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Sunday, December 10, 2006
Scott Boras and the Lack of Good Faith in Matsuzaka-Red Sox Negotiations?

Last month, Rick blogged on the posting system that enabled the Red Sox to obtain the right to exclusively negotiate with Japanese star pitcher Daisuke Matsuzaka. The Red Sox paid the Seibu Lions $51 million for a one-month window to negotiate with the 26-year-old Matsuzaka, who is under contract with the Lions. The window expires this Thursday. If no deal is reached, the Red Sox get their money back, but lose out on perhaps the best Japanese pitcher in recent memory.

And no deal may be the outcome. Matsuzaka is represented by Scott Boras and talks have gone nowhere. The Red Sox are said to be offering $8 million a year, while Boras believes that Matsuzaka's market value--in a market where free agent Jason Marquis, he of the 6.02 ERA and 14-16 record, can land a 3-year, $20 million deal with the budgetless Cubs--is worth at least $15 million and up to $20 million a year. Boras also contends that the Red Sox's $51 million posting payment to the Seibu Lions is not crucial to contract negotiations with his player, since his player isn't receiving any of that money. Boras also notes that the $51 million is not included in the luxury tax figure, and that the Sox would be able to write off some of the $51 million as a marketing cost. It is also thought that Sox would receive a less measurable, but nonetheless meaningful benefit by making in-roads in the Japanese economy and culture.

Today's Boston Herald features an anonymous Red Sox executive (Larry Lucchino?) blasting Scott Boras, even intimating that Boras is not representing the best interests of his client:
Negotiations between the Red Sox and Japanese pitcher Daisuke Matsuzaka have essentially broken down, a source familiar with the talks said late last night, adding that unless there is an abrupt change of course, Matsuzaka will not be signing with the Red Sox before Thursday’s midnight deadline.

Attempts to reach Matsuzaka’s agent, Scott Boras, were unsuccessful last night. However, the well-placed source blamed Boras for stubbornly being unable to get over the flaws in the Japanese posting system, saying that he has been unwilling to negotiate and that he has acted disinterested in even making a deal.
ESPN's Peter Gammons has more damaging commentary from the Sox, with the implication that the Sox believe Boras is not negotiating in good faith:
While Boras remains adamant in asking for close to a Jason Schmidt average annual value, Red Sox officials feel that the superagent prefers to keep Matsuzaka in Japan for two more years, then get $140 million for seven years after 2008.
So is Boras not making a good-faith effort to get Matsuzaka signed? Keep in mind, as noted by Professor Emily Houh in The Doctrine of Good Faith in Contract Law: A (Nearly) Empty Vessel?, 2005 Utah Law Review 1 (2005), the absence of "good-faith" in contract negotiations often does not have legal significance:
Section 205 of the Restatement of Contracts explicitly takes the position that it, "like the Uniform Commercial Code ... , does not deal with good faith in the formation of a contract." Thus, the common law obligation of good faith fails to reach the most troubling forms of contractual bad faith: those that occur during contract negotiation and formation.
But even if the absence of good faith is not legally meaningful, what about the practical implications of Matsuzaka returning to the Seibu Lions--the same team that gave him a farewell event in front of 36,000 fans and that presumably doesn't want to return the $51 million? Can he really go back? Hasn't that bridge already been crossed, if not burned?

Lastly, if Boras fails to reach a deal with the Sox, what might that do to his professional reputation as an agent in Japan? I suspect Matsuzaka might be his last Japanese client for some time if that were to occur.

Having said that, Boras recently placed J.D. Drew with the Sox and is also the representative of Jason Varitek, so he has enjoyed successful negotiations with Sox management, thus supplying some comfort to Sox fans with the Thursday deadline approaching (although don't remind those same fans of another of Boras' clients, some guy named Johnny Damon).

See also
* Boras Almost Steals Another One (9/1/2006)
* Mark Teixeira Blasts Boston Red Sox: Legality of Pre-Draft Negotiations between MLB Teams and Amateur Players (5/23/2006)


This pitcher never pitcehd in the Major leagues, before, he like, all imports from there should take low year, avg. pay so if they are good, they can leave in three years or sign a big deal, ala Ichiro, or they can stink and the team can get rid of them ala Kaz Matsui. Boras should realize this in negotioations.
Why should stupid owners, or teams that need players for different value, determine the market, when it is clear, that each player is woth different for each team.

Anonymous Anonymous -- 12/10/2006 11:34 AM  

Damn, now I can't find the evidence that I was right when I posted back when this story first broke that there was no way the Sox were going to reach a deal. However, my speculation was that the Sox would be the ones who would not negotiate in good faith, since it would be more valuable for them to basically use the time to build rapport with Matsuzaka, and to imply that if he waited in Japan for a couple of years, he'd be in for a really rich deal at the end of that time. In the meantime, the Yankees wouldn't be able to get their grubby paws on the guy. Boras is just a handy scapegoat for what the Sox were going to do anyway.

I despise Boras as much as the next guy, but even taking everything the paper says at face value, it doesn't seem that Boras is negotiating in bad faith. He knows that the posting fee weighs heavy on the mind of the Sox, and he knows that, because of it, his client may not get paid commensurate with his market value. He's making arguments that reflect that position. In the end, though, his duty is to his client, and if his client is better served by two more years in Japan and then a big fat contract, then he's negotiating in good faith. He's laid his cards on the table. He doesn't not want a deal to get made, which would seem to be a preliminary requirement for bad faith in any circumstance --- he just doesn't want his player negotiating on the basis of money paid that he won't see a dime of: a reasonable position.

Anonymous Collin -- 12/10/2006 11:52 AM  

I still don't see what is preventing Matsuzaka from getting a kick-back from his Japanese team? Just because MLB says you can't doesn't mean that the posting system doesn't allow it.

Also, for the Sox to offer "Jason Marquis" money is ridiculous. Matsuzaka has been referred to as one of the top 5 pitchers in baseball and a "National Treasure." Such high praise for an individual is recognition that he is well worth what Boras is asking for.

Sending Matsuzaka back to Japan might affect Boras' reputation over-seas but only until Matsuzaka cashes in for that 7 year $140 million deal two years from now. Then I suspect that clients will be lined up trying to ride the Boras train.

Anonymous Anonymous -- 12/10/2006 12:12 PM  

The MLB need's to end Boras association with the league and prevent him from representing anymore mlb clients.

Anonymous Anonymous -- 12/12/2006 2:22 PM  

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