{"id":151277,"date":"2014-01-14T12:19:53","date_gmt":"2014-01-14T17:19:53","guid":{"rendered":"\/gazette\/?p=151277"},"modified":"2019-03-25T12:24:39","modified_gmt":"2019-03-25T16:24:39","slug":"hot-stove-simmering","status":"publish","type":"post","link":"https:\/\/news.harvard.edu\/gazette\/story\/2014\/01\/hot-stove-simmering\/","title":{"rendered":"\u2018Hot Stove\u2019 simmering"},"content":{"rendered":"\n\t
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The right-hander Masahiro Tanaka could fetch a multiyear contract worth $100 million or more. A Harvard Business School analysis looks at what matters for MLB teams trying to cash in on their Japanese star players.<\/p>

Photo by Yomiuri Shimbun via AP Images<\/p><\/figcaption><\/figure>\n\n\t

\n\t\t\t\n\t\t\tNation & World\t\t<\/a>\n\t\t\n\t\t

\n\t\t\u2018Hot Stove\u2019 simmering\t<\/h1>\n\n\t\n\t\t\t<\/div>\n\t\t\n\t
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\n\t\tChristina Pazzanese\t<\/p>\n\t\t\t

\n\t\t\tHarvard Staff Writer\t\t<\/p>\n\t\t\t\t\t<\/address>\n\t\t<\/div>\n\n\t\t

\n\t\t\tStudy suggests what a baseball team soon may win by signing top Japanese pitcher, and what it probably won\u2019t\t\t<\/h2>\n\t\t\n<\/header>\n\n\n\n
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The only mounds seeing much action these days are made of snow, but nonetheless one Japanese star pitcher has been burning up Major League Baseball\u2019s<\/a> \u201cHot Stove\u201d season.<\/p>\n

Masahiro Tanaka, 25, a highly coveted right-hander from the Japan Pacific League<\/a> coming off a dominant<\/a> 24-0 season, is the talk of the offseason. Perhaps as many as 10 teams, including the Los Angeles Dodgers, the Chicago Cubs, the Chicago White Sox, and the New York Yankees, are expected to vie for his talents before he agrees to a contract with one of them by the Jan. 24 deadline.<\/p>\n

It\u2019s widely believed that Tanaka could fetch a multiyear contract worth $100 million or more \u2014 including the $20 million posting fee owed to Tanaka\u2019s prior employer, the Tohoku Rakuten Golden Eagles \u2014 a huge price tag for someone who has yet to play a single game in the majors.<\/p>\n

\u201cTanaka is on his way to a very big payday,\u201d said Stephen A. Greyser<\/a>, the Richard P. Chapman Professor Emeritus<\/i> at Harvard Business School<\/a>, who studies marketing and the business of sports. \u201cMy opinion is there will be a number of clubs that will be willing to pay up to $20 million [to negotiate], and that will mean that in theory several clubs will have the opportunity to try to sign him as though he were in the free-agent market,\u201d he said in a phone interview.<\/p>\n

Typically, players cannot enter the open market until they have played in the major leagues for six seasons.<\/p>\n

But whether signing Tanaka, or past high-profile Japanese stars such as Hideo Nomo<\/a>, Hideki Matsui<\/a>, or Daisuke Matsuzaka<\/a>, automatically brings a marketing windfall for MLB teams depends on a variety of decisive factors, according to a recent Harvard Business School working paper<\/a>.<\/p>\n

Greyser and Isao Okada, a former Fulbright Visiting Scholar at Harvard\u2019s Reischauer Institute of Japanese Studies<\/a>, studied the financial impact that five top Japanese players had on their respective major league teams, starting with Nomo, the pitcher who \u00a0joined the Dodgers in 1995 and eventually threw two no-hitters, and concluding with outfielder Kosuke Fukudome<\/a>, who entered the league in 2008 and earned\u00a0a batting championship with the Chicago Cubs.<\/p>\n

After the runaway success of outfielder Ichiro Suzuki, who signed with the Seattle Mariners in 2000 and attracted huge numbers of Japanese fans and sponsorships, many teams have been willing to pay a premium for Japanese players, untested in the majors, in the hope that they also would deliver lucrative revenue streams from the Japanese marketplace.<\/p>\n

Rookie players rarely bring the sort of ancillary money that is at least theoretically possible from corporate sponsorships with Japanese companies, ballpark billboards, and other advertising signage attuned to Japanese fans, as well as increased ticket sales from Japanese tour groups and bumped-up team merchandise sales.<\/p>\n

\u201cThey\u2019re willing to pay big money because the player is going to help them be a better team,\u201d said Greyser. \u201cThe question is: Besides bringing in more people at the gate, presumably, and improving the team, are there ways that teams can commercialize from having a big Japanese star?\u201d<\/p>\n

Okada, a veteran business journalist for the Mainichi Newspapers company in Japan, said he was prompted to research the financial impact that Japanese ballplayers have on major league teams while at Harvard in 2007, shortly after the Boston Red Sox<\/a> spent a startling $103 million to sign pitcher Matsuzaka to a six-year deal.<\/p>\n

\u201cIt became big news both in Japan and the U.S.,\u201d Okada said in an email. \u201cNo one doubted Matsuzaka would bring big amounts of Japanese money to the club through signage, ticket sales, and concessions as Ichiro and Matsui did.\u201d<\/p>\n

But after talking to a top marketing executive for the Red Sox, Okada learned that the team wasn\u2019t quite able to capitalize on the new pitcher in the ways that many had anticipated, despite Matsuzaka\u2019s respectable 15-12 debut season and the team\u2019s World Series title in 2007.<\/p>\n

\u201cI was so surprised and interested [to find out] what the differences are between Matsuzaka and the other Japanese stars such as Nomo, Ichiro, and Matsui,\u201d Okada said.<\/p>\n

Seven components affect a team\u2019s ability to commercialize Japanese players to help offset their often-costly contracts, the study said:<\/p>\n