The Red Sox May Have Just Made Insanity the Norm

Baseball is an old sport, and it doesn't change all that often. This week's news that the Boston Red Sox have secured the rights to negotiate with Seibu Lions pitcher Daisuke Matsuzaka for the fairly outlandish sum of $51 million represents real change. The money involved is so seemingly disproportionate to any expected — or even likely — that rather than judge it by normal standards, it's probably wiser to judge it by how it alters those standards. The Red Sox are changing the game.

Before news of the Red Sox' bid broke last week, most had expected that the high bid would come in around $25 million — twice what the Seattle Mariners bid in 2000 for rights to Ichiro Suzuki, who was at the time at least as highly touted as Matsukaza is now. Instead, the Sox' quadrupled that bid, and on the surface there seems to be little explanation for this. If the Red Sox are able to sign their man for, say, five years at $13 million a year, between the posting fee and his salary they'll be paying $23 million a year. (The argument that the posting fee and salary shouldn't be counted together makes sense if you're the Red Sox accountant, but isn't realistic. If you're paying $51 million so a pitcher will play for your team, you're paying $51 million so a pitcher will play for your team — no matter how you put it on your books.)

Even supposing Matsukaza pitches at the level of Johan Santana, the best pitcher in the game, that level of performance is worth, speaking generously, something like $20 million. Any contract that hinges on the assumption the pitcher performs like Santana for five years is, on its face, problematic. And Matsukaza will almost certainly sign for fewer years (so as to hit free agency while still in his prime) and more money a year, perhaps pushing the Sox' annual outlay above $30 million.

The Sox have virtually no leverage here. The player's agent is Scott Boras, who's advised freshly drafted college graduates to play independent ball rather than sign for less than his estimate of their market value. There will be no mercy in these negotiations. Matsukaza will be paid as one of the very top starters in the game or he'll go back to Japan, play out his contract and hit the market next year.

That's probably not going to happen. Every indication is that Boston intends to make a deal, no matter how seemingly insane. This leaves us with the question no one has yet satisfactorily answered: Are these people insane?

Put me down for assuming that the Red Sox are rational actors. The best and likeliest explanation is that they bid as little as they thought they could get away with while ensuring themselves of negotiating rights, which implies they had good reason to think at least one other team was willing to bid near $50 million — a sum that is more, as you've heard, than the Sox were wiling to guarantee Johnny Damon or Pedro Martinez before those players left for New York. As it turns out, the Sox were wrong in this analysis, as neither the Yankees nor the Mets got near the size of their bid. (There's a reason there's an economic concept dealing with this kind of bid structure called the winner's curse.) But the Sox' willingness to pay this much, and their apparent belief that they weren't alone in valuing Matsukaza's rights this highly, moves the focus of the deal away from the Sox' presumed insanity and toward the question of how much a 26-year-old ace pitcher is really worth, and thus the nature of the baseball economy.

The main reason this deal is important is that it suggests star players are more badly underpaid than anyone would think possible. The Red Sox are paying basically for talent, not ancillary benefits. Matsukaza may bring in merchandising revenue, but that gets split equally among the 30 teams. Keeping him away from the Yankees has a certain amount of value, but only so much. He may make the Red Sox a presence in Japan, but that's simply not a concrete enough benefit to justify doubling the salary normally paid a young, Cy Young-caliber pitcher (although its role in this deal suggests how much money MLB sees itself eventually making in Japan, and the value teams see in establishing a brand name there). Work things through, and it's clear not only that what the Red Sox are prepared to pay for is an ace pitcher, but also that if a pending free agent MLB pitcher of similar age and caliber — Santana, Brandon Webb, or Carlos Zambrano, for instance — were to be posted, his team would collect tens of millions of dollars while he collected his fat contract.

It follows that at least among the wealthiest teams, there are circumstances in which they're willing to lay out Alex Rodriguez money for pitchers, something of which no one was aware until just a few days ago. There is more money in baseball right now than anyone knows how to spend, and the movement of that kind of money in baseball has for three decades now consistently been toward players' pockets. One prediction, and one observation: Barry Zito will sign for at least $18 million a year, and star players who have yet to hit free agency — valuable as they've always been — just got enormously more valuable. If Brian Cashman is sane (and he is), his favorite Yankees right now are Chien-Ming Wang and Phillip Hughes.

tmarchman@nysun.com