they were willing to bid for him.

We have a tendency to think front offices are morons because they don't use the high-octane analytical tools we do, but I think we can afford to give the Boston front office the benefit of the doubt on this one. This isn't Hicks going all crazy and bidding against himself for A-Rod. Epstein knows how to find the value of a player. Henry and Lucchino know money, and didn't amass their fortunes by being stupid with it.

And, I will guarantee right now that Matsuzaka will play in the Majors in 2007. Yeah, in theory Boras can advise his client to hold out, but after all the press conferences, tearful good-byes at Seibu Dome, tons of ink spilled and forests of trees sacrificed to this story, there's no way Daisuke can just "go back" to NPB.
   115. CFiJ Posted: November 15, 2006 at 02:33 AM (#2238070)
FWIW, it doesn't look like that $ amount is official. MLB.com says the amount wasn't released, but that the sources are media outlets and baseball officials.

The $51.1 mil figure comes directly from Seibu, who announced it at their press conference.
   116. Darren Posted: November 15, 2006 at 02:34 AM (#2238074)
Okay, it's not treated as payroll. But you still haven't shown how the Red Sox recoup that posting fee. And I think that's essentially what's meant by the post you quoted: we just don't know enough to know why they think he's worth that.
   117. Darren Posted: November 15, 2006 at 02:36 AM (#2238075)

The $51.1 mil figure comes directly from Seibu, who announced it at their press conference.


Well then, great reporting by the US media as usual. Thanks CFiJ. Man, you sure were wrong about how much the posting fee would be! :)
   118. CFiJ Posted: November 15, 2006 at 02:37 AM (#2238076)
If the Red Sox are smart it's on an entirely different payroll.

And by "payroll" I mean "budget". Jeez! Even when I preview the post before posting I still make these stupid mistakes. If I was a medieval scribe I probably would have hung myself by now.
   119. TVerik - Dr. Velocity Posted: November 15, 2006 at 02:37 AM (#2238077)
And, I will guarantee right now that Matsuzaka will play in the Majors in 2007. Yeah, in theory Boras can advise his client to hold out, but after all the press conferences, tearful good-byes at Seibu Dome, tons of ink spilled and forests of trees sacrificed to this story, there's no way Daisuke can just "go back" to NPB.

And also there's no way that a single pitcher generates $51 million in revenue for Seibu - you would think the team is rooting hard for the player and the Sox to sign.
   120. greenback needs a ride, not ammo Posted: November 15, 2006 at 02:40 AM (#2238080)
From an accounting standpoint it's handled in a way completely different from payroll.

Nobody cares about the accounting. The economics are what matters here, and it's almost impossible to conceive how this works.
   121. CFiJ Posted: November 15, 2006 at 02:40 AM (#2238081)
Man, you sure were wrong about how much the posting fee would be! :)

Actually, I think I was right. The Yanks probably did go whole hog and bid $42 million. Then the Red Sox went wholer hog and went to $51 mil! :-)
   122. TVerik - Dr. Velocity Posted: November 15, 2006 at 02:46 AM (#2238085)
I think CFiJ is talking about "sunk costs" (from a non-technical use of the phrase). In other words, do the Sox turn around and say "the $51 million is completely gone and spent, and now we have a 30-day negotiating window with a player, starting at $0 and 0 years"?

For that to be the case, they would have had to have $51 million in a "rainy day" fund, just waiting for a promising player from Japan to post.
   123. CFiJ Posted: November 15, 2006 at 02:48 AM (#2238090)
But you still haven't shown how the Red Sox recoup that posting fee.

Because it's not a matter of simply recouping the fee. The Red Sox, as a privately owned company, don't have a bunch of shareholders to whom they have to show a profit. It's actually beneficial for them to "show" as little profit as possible come tax time. Daisuke will open up new revenue streams and bring in more money. The $51.1 mil can be played around with to offset that increase come tax time.
   124. Sam M. Posted: November 15, 2006 at 02:49 AM (#2238091)
We have a tendency to think front offices are morons because they don't use the high-octane analytical tools we do, but I think we can afford to give the Boston front office the benefit of the doubt on this one. This isn't Hicks going all crazy and bidding against himself for A-Rod. Epstein knows how to find the value of a player. Henry and Lucchino know money, and didn't amass their fortunes by being stupid with it.

Yeah, but . . . . There's an element of, "They must know what they are doing" in there, CFiJ. If -- as the current rumors suggest -- the next highest bid was in the high $30s, what was it the Red Sox knew that the other teams bidding didn't appreciate? They presumably have talent evaluators who know how to find the value of players, and execs who know money, too, and who made fortunes by not being stupid about it. And they apparently came in between $10-$15M less than the Red Sox.

It seems to me that means the Red Sox miscalculated at least on one reasonable way of looking at it: they bid more than they needed to to win the rights, by more than what we would normally say is a comfortable margin for error in a bidding process like this. Outbidding the second-place finisher by 25%??? Ouch.

Again, this assumes the rumors are correct about the second-place bid. I think they are, and that the Sox overbid. Not the worst mistake a FO ever made, certainly. When you think about it, they make $10M mistakes all the time in "bad" FA contracts. But a mistake it was.
   125. nycfan Posted: November 15, 2006 at 02:49 AM (#2238092)
CFiJ, you're saying that the Red Sox have no worries about giving Seibu $50m? It's still Henry's money, and if he really doesn't care about spending that much then it's ridiculous that the Sox haven't spent more these past few years. In particular, they have no excuse for letting Damon go to the Yankees. They sign him last year and the division race would have been a lot closer
   126. greenback needs a ride, not ammo Posted: November 15, 2006 at 02:51 AM (#2238097)
I think CFiJ is talking about "sunk costs" (from a non-technical use of the phrase). In other words, do the Sox turn around and say "the $51 million is completely gone and spent, and now we have a 30-day negotiating window with a player, starting at $0 and 0 years"?

I believe this what the Thaler calls mental accounting. The Red Sox should be a little more sophisticated than that.
   127. The Ghost of Sox Fans Past Posted: November 15, 2006 at 02:51 AM (#2238099)
Nobody cares about the accounting. The economics are what matters here, and it's almost impossible to conceive how this works.

If it's TAX accounting, the teams care. They may be able to write it off faster (or, for all I know, may have to write it off more slowly). Tax money matters.

For some reason, the Mariners have a separate funding bucket for signing bonuses for foreign free agents. They set a payroll budget, but then they can pull millions out of this for that purpose.
   128. Darren Posted: November 15, 2006 at 02:53 AM (#2238101)
Because it's not a matter of simply recouping the fee. The Red Sox, as a privately owned company, don't have a bunch of shareholders to whom they have to show a profit. It's actually beneficial for them to "show" as little profit as possible come tax time.

Okay, but they'd presumably actually like to recoup that fee (and more), even if they don't show it.

Daisuke will open up new revenue streams and bring in more money. The $51.1 mil can be played around with to offset that increase come tax time.

Okay, but HOW? What are the actual revenue streams? How do they add up to more than $51 mil?
   129. TVerik - Dr. Velocity Posted: November 15, 2006 at 02:55 AM (#2238106)
It seems to me that means the Red Sox miscalculated at least on one reasonable way of looking at it: they bid more than they needed to to win the rights, by more than what we would normally say is a comfortable margin for error in a bidding process like this. Outbidding the second-place finisher by 25%??? Ouch.

If each bidder were completely rational, bidding what that player is worth to them, then perhaps the Sox simply valued him thusly - he's more valuable to the Red Sox for reasons either performance-based or sundry.
   130. greenback needs a ride, not ammo Posted: November 15, 2006 at 02:57 AM (#2238109)
The Red Sox, as a privately owned company, don't have a bunch of shareholders to whom they have to show a profit.

I'd guess they do. Just these shareholders didn't buy the Red Sox at eTrade.
   131. TVerik - Dr. Velocity Posted: November 15, 2006 at 02:58 AM (#2238112)
Step one: Bid twice the GDP of Kazikstan on a Far East pitcher.
Step two: ???
Step three: Profit!
   132. karlmagnus Posted: November 15, 2006 at 02:59 AM (#2238113)
There's probably $15 million in revenue to the Sox from Japanese rights over 5 years. Then they can discount an offer by the difference between Matsuzaka's market rate and the $3mm he will get next year in Japan (if he's worth 20, then ignoring discounting they could offer 63/4 because that's the same as 3+60/3). That combination saves them about $32mm of the $51.1mm, more if M's worth more than 20. Then if market's $20/annum, in worst case they must pay 63/4, for total cost is 102/4 net of 12 in Japanese revenues or 22 over market. Alternatively, if they offer 103/6, their total cost is 136/6 or 16 over market. At 90/6, their total cost is 123/6 net, which is not too unreasonable IF Matsuzaka is indeed the second coming of Pedro.

The big risks, of course are (i) injury and (ii) he's the second coming of Hideo Nomo, in which case they will have hideously overpaid for something that's not unique.

Boras will probably want a 3 year deal; if I'm the Sox I offer 6 -- the maturity tradeoff is the opposite way round to most deals.
   133. greenback needs a ride, not ammo Posted: November 15, 2006 at 03:00 AM (#2238117)
If it's TAX accounting, the teams care. They may be able to write it off faster (or, for all I know, may have to write it off more slowly). Tax money matters.

Only so far as it affects the economics, and it's not that easy to optimize the economics while losing on your taxes.
   134. Curse of the Graffanino (dfan) Posted: November 15, 2006 at 03:06 AM (#2238124)
Step one: Bid twice the GDP of Kazikstan on a Far East pitcher.

Kazakhstan's GDP is $125 billion.
   135. CFiJ Posted: November 15, 2006 at 03:25 AM (#2238148)
I think CFiJ is talking about "sunk costs" (from a non-technical use of the phrase). In other words, do the Sox turn around and say "the $51 million is completely gone and spent, and now we have a 30-day negotiating window with a player, starting at $0 and 0 years"?

Not exactly. I'm suggesting rather the opposite. The common way of looking at this is to look at the posting fee first, and then figure out the salary and add that to the posting fee. I think the Sox (and the other teams) actually looked at the salary first. They thought, how much will this guy cost a year? How much are we willing to add to our payroll? And I have no doubt that they heard through the grapevine what kind of deal Boras is looking for. And once they had a range they were willing to pay set, they sat down and said, "Okay, here's our whole company budget. Based on this, how much are we willing to bid?"

Payroll analysis is relatively straightforward. A team says they have X amount of dollars to spend, and Y amount of dollars will trigger the luxury tax. If a player costs Z in payroll dollars, you have an idea how much his relative worth is. But you don't add in all the operational costs that go into signing him and taking care of the team, or various perks he may ask for in his contract. That stuff doesn't fall under payroll, so it's not important. So the fact that the posting fee does not count towards payroll makes all the difference in the world. We have no clear idea how much revenue the Red Sox make yearly, how much they expect Matsuzaka to make over the contract, how Henry plans to deal with the posting fee from a budgetary standpoint (the Mariners, for example, put Ichiro's posting fee under the same budget as scoreboard repairs), or how it will effect them come tax time (and how much money it saves the Red Sox in taxes is a very real asset).

I think marginal wins is an interesting look at how efficient teams are at utilizing their payroll budgets, but it's an oversimplification to apply that to franchise worth as a whole. We know that teams can have horrible payroll efficiency and yet turn a nice profit. And so it's even more of a mistake to just add the the posting fee to Matsuzaka's salary and total it all to determine his "worth". The real return is much more complicated than that.
   136. Sean in Sydney Posted: November 15, 2006 at 03:28 AM (#2238150)
K so, an interesting dynamic is inferred:
1) The player is making every indication he wants to sign.
2) The Sox will most likely want a long term deal to help offset the up front cost.
3) Boras will most likely want a 2-3 year deal so to put the player up for a second larger contract later on.
I'm expecting the player will not want to loose face and will sign. Interesting times to come.
   137. CFiJ Posted: November 15, 2006 at 03:33 AM (#2238157)
It seems to me that means the Red Sox miscalculated at least on one reasonable way of looking at it: they bid more than they needed to to win the rights, by more than what we would normally say is a comfortable margin for error in a bidding process like this. Outbidding the second-place finisher by 25%??? Ouch.

Again, this assumes the rumors are correct about the second-place bid. I think they are, and that the Sox overbid. Not the worst mistake a FO ever made, certainly. When you think about it, they make $10M mistakes all the time in "bad" FA contracts. But a mistake it was.


I entirely agree. Hell, I called $42 million, and even I'm surprised it went to $51 million. I thought for sure those figures were just hype and rumor. Obviously they thought that's what they needed to beat the Yankees (and possibly the Rangers, as Hicks has gone nuts with the money in the past), but they probably didn't need to bid that much.
   138. greenback needs a ride, not ammo Posted: November 15, 2006 at 03:41 AM (#2238171)
how much money it saves the Red Sox in taxes is a very real asset

Unless the Republicans instituted an obscure tax loophole for bond traders and Japanese imports, this asset is about 35% of the liability they just created.

If you're trying to say something similar to what Rauseo said -- that much of this is special "marketing" -- then I'll buy that (reluctantly), but this tax stuff doesn't pass the smell test.
   139. CFiJ Posted: November 15, 2006 at 03:44 AM (#2238176)
Okay, but HOW? What are the actual revenue streams? How do they add up to more than $51 mil?

Ask Henry! I'm sure he has it figured out! I'm speaking to the process here, I don't know any specifics.

I'd guess they do. Just these shareholders didn't buy the Red Sox at eTrade.

I'm sure you knew what I meant.
   140. greenback needs a ride, not ammo Posted: November 15, 2006 at 03:49 AM (#2238184)
I'm sure you knew what I meant.

No, I don't. GAAP and tax aren't the same thing.
   141. CFiJ Posted: November 15, 2006 at 03:49 AM (#2238186)
If you're trying to say something similar to what Rauseo said -- that much of this is special "marketing" -- then I'll buy that (reluctantly), but this tax stuff doesn't pass the smell test.

What I'm trying to say is that the economics here are much more complicated than they are being treated, and are tied into the Red Sox's financial state as a whole, for which we don't have a whole lot of clear information. The tax stuff is just an example of that. I'm not saying Henry bid $51.1 million because he thought he'd just write it off come April.
   142. CFiJ Posted: November 15, 2006 at 03:57 AM (#2238195)
No, I don't.

I'm sure you understand the difference between a publicly held company and a privately held company, and the necessity of the former to meet quarterly projections, consistently show a profit, etc., compared to the relative opaqueness of financial information of private companies.
   143. greenback needs a ride, not ammo Posted: November 15, 2006 at 03:57 AM (#2238196)
What I'm trying to say is that the economics here are much more complicated than they are being treated, and are tied into the Red Sox's financial state as a whole, for which we don't have a whole lot of clear information.

What I'm trying to say is that the financial state is likely not relevant. The <u>operational</u> state is another matter. They're spending $51.1 million here, or at least will be if they sign the guy. They've got to recover that somewhere, be it in the form of returnable bottles from angry Koreans or Shredder's 250,000 jerseys.
   144. Margo Adams FC Posted: November 15, 2006 at 04:06 AM (#2238206)
Step one: Bid twice the GDP of Kazikstan on a Far East pitcher.
Step two: ???
Step three: Profit!


Henry's profit on this deal is going to be in the form of watching Matsuzaka pitch for the Sox, period. This talk of Far East profit streams seems pretty far-fetched to me, and I believe Henry views the Red Sox/NESN as a long-term capital appreciation deal rather than as a year-to-year money earner anyway. In fact, profit sharing really encourages you to build long-term capital appreciation (not shared with the McClatchys of this Earth) rather than seek an annual profit (is too shared.)

I'm also convinced that there's fire to all the smoke signals about the Japanese team and player splitting the posting pot on the sly, the way it supposedly happened with Ichiro! After all, that's really the most rational way to maximize everyone's goals. First you figure out how much the stupidest/craziest Yanqui is willing to pay, then divvy up that sum, since the player and the team must both do well for the deal to work and since Seibu likely knew well in advance that Matsuzaka wouldn't want to give up even let's say $30 million in potential free-agency money for the privilege of getting out a year early.

In fact if I were a betting man (and I am, I am) I'd bet that Seibu and Matsuzaka had a hypothetical split in place long before this posting was formally announced. Please don't ask me for proof, I don't have any beyond the empirical argument that this would be the most rational way to do business.

So anyway once the player and his Japanese team split the money, based on the team's perception of the player's worth and the player's of the amount of money he's passing up by jumping early and not going through free agency, the U.S. team can treat the player's share of the posting fee (assuming it knows or can guess what that is) as the equivalent of a very big signing bonus in structuring his U.S. contract. Now, all this guessing and dickering could well take as long as 34 days, which (I'm guessing) is why Seibu waited to start the 30-day countdown until the last possible moment. I think if Henry knew that's how such deals work and if Matsuzaka is in fact getting some of the posting fee as a defacto bonus, than the super-duper $51.1 million bid makes more and more sense all of a sudden. I'm just sayin'.
   145. Sean in Sydney Posted: November 15, 2006 at 04:10 AM (#2238214)
This talk of Far East profit streams seems pretty far-fetched to me

Not if NESN is opening up a market showing redsox games to the Japanese.
   146. CFiJ Posted: November 15, 2006 at 04:17 AM (#2238226)
Not if NESN is opening up a market showing redsox games to the Japanese.

All international broadcast revenue goes through MLB International, and is then shared with all 30 teams.
   147. Margo Adams FC Posted: November 15, 2006 at 04:23 AM (#2238236)
Not if NESN is opening up a market showing redsox games to the Japanese.


Henry will have a hard time persuading other owners that Japan is henceforth his exclusive territory, allowing him to sell broadcast rights there. I believe MLB controls overseas rights.
   148. Joel W Posted: November 15, 2006 at 04:43 AM (#2238263)
3) Boras will most likely want a 2-3 year deal so to put the player up for a second larger contract later on.

That doesn't make that much sense to me. With pitchers, shouldn't he want as long of a contract as he can get up front?
   149. Sean in Sydney Posted: November 15, 2006 at 04:56 AM (#2238274)
Henry will have a hard time persuading other owners that Japan is henceforth his exclusive territory, allowing him to sell broadcast rights there. I believe MLB controls overseas rights.

Ja - stand corrected. Was thinking though that there may be an opening for driving NESN's HD feed into Japan as a premium service of one sort or another.
   150. Sean in Sydney Posted: November 15, 2006 at 05:10 AM (#2238282)
That doesn't make that much sense to me. With pitchers, shouldn't he want as long of a contract as he can get up front?

Please correct any of this if it's wrong.
From what I'd read the main impediments to the deal Boras thinks he deserves is the uncertainty of transition between leagues and his usage patterns to date.
Given the teams that can afford his posting price, a ~4.00 era translates to a not bad W-L record -and- a nomo esque' unfamiliarity coming into the league would support his k rates remaining good. Ie - given no flame out he'd be placed at age 29-30 to pull a further 5/6 year deal.
On the other hand there are studies showing pitchers with his usage patterns start to face injury hurdles around 31-32 years of age. If the Sox contract takes him to 32-33 his chances of another big contract after that are much smaller given his build and usage. It's much in the Sox' favor to get the deal to 31-32 (if they're confident) and put him on a pitch count. I think he threw 10 complete games on an average team last year?
   151. Sean in Sydney Posted: November 15, 2006 at 07:12 AM (#2238365)
Nick Carfado of the Boston Globe spoke with Boras. Says he's meeting with Matsuzaka who is flying into LA today, though he knows he's committed to a Lion's function next Tuesday. Matsuzaka has a young family and this may factor in discussions with the sox. His wife is said to be English conversant but they may need a translator anyhow.
   152. Sean in Sydney Posted: November 15, 2006 at 07:42 AM (#2238370)
Did some more reading, seems the Yanks are estimated at having made ~$20m on marketing Matsui alone. One of the Business people at the Sox front office has been quoted as saying this was a baseball decision and not about making enough of a profit to offset the bid.
   153. Dave Cyprian Posted: November 15, 2006 at 03:05 PM (#2238477)
I seriously am beginning to doubt we are going to sign this guy. FIFTY million posting fee? Its a joke -- They are blocking him from the yankees.

Unless they really think a lot of that can be recouped through showing his games in Japan....
   154. Dave Cyprian Posted: November 15, 2006 at 03:08 PM (#2238481)
Let me go to on to explain.. in the years since John Henry and Theo and the gang showed up, how many times have they thrown money at a player without consideration for whether the sun will rise tomorrow? Not often. They wouldn't sign A-Rod because of like 3 million bucks.

How many times have they played hilarious shenanigans to disadvantage and deceive the Yankees? Several times per year. I would love, LOVE to get a good pitcher like Matsuzaka in our rotation for '07, but I'll believe it when the ink dries.
   155. OlePerfesser Posted: November 15, 2006 at 07:05 PM (#2238797)
...once the player and his Japanese team split the money, based on the team's perception of the player's worth and the player's of the amount of money he's passing up by jumping early and not going through free agency, the U.S. team can treat the player's share of the posting fee (assuming it knows or can guess what that is) as the equivalent of a very big signing bonus in structuring his U.S. contract.

Margo's fan makes a good point. If $51.1M/2 is going to "Dice" as a signing bonus, then the adverse arithmetic I laid out in post #57 on the previous page can be modified. The betting odds still favor "no deal," however, 'cause Boras can no doubt figure out that an extra $51.1M in one year is better than $51.1M/2 now; i.e., there's still a strong incentive to "cut out the middleman" (Seibu) by waiting.

And I'm hugely skeptical that any under-the-table deal like that, or a kickback from Seibu to Boston, is feasible. Even if such things ever happened before, they didn't involve shenanigans by rivals like the Sox vs. Yankees. Cashman and/or Minaya would scream bloody murder if they played it straight and were effectively swindled because Seibu was willing to accept $51.1M/2 rather than their (higher effective) bid.

So I remain convinced the Sox are going to spin their wheels with Boras for 30 days, and worried that the opportunity cost of this escapade will be in the form of other clubs signing more reasonable target FAs while we dither. Hope I'm wrong.
   156. ellsbury my heart at wounded knee Posted: November 15, 2006 at 08:57 PM (#2238891)
Let me go to on to explain.. in the years since John Henry and Theo and the gang showed up, how many times have they thrown money at a player without consideration for whether the sun will rise tomorrow? Not often.


I would argue that they knowingly threw a lot of money at Varitek and Renteria. I mean, not $51M just to talk to them a lot of money, but a lot for an aging catcher and SS. They haven't been afraid to pay Schilling and Papi $13M/yr, Beckett $10M/yr, or trade for Lowell's $9M/yr contract. It's not like they haven't taken on some significant salaries - there just haven't been a ton of Manny-type contracts given out lately. Beltran, I guess, but Damon was the Sox CF then.
   157. Honkie Kong Posted: November 15, 2006 at 09:02 PM (#2238897)

Margo's fan makes a good point. If $51.1M/2 is going to "Dice" as a signing bonus


What are the "tampering" laws for such scenarios..
   158. Margo Adams FC Posted: November 15, 2006 at 10:55 PM (#2238985)
Tampering describes attempts to recruit players under contract with a rival team, so collusion is probably the preferred legal charge, though I merely slept at the Holiday Inn. I do think that if Seibu just happened to pay Matsuzaka a $25M golden handshake, that they could do that in a way that MLB, Steinbrenner, etc. could never pin down, much less prove.
   159. Norcan Posted: November 16, 2006 at 08:31 AM (#2239314)
One thing that's surprised me after looking at Matsuzaka's stats on baseballcube is how few innings he's thrown. After all the talk about his heavy workload, I expected to see numbers in the 230s-240s, but he's only pitched over 200 innings once and it was the 215 he pitched in 2005. This past season he only went 186. Before Nomo came over, he had pitched well over 200 innings 4 times, going 235/242/216/243/114. The concern with Matsuzaka I guess has more to do with his pitch counts than innings totals but hopefully pitching every 6th day mitigated the stress of all those pitches a bit.
   160. Eric M. Van Posted: November 16, 2006 at 08:54 AM (#2239319)
This was a really interesting thread back when it was discussing how Drew would fit.

BP ran DT's on DM's last 4 years, which is a little baffling because he made a Santana / Pedro-like breakthrough two years ago (a year younger than they did). It's pretty easy to estimate that a DT of his last 2 years yields a 3.05 ERA.

I seriously am beginning to doubt we are going to sign this guy. FIFTY million posting fee? Its a joke -- They are blocking him from the yankees.

So, the Sox have a chance to negotiate exclusively with a 26 y/o 3.05 ERA pitcher, and their actual aim in this is to delay his signing with the Yankees for a year or two? Which is, you know, what would happen.
   161. Phil Coorey. Posted: November 16, 2006 at 09:07 AM (#2239322)
I agree with someone in the other thread that this has a 1% chance ofnot happening.

DR Bob...where in Oz are you?
   162. Golfing Great Mitch Cumstein Posted: November 16, 2006 at 03:05 PM (#2239431)
In an article today, Sean McAdam writes that
Contrary to some reports, Matsuzaka will not be eligible for total free agency -- and open to all bidders -- until after the 2008 season.


Does anyone know anything about this?

Also, he implies that Japanese broadcast rights are shared the same as merchandise. Seth Mnookin says that such rights would be shared through revenue sharing and not be split equally.
   163. OlePerfesser Posted: November 16, 2006 at 06:01 PM (#2239583)
If true free agency is 2 years off, Mitch, that reduces Boras's leverage considerably, and raises the likelihood Dice will emigrate to Beantown. But I haven't heard that anywhere else...
   164. villageidiom Posted: November 17, 2006 at 12:43 AM (#2239942)
Not if NESN is opening up a market showing redsox games to the Japanese.

All international broadcast revenue goes through MLB International, and is then shared with all 30 teams.


...which means the Red Sox won't make much from the broadcast rights. But it says nothing about how much NESN would make if they buy the broadcast rights from MLB and then broadcast games (and other Sox content) to Asia. NESN already makes a boatload domestically on fees alone, never mind advertising revenue, despite the fact that they have to buy broadcast rights.

Currently the broadcast rights acquisition is a zero-sum game to the owners. The Red Sox get $X, NESN pays $X, the net transaction is zero to Henry. With the international rights it won't be a zero-sum game - the owners lose $ buying the rights - but that doesn't mean NESN or its equivalent wouldn't make lots o' money on the deal.
   165. Pleasant Nate (Upgraded from 'Nate') Posted: November 17, 2006 at 05:33 PM (#2240467)
Can we get a new thread for this?

Sox to sign JD Drew
   166. ellsbury my heart at wounded knee Posted: November 22, 2006 at 02:53 PM (#2243824)
The Red Sox just had dinner with Matsuzaka and Boras. Not a lot of news, though. When do people think Mats will sign, if he does?
   167. Rally Posted: November 22, 2006 at 03:02 PM (#2243832)
According to Baseball America (front page but registration only) Seibu can kick back some of the 51 million posting fee. Apparently Seattle got a kickback on Ichiro's 13 million posting fee.

Which means this whole process is stupid. The 51 million means nothing, the fee is negotiable. The Red Sox can demand a 40 million kickback and tell Seibu that getting 11 million is better than nothing.

If the Mets were actually willing to pay 40 million, well, tough luck for them.

The whole process just comes down to who can come up with the biggest imaginary number. The most creative winner, the one who bids infinity to an infinite power, then gets exclusive rights to negotiate the real posting fee and the real contract.

What a crock of ****.
   168. Margo Adams FC Posted: November 23, 2006 at 03:22 AM (#2244572)
With the stock and other markets doing so well, I would imagine Henry must be swimming in it right now. I bet he's made several hundred million dollars in personal income over the last 3 or 4 months.


Actually I heard on bubblevision that ole John Henry has hit a dry spell of late. But I'm sure he's not starving. So who's still in on Drew besides Sox, anyway? I see a 5 years $75M offer from the Rangers in his future...
   169. Darren Posted: November 23, 2006 at 03:20 PM (#2244689)
AROM,

That's all speculation about Ichiro's posting fee and whether Seibu will kick some back to Boston. If the Red Sox made such demands, I think it would be a perfect case for the "not dealing in good faith" clause. The more real possibility is that the Red Sox makes what looks like a decent offer but it's not enough for DiceK and Boras. Then Seibu kicks in $10 mil. to DiceK so they get $40 mil instead of nothing.
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