Comments on: What Will Daisuke Matsuzaka Get?

By: Cliff Harpe

Cliff Harpe — Thu, 16 Nov 2006 13:29:10 +0000

Can Seibu “back door” the excess posting fee (above bidder #2) back to Dice-K? In other words, they get $51 milllion IF RED SOX SIGN him, otherwise, nothing. If they threw $12 million around the corner that would help.

I wish somebody had an idea what Ichiro and Hideki Matsui have been worth in Asian revenue. My gut is Matsuzaka is worth $4 to $5 million, which, when averaged over 5 years at 10 million a year puts total 5 year package at $85 million or so, which makes it a good deal for the Sox and for Dice-K.

By: Sean C.

Sean C. — Thu, 16 Nov 2006 06:35:51 +0000

As much as I would like to agree that the Sox bid that high just to keep the Yankees from signing Mats, I just don’t think that it’s going to happen. Two reasons: 1) it seems quite obvious that he wants out (whether that is for the money or a change in geography or whatever) and 2) Seibu has made it clear that it no longer wants him because of the financial restrictions with which the team is currently dealing.

Because of that, Mats is in a situation in which he can hardly turn back. He doesn’t want to be in Japan and his team doesn’t want him in Japan. So if the $51 million is a base price for the negotiations, then the Red Sox could very well wait this out and he would be almost forced to accept whatever deal was put in front of him, as long as it isn’t totally ludicrous. Say the Sox offer a net sum similar to the starting bid for 4 years or so. While $12-13 per isn’t quite what an ace is worth, it’s not something that Mats and Seibu (who will undoubtedly be prodding him along the next 30 days) are going pass up when they consider the predicaments they are both in at the present, no matter what Scotty Boras whispers in his ear.

By: jon

jon — Wed, 15 Nov 2006 17:22:31 +0000

I think the Red Sox and Matsuzaka will split the difference and do a four year deal that would leave him a free agent at the end. From what I understand he has wanted to pitch in the US since he won the high school championships in Japan. I think it will be in the $12-$15m price range. Jaret Wright makes about $10m/year, Mike Mussina just signed for about $12/year. Matsuzaka while he is a risk, has much higher upside potential than either of these two players. That is just for on field value. When you add the extra revenue from NESN broadcasts, increased in stadium advertising meant for the Japanese market, and increase merch sales. A nation that I am pretty sure doesn’t have many sales of BoSox jerseys as it is, things could be interesting. Not to mention all the Matsuzaka jerseys they will sell in New England over the next three or four years.

By: tangotiger

tangotiger — Wed, 15 Nov 2006 16:17:28 +0000

He’s either going to get a huge buyout from Seibu (on the order of 20-30 million$), or he’s going to reject the Sox offer, not ask to be posted next year, and simply become a bonafide free agent in two years. I explain my reasoning here: http://www.insidethebook.com/ee/index.php/site/comments/what_price_matsuzaka/

By: Jason

Jason — Wed, 15 Nov 2006 13:23:10 +0000

I bet on numbers 1 and 3 being correct. In fact, I’ll predict that he’ll get a 5 year deal that will pay him at least $10 million a season. I don’t believe the Red Sox outbid the Yankees just to delay Matsuzaka from going to the Yankees for one year. If they fail to reach a deal, the Yankees or Mets will surely pay more than $10 million a year to get him next year as an unrestricted free agent. I think a new era of A-Rod type contracts is about to begin in MLB. This is exactly why Gary Sheffield is so angry that the Yankees picked up his option (prior to trading him). He knows that he could get a lot more on the open market this year.

By: Ben

Ben — Wed, 15 Nov 2006 04:02:00 +0000

Should Daisuke’s MRP be higher because of his effect on “untapped revenue streams” that we’ve all heard so much about? This is an extremely unique case where a highly-payed player’s off-field value could be matched/eclipsed by his off-field value. Matsuzaka could also add value to the Red Sox organization by allowing them better access to future generations of Japanese and Asian players (which is in line with Red Sox “philosophy”; they were much more active in Taiwan than anyone else this past year).

The Sox will want 5 years, Bora$ will want 3. I see 4/45 contract in Matsu’s future.

By: JMR

JMR — Wed, 15 Nov 2006 03:09:17 +0000

I think the Sox will make offers that escalate based on the number of years. If Boras only wants 3 yrs then free agency the salary will be lower than if they can lock him up for 4 or 5.

Two things that we can’t really measure here:
(1) the added revenue stream of having a player like this…especially w/ NESN. The Sox have pretty much maxed out local revenue w/ constant sell outs of Fenway and the highest ticket prices in MLB, but NESN rights in Japan will be very valuable and the new CBA lets teams keep more of this based on the split vs. straight pool.
(2) Scarcity–revenue sharing means more teams are locking up aces (see Sheets, Ben,; Santana, Johan) so guys like this don’t go on the open market. Based on Davenport tranlations he figures to be a 7-9 win player..that is huge in the AL East, especially when you deny him to the Evil Empire.

The core of Dice-K, Beckett, & Papelbon could rival the Maddux, Glavine, Smoltz trio….

By: matcohen

matcohen — Wed, 15 Nov 2006 02:16:28 +0000

So if you think that Mats can get $4 million next year and say a 3/14 deal after that, that is $46 million over 4 years.

So he should be willing to take $32 million over 3 years to come here ($46-the 14 he will get in year 4 as a free agent).

Roughly, if you want to evaluate it like this.

I tihnk that he gets $12 – $15. The Sox have made a statement that he is a top of the line pitcher and they are desperate to have him and Boras will hold out for top dollar.

By: JC

JC — Wed, 15 Nov 2006 02:00:40 +0000

I was under the impression that he’d have to go through the process again next year, but some of you think that’s incorrect. Wouldn’t be the first time I’ve made a mistake. However, according to this text of the agreement, it looks like the procedure starts over again a year after a failed bid. If he’s going to be a free agent, then I don’t see a deal getting done this year, especially a three-year deal based off the $51 million fee. Maybe it gets done with a five-year deal. And I wouldn’t be surprised it the Red Sox are just blocking other teams. And I thought my estimates of pitcher values were high.

By: Telnar

Telnar — Wed, 15 Nov 2006 01:32:04 +0000

The opportunity cost of signing with the Red Sox for the 2007 season isn’t just the, say, $4 Million that Sebu would have paid him combined with whatever he wants to be willing to live in the US. The largest piece of the opportunity cost comes in future years.

If he doesn’t sign, then a few weeks into the 2008 season, he becomes an unrestricted free agent (I think his contract with Seibu runs about 20 days past opening day 2008). At that point, if nothing bad has happened to his arm in the interim, he will get full market value for the remaining years.

Let’s say that he’s worth $20 million/year as a free agent. In 1 and 7/8 years, that’s 37.5 million to go with the 4 1/2 million that Seibu will pay him for a 1 and 1/8 years, for a total of 42 million. There are risk issues (since he won’t be able to make nearly as much if he is seriously injured in 2007), and present value discounting issues, but even allowing for those, I can’t imagine that Matsuzaka would be better off by taking a 3 year contract for $6 million/year.

I think that your approach to the opportunity costs will work only for contracts no longer than his current deal with Seibu.