The economics of Hideki Matsui

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How do you put a value on Hideki Matsui? That question has dominated much of the off-season talk about baseball economics.

Early on, a report out of Japan alleged that the Yanks stood to lose $15 million in revenue if Matsui left the Bronx. Many though questioned those numbers. The revenue from Japan doesn’t flow directly to the Yanks. Instead, it lands in the central MLB pot and is redistributed to the 30 teams.

For the Yankees, Matsui’s impact to the bottom line came about through sponsorships and ticket sales. Since 2002, the Yomiuri Shimbun, a Japanese newspaper, paid for one of the outfield billboards, and Benihana, the Japanese hibachi restaurant, sponsored his at-bats. Furthermore, Yankee games became a major destination for Japanese baseball fans. Those are the revenue sources the Yanks may miss.

But will they actually notice a decline in revenues with Matsui on the Angels? Yesterday, we learned that the Shimbun would not have renewed their sponsorship in 2010 regardless of Hideki’s team. But the Yanks have already sold the empty billboard space. As commenter Ed explained, “Sell a sign in the stadium for $1m/year to a Japanese company because Matsui’s here. He leaves, you sell it to the American company that had the next highest bid, and you get $0.9m instead. Depending on what you want the numbers to say, you can claim Matsui lead to $1m in income or to $100k.”

Today in the Japan Times, sports economist Andrew Zimbalist further details the economics of Hideki:

“I believe the main impact will be what he contributes on the playing field,” Andrew Zimbalist, the Robert A. Woods Professor of Economics at Smith College in Northampton, Mass., told The Japan Times in an exclusive interview on Saturday. “The coterie of reporters that follow Matsui add nothing to the team’s revenues.”

Zimbalist, a member of the editorial board of the Journal of Sports Economics and author of several books on baseball economics, thinks Matsui’s signing won’t make a huge impact for the Angels in terms of revenue. “There also may be some additional Japanese fans in greater L.A. and tourists who come to the games, but, I suspect, that these numbers will be very modest. There also may be some Japanese signage at the ballpark.

“In the end, the fact that Matsui is a beloved star in Japan may add a few million dollars to the Angels’ revenues, but, again, the main impact will be on the field.”

It’s safe to conclude now that the $15 million figure we heard a few weeks ago was wildly overinflated.

In the end, the Yanks may find themselves short a few dollars with Hideki out of the picture. The team, coming off of a World Series championship, will not find itself short of fans, and the sales staff has already exceeded 2009’s sponsorship figures. As Hideki’s value to the Angels will be on the field, if the Yankees find themselves yearning for Matsui, it will be his bat and not his marketability that they will miss.

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  • steve (different one)

    Thank God. In one move, we can kill both the “Matsui pays for himself” and the “Seattle will sign Matsui b/c he’s Japanese” memes in one shot.

    I’ll miss Matsui, but I welcome our new OBP Overlord.

  • Bronx Blogger

    I need to get tickets to an Angels-Yanks game this year in the Bronx so I can cheer for Hideki nonetheless.

  • Jeremy

    A lot of reporters seem to forget about the revenue sharing concept.

  • John

    I think the Yankees has put more thought on this issue than people tend to think. They are all about business. For example, during Granderson’s presser, something that struck me is when Cashman said that “hopefully Granderson adds value … and Girardi push all the right buttons … so that our fanbase remains as happy as it is” or something like that. Instead of saying that hopefully Granderson helps the Yankees win more games, he talks about the fanbase. Because fanbase brings $$$. Cashman is all about the money, and he surely analyzed Matsui’s financial impact on Yankees’ revenues, and concluded he was not worth it.

    • Januz

      Cashman has to be concerned about p/l (Profit/loss) statements, that is part of his job. That said, he understands that winning comes first (Which is why he went to Hal Steinbrenner and got the extra $$$$$$$ necessary to sign Mark Teixeira, which may have been the difference between the Yankees and Red Sox).

    • Hey ZZ

      Granderson definitely has the potential to be a fan favorite

  • dan

    to answer eds question he led to $1m in revenue and $100k in incremental revenue.

    • Ed

      I wasn’t asking a question. Your point = my point. You used financial terminology, I didn’t.

  • Kiersten

    The picture just killed me.

    • Michael Kay

      its weird isn’t it? Its like my mind expected him to still be wearing his Yankee uniform as an Angel or something.

      • radnom

        I read all your comments in Michael Kay’s voice.

        • scooter

          Time to put a bow on it…

      • Hey ZZ

        Well Michael, your mind committed the classic fallacy of the predetermined outcome.

    • jim p

      My mind can just make out this weird jumble with red in it. Like an abstract painting. What’s it of?

  • Januz

    There is little doubt that if the Yankees were going to take a $15m hit, he would have been resigned. That said, when Zimbalist claims that “The coterie of reporters that follow Matsui add nothing to the team’s revenues.” is not exactly accurate. When the Yankees get wall to wall coverage in Japan, it leads to stuff like increased merchandise sales in Japan. The Yankees make up 25% of MLB’s merchandising.…/top-3-mlb-teams-boasting-highest.html

    • radnom

      Yeah. This article probably sells it too short, while the previous one over blew it. It is a hard thing to quantify I wouldn’t take either article as gosple.

      In the Yankees mind, who probably have better estimates on Matsui’s monetary value than any 3rd party, signing Matsui wasn’t worth it. That is all I need to know.

    • Hey ZZ

      They are still going to get that money through revenue sharing like the article says. Just now Matsui Angels jersey’s are going to land in the pot.

    • steve (different one)

      When the Yankees get wall to wall coverage in Japan, it leads to stuff like increased merchandise sales in Japan

      and the Red Sox get the same share as the Yankees of this revenue.

      sucks, but that’s how it works.

    • Drew

      Eh. Japan loves baseball. MLB is the best brand of baseball out there.

      Japan will still watch MLB and their favorite team. I’m sure their are plenty of Yankee fans over there.

  • Crazy Eyes Killa

    Nick Johnson opens up revenue streams too ya know

    • Alex S


  • thurdonpaul

    maybe its just me, but i think Hideki looks a couple of years older in that uniform

    • Hey ZZ

      He needs to get out in the California sun. He looks like those old retired people in Arizona who just go from their house to garage without ever being exposed to the sun.

      • Drew

        He needs to visit one of those Anti-Aging Clinics in SoCal.


    • Tom Zig

      Yankee Pinstripes have a reverse aging effect, if you change teams you become 3 years older

    • Riddering

      Red does nothing for his complexion.

  • aj

    This was a great post, very interesting. Great job guys.

  • aj

    He looks so miserable though.

  • aj
  • Francis Isberto

    The Yankees may miss Matsui’s revenue but they are much better off without him. Matsui’s knees is a risk and may not hold up for next season. And I don’t think Matsui will sign a $ 6.5 million contract with the Yankees.

    The Yankees 1st priority is to get young and athletic. They may not win the World Series in 2010 but expect them to be competitive. The Yankees have a lot of income streams and losing the Japanese market is not much a concern for the Yankees organization.

  • DSFC

    Anyone would terrible in an Angels uniform – they’re just ugly uniforms.

    • DSFC

      would look terrible, that is

  • Matthew

    Matsui doesn’t “pay for himself” but he is worth every penny in the sense that he builds brand image overseas in Japan.

  • jorge

    Matsui is a great solid player, reliable and great work ethic. No wonder he’s a big star. If he had better English, he could be getting more commercial endorsements. At least he’s getting appearing in some TV commercials in Japan

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