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Yu Darvish may be the Rangers' for fhe taking, but as Joe Sheehan noted in the following article, which originally ran as a "Prospectus Today" column on November 29, 2006, post-posting contract talks are a high-stakes game.

I did a fairly brutal job with this the last time I addressed it, so let's see if I can discuss the Daisuke Matsuzaka situation any more intelligently today.

There wasn't any movement yesterday, just a bunch of posturing. Amidst that, however, there were some highly amusing sequences. First, there was this in the Boston Herald:

"We have sent a formal offer to Matsuzaka and his agent Scott Boras," Lucchino said after meeting with attorneys representing the Seibu Lions. "I believe it is fair and comprehensive, and offers a great deal of security and a substantial level of compensation."

Now, I can't speak for any of you, but that sure reads to me like, "and nowhere near the market value of top-tier starters." Four years and $36 million could be security and substantial compensation, and a time zone shy of the going rate for a pitcher of Matsuzaka's caliber. If you try and offer him Gil Meche/Ted Lilly money, I seriously doubt you'll be able to bring him in, not when his comps look a lot more like guys getting 5/75 and more. Adam Eaton just signed a three-year deal for $24 million, and he's never had an ERA below 4.00 or thrown 200 innings in any season. Matsuzaka is, um, better than that.

Of course, if the Sox sign Matsuzaka, they're on the hook for $51 million over and above whatever they pay him. A 4/36 deal for him is a 4/87 deal for them, and 5/50 is 5/101, and so on. The $51 million isn't subject to the payroll tax, so that's a small benefit, but that money is a huge elephant in the room. The point I argued so poorly two weeks ago is this: if the Red Sox try and make that posting fee Matsuzaka's problem, they're not going to be able to sign him. He has no reason to care about that money; he's not going to see any of it. From their standpoint, they have every reason to make it an issue, because if they invest an average of $19 million a year or more in the right-hander, it's very hard for him to earn that back for them. It's quite the standoff.

Enter Jimmie Lee Solomon.

In the wake of the Herald piece, which openly discussed the idea that the Seibu Lions might kick back some of the posting fee to the Red Sox to offset a higher offer that might get the pitcher signed, Solomon, EVP of Baseball Operations for MLB, had to step forward and nix the idea. "There are no side deals in this situation," he said, per the AP. "The deal is that the Red Sox are to pay the Lions the posting fee. They are to negotiate [Matsuzaka's contract] free from any other negotuiations that might be going on."

Solomon later added, "We've always been at war with Eurasia."

Park Avenue chiming in on this is nice, but it's not terribly relevant to the Seibu Lions, who are completely over a barrel here and have every incentive to help the Red Sox sign Matsuzaka. Above the line, they'll get $51 million if the Sox sign Matsuzaka, absent any rebate. If the Sox don't sign Matsuzaka, the Lions will get their pitcher back, no cash, and have him for one more season. They can post him again next winter, but since he can be a free agent come April of 2008, there's little chance he'll attract the same kind of bidding a year from now.

The only chance the Lions have for a windfall is to get Matsuzaka signed by the Red Sox in the next two weeks. Solomon may be right in backing the integrity of the process, but the Lions have more tangible concerns: if the choice is no longer between $51 million and nothing, but between, oh, $41 million or $36 million and nothing, the Lions are motivated to take what they can get. It's they, and not the Red Sox or Daisuke Matsuzaka, who have the most to lose right now.

How you feel about this situation probably depends on your proximity to the Mass Pike. The Sox have, to a certain extent, queered the process by overbidding for the negotiating rights and essentially turning the Lions into hostages. The Japanese club has been beset by controversies of late, and is in need of the cash that posting Matsuzaka was designed to bring in. On the other hand, the Sox are doing everything they can to bring the total cost of landing Matsuzaka down to a level that gives them a chance to make money on the deal. The reaction is an odd combination of admiration and nausea, like watching your too-smooth best friend in high school charm the pants off of the unattainable girl, the one you'd had a crush on since the fourth grade.

For the teams that the Sox outbid in the blind process, nausea rules the day. It may turn out that the Lions receive less from the Red Sox than what the next-highest bids would have brought in straight up, which renders the process a farce.

The only certainty is that this winter will be the last time we see this process unfold. With so many flaws exposed, NPB and MLB will have to go back to the drawing board to find a system that doesn't leave the Japanese team posting a player in such a bad position. The Seibu Lions are powerless to prevent a squeeze by the Red Sox, and that is not a tenable situation for NPB teams. The relationship between NPB and MLB may be damaged considerably if the Lions end up with even a penny less than $51.1 million.

Thank you for reading

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The present system seems to allow for the possibility of a team making a very high bid for a player with no intention of signing that player. This would allow the winning bidder too block a competing team from signing the player at no expense to the bidding team.
Of course, there is another possibility sometimes used in legal issues when more than two parties are concerned.
Basically, instead of there being a side deal in place between the MLB and NPB team for a monetary kick-back, the MLB team can simply recommend to the NPB team that they directly pay the player a portion of the posting fee to make him feel like he is receiving a more reasonable portion of his earned value.
"Adam Eaton just signed a three-year deal for $24 million, and he's never had an ERA below 4.00 or thrown 200 innings in any season. Matsuzaka is, um, better than that."

Too bad that Dice K ended up with just 1 season of being, um, better than that and even that requires some cutting-and-pasting. (2007's 204 IP and 2008's 2.90 ERA).