Matsuzaka Math

The Boston Red Sox spent more money for the right to try to sign Daisuke Matsuzaka than the Royals, Pirates, Rockies, Devil Rays, and Marlins spent on their entire 25-man rosters in 2006.

Furthermore, Matsuzaka himself has not received one cent of the money; his agent, Scott Boras, will seek to extract every nickel from the Red Sox’s already-depleted pockets.

How can this possibly work out well for the Red Sox? I would argue that winning the rights to Matsuzaka---even at such an exorbitant sum of money---is a smart decision for the Red Sox. Here’s why.

Let’s assume, for argument’s sake, that the Red Sox sign Matsuzaka to a contract. Both the Sox front office and Scott Boras (and, by extension, Matsuzaka himself) have too much to lose by simply walking away. While both sides could potentially have a lot of leverage should they choose to play hard-ball, it is unlikely that Matsuzaka will return to Japan next season. Thus, the sides will come to a reasonable (if you can call salaries in baseball “reasonable”) deal before their deadline.

As such, it’s likely that, when all is said and done, the Red Sox will end up spending around $100 million on Matsuzaka, including the posting fee and his contract, which likely will be for no longer than 5 years. How can this possibly make sense?

First of all, there is the baseball aspect of this deal. From all accounts, Matsuzaka is one of the “best 5-10 pitchers on the planet” according to Keith Law. A conservative estimation is that Matsuzaka would rank amongst the top dozen American League starters (Kenny Rogers and Nate Robertson tied for 11^th best AL ERAs in 2006, with a 3.94 figure). However, it’s much more likely, as evidenced HERE, that Matsuzaka will be better than that. His 2005 Japanese League statistics were translated into their Major League equivalents by more than one person, and each came up with approximately a 3.40 ERA (see THIS and THIS). That would have ranked fourth in the AL, behind CC Sabathia and ahead of Mike Mussina.

Matsuzaka is likely to be a legitimate #1 starter---a workhorse who will post one of the best ERAs in the league. He will complement the Red Sox’s staff perfectly. With Matsuzaka anchoring the rotation, every other starter will move back one slot. Curt Schilling is a solid #2 starter; Jonathan Papelbon, if healthy, is likely to be an excellent #3; Josh Beckett will probably at least be a solid #4; Tim Wakefield is a serviceable #5. The Red Sox’s rotation, previously a question mark, will have morphed into a legitimate strength, with the potential of being the best staff in the AL.

Furthermore, Matsuzaka is only 26 years old. While his arm has already logged many innings in Japan (apparently, rumors of his 250-pitch complete game as an 18-year-old are true), he has also never broken down. Additionally, scouts are confident that his body-type and work-ethic will allow him to maintain his health, at least for the foreseeable future.

While is seems likely that Matsuzaka will be an excellent starter for at least the next couple of seasons, it still seems unreasonable for the Red Sox (or any team) to spend $100 million on him, especially considering his contract is unlikely to be longer than 5 years. Think about this: if Johan Santana were a free agent, what kind of contract would he expect to receive? Johan has a career 3.20 ERA in over 1,080 innings. He’s struck out more than one batter per inning in his career. He’s won two Cy Young Awards, and should have won a third. He has no injury concerns, and is only 27 years old. Would anyone give Johan a 5-year contract for $100 million? Maybe, maybe not. And Johan is indisputably the best pitcher on the planet (and is a good bet to remain so in the near future).

Thus, if the best pitcher in the world might not receive the same contract that Daisuke Matsuzaka will likely receive, how can the Matsuzaka contract make sense?

Firstly, let’s get one thing straight: the Red Sox are rich. They can cry about the “Evil Empire” as much as they want, and they certainly cannot spend like Steinbrenner’s Yankees, but they are rich. Beyond being rich, however, they are vastly flawed. Their 2006 season was a disappointment, no question, but the Red Sox were not even as good as their 86 wins suggest. Their third-order adjusted standings http://www.baseballprospectus.com/statistics/standings.php suggest that the 2006 Red Sox were “truly” only an 82-win team. Certainly there was bad luck involved---mostly of the injury-related sort---but nonetheless, the Red Sox are very flawed going in 2007 (especially considering the relative strength of the AL in general). However, they lack in any significant bargaining chips (Manny Ramirez is another story) with which to improve themselves via trade. Thus, they must turn to the free agent market. In addition to prices being wildly out of control, there are very few, if any, worthwhile players on the market at just about any price. Forget his $17 million salary---would even a reasonably priced Alfonso Soriano fix the Sox’s problems?

In other words, the only way for the Sox to improve their team going forward is in the free agent market; however, money aside, there are few (if any) logical pieces for them to add. Furthermore, if they’re going to add anyone, they’re going to have to overpay, because of the state of the market. Thus, it becomes apparent that it makes a lot of sense for the Red Sox to guarantee themselves the rights to Matsuzaka. The reason is twofold: A) The Red Sox have to do something, and their only real options are free agents, and B) They’re going to overpay for whomever they get. Thus, for a rich team like the Red Sox, it makes sense that if you’re going to overpay, you might as well get the absolute best available. The marginal increase in dollars spent from an Alfonso Soriano to a Daisuke Matsuzaka is more than made up for by how much each would help the team. Not spending money isn’t an option for the Sox; thus, might as well get the one player on the market who would significantly improve the team.

But wait, there’s more. Matsuzaka is the first Japanese star the Red Sox will have. As such, he will open a revenue stream that was previously unavailable to the Sox. Having a Japanese star will virtually guarantee that every one of Matsuzaka’s starts will be broadcast in Japan, letting the Red Sox generate new revenue from the selling of Japanese advertising. Furthermore, they will expand their market for Red Sox merchandise, as well as increase demand for Red Sox tickets (not that demand was lacking beforehand). All of these are measurable increases in money, of which I’m sure the Red Sox are well aware of the specific projections.

However, what cannot be calculated in dollars is the Red Sox staking their claim in Japan. The Sox, a very progressive and smart organization, will likely use this signing as a way of expanding their entire organization into Asia. They will create many more Red Sox fans and will greatly improve their prospects of landing future Japanese imports. Furthermore, they (correctly) recognize that the game is shifting more and more to the Asian market in general. They want to be at the forefront of this, and the Matsuzaka signing not only symbolically represents this---it also gives the Sox a decided leg-up on the competition in the future.

Oh, and also: they didn’t want the Yankees to sign him.