From Far East to AL East
November 17, 2006
Baseball today is becoming more and more of a globalized sport and business enterprise, bringing new significance to the term “World Series”.
There are players from countries other than the United States on every team now, with the bulk of them coming from Latin America and the Caribbean. However, as the game has grown in popularity elsewhere, more and more countries have begun to develop high-quality players that have had an impact on the game.
The World Baseball Classic, held for the first time this spring, included 16 international teams, with at least one from every continent in participation. Though some, like the Netherlands and South Africa, still lag far behind the United States in quality and quantity of players, others clearly have shown that they are major players in the international baseball market.
The United States was not even able to make it to the semifinals of the Classic, leaving Cuba and Japan to battle it out for the top spot, with Japan coming out on top. Does this mean that Japan now has the best players? No. But it does show that they, and other countries, have started to catch up with the country that developed the game in the first place.
One of the happiest people about this continued shift in baseball power is Major League Baseball Commissioner Bud Selig.
During his time in charge of the league, baseball has experienced a major period of growth that has a lot to do with the increased participation of countries other than the U.S. Teams have been growing in value at high rates, with the average team value going up by 15% last year to $376 million.
This, in large part, has been driven by the growth of the teams at the higher end of baseball’s economic spectrum. The Yankees, Red Sox, Mets, Mariners, and others have shown dramatic growth in the past few years, and with revenue sharing this has brought the other teams up along with them. Much of this growth has been realized in the way in which the teams interact with their media representatives. By forging new deals with cable companies or making a move to control the team’s media outlets entirely, the big market teams have found a new way to generate revenue.
These popular teams have little to gain in terms of increased ticket sales, as they are already selling out most games. But by managing their broadcast rights on regional cable networks, which teams like the Yankees and Red Sox own, and marketing their teams more efficiently, they are able to reap huge profits from high local viewership of their games.
This creates a great incentive to expand to markets abroad. Today the biggest area for growth is in the Far East, particularly Japan. Though there have been players coming to the MLB from Japan for years now, these players are beginning to have huge impacts on their teams when they arrive.
Players like Ichiro and Hideki Matsui have been vital members of their teams on the field, and their status as stars in Japan has created a new market for baseball broadcasts and merchandise. Teams have clearly started to see the value in Japanese players, illustrated by the recent bidding process for star pitcher Daisuke Matsuzaka.
After dominating the Japanese league since his debut in 1999, Matsuzaka solidified his reputation among U.S. teams with his performance in the World Baseball Classic, earning MVP honors and putting up a 3-0 record. Matsuzaka is still under control of his team in Japan, the Seibu Lions, but they have posted him to a bidding process in which teams make secret bids to be paid to the Lions in order to have the exclusive right to negotiate a contract with the pitcher.
The estimated winning bid ranged from $20 to $40 million, though it was recently reported that the Red Sox had posted the highest bid, with an amazing $42 million. If true, this shows just how important teams see having such a player on their team is.
Though many regard Matsuzaka as the best talent available this off-season, such a large sum of money to merely have the right to negotiate with a player is unprecedented, with the previous highest amount paid for such a bid being $13.5 paid by the Mariners for Ichiro in 2000.
The Red Sox seem to be desperate not only for a young starting pitcher, but also for their first legitimate Japanese star. The Yankees have already started to tap the Japanese market effectively, with slugger Hideki Matsui drawing Japanese reporters by the droves, and a formal relationship already established with his former team, the Yomiuri Giants of Tokyo.
By acquiring Matsuzaka, who is only 26, the Red Sox would have a projected rotation of Curt Schilling, Josh Becket, Matsuzaka, Jon Papelbon, and Tim Wakefield; imposing, to say the least.
The Red Sox also would presumably hope to draw the crowds of Japanese reporters and fans that Matsui and Ichiro attract, opening the door for expanded revenue from the NESN sports network they own. Though the price of $42 million is steep, it might be worth it for the Red Sox with so many new opportunities to make some of that money back, not to mention acquiring a great pitching talent in a year when starters are demanding high salaries.
This new battleground for the Red Sox-Yankees rivalry should make for interesting interactions in the years to come. The Yankees seem to be a giant already in the Far East, with Hideki “Godzilla” Matsui patrolling left field and Chien-Ming Wang of Taiwan, another hotspot for baseball in the area, proving to be great starting pitcher. The Red Sox have had a few pitchers from the Asian market in the past, most notably Hideo Nomo, and most recently Hee Seop Choi. However, Nomo’s stay was brief, and Choi’s star power was nowhere near the level of Matsui or Ichiro, so the Red Sox are hoping to finally catch their first true Asian superstar.
If they have, look for the battle between the Sox and Yanks in the Far East to become almost as interesting as their battle in the AL East.