Putting a Price on Matsuzaka

If you don’t yet know the name Daisuke Matsuzaka, you will soon. The Seibu Lions, his team in Japan’s Nippon Professional Baseball (NPB), are likely to make him available to major league clubs through the posting system, which allows teams to bid on the right to an exclusive negotiating window with the pitcher.

It may be better to phrase that differently: as we learned last week, the winning bidder will have the right to negotiate with Scott Boras. Count me in! Luckily, I won’t have to deal with Boras regardless of who wins the bidding. But I’m still interested in what Matsuzaka is worth, so let’s look into it.

Depending on what you think about Barry Zito, Matsuzaka may be the best pitcher available this offseason. Between the posting fee and the long-term deal that will follow, he may sign the richest contract of any player before the 2007 season. He’s been a key contributor to Seibu since 1999 (when he was 18!), throwing nearly 1,200 innings in the last seven years, striking out 1,141 batters and earning an ERA well under 3.00.

If those numbers belonged to a MLB lpitcher, well, he’d be Johan Santana, only a year younger. (Be careful: you’re drooling on the keyboard.) Of course, the NPB isn’t the same as the American major leagues, so it’s unlikely he’ll match his 2006 ERA of 2.13 over 180 innings in the US.

How Good Is This Guy?

His performance in MLB may be better than you’d think. Using Jim Albright’s system for projecting Japanese pitchers in the U.S., Mike Plugh came up with some translations for Matsuzaka. I haven’t delved deeply enough into the numbers to judge Albright’s method, but it seems to have been instructive in the past. If anything, the results might overstate the difference between Japanese and American baseball, as presumably the NPB has gotten stronger within the last decade.

Plugh translates Matsuzaka’s 2005 stats and a chunk of his ’06 numbers as follows:

Year    ERA     IP      H       HR      BB      SO
2005    2.74    215     185     16      63      200
2006    2.52    187     156     21      39      181

Let’s say, for whatever reason, that you’re skeptical of those numbers. So am I. It seems well established that the NPB hosts a higher level of baseball than American Triple-A, but for the sake of argument, let’s translate his 2005 NPB stats as if they were accumulated in the International League. (I can’t find all the components I need to do this with 2006 stats, so 2005 will have to suffice for now.)

2005    IP      HR      BB      K       FIP
NPB     215     13      49      226     2.56
MLB     215     18      65      189     3.44

So, as long as there’s nothing about Matsuzaka that makes him incompatible with success in America, and assuming that the Seibu faces harder competition than Pawtucket does, the upper bound on his ERA these days would seem to be about 3.50.

So, What’s He Worth?

Before even talking to Scott Boras, a team will have to offer the Seibu Lions a serious wad of cash. Various estimates have put the winning bid between $20 and $30 million. If we assume that Matsuzaka and the winning bidder ultimately agree on a five-year deal, the posting fee will add $4-6 million to the yearly salary.

If you think Matsuzaka is precisely Zito’s equal and that Zito will get a $75 million, five-year contract, Matsuzaka would cost the same with a $25 million posting fee and a $50 million, five-year contract. (Yes, I know, inflation tilts the scales somewhat.)

Boras has claimed that his client will be among the top 10 to 15 pitchers in baseball as soon as next year. The various translations outlined above would seem to support that. To get an idea of how that translates into value, let’s look at a few top pitchers, their performances as measured by VORP, and their worth (approximated as $3 million per win):

Rank    Name    VORP    Value ($MM)
1       Santana 79.6    23.88
5       Carpente67.8    20.34
10      Liriano 51.0    15.3
15      Lowe    49.3    14.79
20      Sabathia46.5    13.95
25      Haren   41.4    12.42

The estimate based on Zito’s contract seems about right. If Matsuzaka is among the top 15 pitchers in the major leagues next year, he’ll be worth about $15 million. On the other hand, the list also illustrates why he will likely make more than that: most of those arms aren’t available for purchase. Zito and Jason Schmidt were 13th and 14th among MLB pitchers last year, and Matsuzaka is younger.

More than anything else, Matsuzaka’s price will be determined by his willingness (or what Boras interprets as his willingness) to go back to Seibu in 2007. If a deal isn’t worked out with the winning bidder, the bidder keeps his money, Seibu gets the ace for one more year, and Matsuzaka becomes a free agent after the season.

No major league team has ever paid free-agent market value for a player acquired via the posting system. For example, after the 2000 season, the Mariners spent $13 million to negotiate with Ichiro Suzuki and then inked him to a three-year, $14 million deal. Boras may try to extract a Roy Oswalt-like deal ($73 million, five years) for his client, but unless his negotiating partner is convinced that Matsuzaka’s performance is Santana-like and can hold up for a half-decade, it would be foolish to spend that money.

Consider the alternative. If Matsuzaka went back to Seibu in 2007, put up another incredible year with a sub-2.50 ERA, and became a free agent, would a team willingly pay $19-21 million per year for five years? Even $21 million over four years? If he came to the States and established Santana-like dominance for a couple of years, then he might earn that contract. But right now, there are enough question marks to keep him from being the highest-paid pitcher this offseason by several million dollars. He’ll probably have to settle for edging out Zito by a smaller margin.

References & Resources
For everything Matsuzaka, check out Matsuzaka Watch. The Baseball Cube has his stats through 2005, while JapaneseBallplayers has less complete info through the current year. Thanks to Kent Bonham for the idea for this piece and Sean Smith for showing me how to do pitcher translations.

A Hardball Times Update
Goodbye for now.

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