MLB

MLB's Biggest Waste of Money of the Month

Zak SchmollAnalyst IFebruary 2, 2014

MLB's Biggest Waste of Money of the Month

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    Toru Takahashi/Associated Press

    Masahiro Tanaka is supposed to be a star. After all, he went 24-0 last season in Japan, and he seems to have all of the tools necessary for success. Read this analysis by our own Adam Wells if you want a more technical breakdown of this phenom, but let me give you a few highlights.

    He throws a fastball that tops out at 97 mph, a devastating splitter and a serviceable slider. He is only 25 years old and has plenty of time to get even better. I’m sure that that is some of the justification behind his seven-year contract. The New York Yankees get him through his prime, and they will be off the hook before he begins to get very old.

    All of that being said, I am not sure about this contract. The $155 million over seven years plus a $20 million posting fee is an awful lot of money, and for a team that has spent approximately $500 million this winter, I don’t think it was the best use of its money.

    Let me provide you with four key reasons why I think this deal could end up becoming a major waste of money for the New York Yankees.

Reason No. 1: Supply and Demand

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    Jeff Chiu/Associated Press

    I was a business major, so I understand something about supply and demand. It is hard to find a 25-year-old pitcher with this kind of potential on the open market, so when we have scarce supply and high demand, the price is naturally going to be high. It is no surprise then that Tanaka saw his value skyrocket.

    However, I do not find that as a convincing reason to overpay.

    This kind of thing gets people into trouble, and it is the same reason that the Albert Pujols contract was criticized by many. Because he was the prime target on the market, his value skyrocketed. He was the only one who could satisfy teams who were demanding that kind of presence in their lineups.

    The bidding wars are rarely beneficial, and it is an obvious reason why he was overpaid. The competitive market overinflated his value. I am not saying that he isn’t very good, but I am saying that he got paid an awful lot for a guy who has not pitched a major league inning.

Reason No. 2: The Experience Factor

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    Kathy Willens/Associated Press

    I mentioned on the last slide that he has never pitched an inning in the major leagues. Of course, that doesn’t necessitate failure. At some point in their lives, each player in the game had to break in with no experience. The difference is that most of them are not being paid $155 million at the time.

    However, to be fair, let’s compare Tanaka in Japan to other pitchers who have made a similar transition. We will see how well that worked out in each scenario.

    Hideo Nomo in Japan, 1994: 8-7, 3.63 ERA, 114 IP, 126 SO, 86 BB

    Hideo Nomo in America, 1995: 13-6, 2.54 ERA, 191.1 IP, 236 SO, 78 BB

    Daisuke Matsuzaka in Japan, 2006: 17-5, 2.13 ERA, 186.1 IP, 200 SO, 34 BB

    Daisuke Matsuzaka in America, 2007: 15-12, 4.40 ERA, 204.2 IP, 201 SO, 80 BB

    Hideki Irabu in Japan, 1996: 12-6, 2.40 ERA, 157.1 IP, 167 SO, 59 BB

    Hideki Irabu in America, 1997: 5-4, 7.09 ERA, 53.1 IP, 56 SO, 20 BB

    Masahiro Tanaka in Japan, 2013: 24-0, 1.27 ERA, 212 IP, 183 SO, 32 BB

    Masahiro Tanaka in America, 2014: We shall see

    I presented all of the statistics because it is not uncommon for a player to regress slightly when he comes to Major League Baseball.

    Granted, Tanaka has a much more impressive resume than any of these other men, but given the financial risk that the Yankees have taken on him, there is very little room for him to be anything less than one of the best pitchers in baseball and still justify that paycheck.

    Regression is highly probable but not acceptable.

Reason No. 3: He Has a Lot to Live Up To

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    Toru Takahashi/Associated Press

    Think about his contract for a minute. Basically, if you count his posting fee as part of the costs of bringing him in, we have a pitcher who is worth $175 million over the next seven years. Do you know how many pitchers earn that kind of money?

    Take a look at this article from Cork Gaines of Business Insider. I know the article was written last April, but the information is still valid. His salary is right up there with some of the best in the game. You will find Felix Hernandez, Cole Hamels, Justin Verlander and many other great pitchers on this list.

    When players start to earn these kinds of salaries, the expectations rise exponentially. Notice that Barry Zito is on this list for his mega-contract from almost a decade ago. Remember how critical people were when he was not performing? Obviously, people cared about him not performing, but they were more worried about him earning so much money for such little production.

    Tanaka is going to be paid like a superstar, and you are asking a lot of a first-year player if you want him to perform at that level. That is an impossible expectation to live up to.

Reason No. 4: Be Realistic

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    Toru Takahashi/Associated Press

    I have not read very much about the personality of Tanaka, but I hope that he is incredibly determined. Like I said on the last slide, if the contract he was awarded with is any indication of what the New York Yankees expect of him, if he is not amazing right off the bat, there will be quite a bit of pressure.

    He might have the right personality to handle it, but I do wonder if he will get off to a slower start. If he gets off to a slow start in the most high-pressure media market in the country, I have the feeling that the pressure will only multiply from there. Once you are in a hole, it is harder and harder to dig your way out of it.

    By putting this kind of pressure on Tanaka, a slow start could spell disaster at least for this season.

Conclusion

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    Koji Sasahara/Associated Press

    Now, think back over my four reasons for why Tanaka was a waste of money.

    First, a bidding war always causes market values to inflate, and that is an easy way to waste money. Second, players do tend to regress slightly when they move from Japan to the United States probably due to the increased competition. Third, his compensation is comparable to the biggest stars in baseball, so there will naturally be high expectations that can add unnecessary pressure and lower performance. Finally, if he does not begin well, the pressure will get even heavier, and it will make a difficult situation even tougher.

    I would like to end this article by saying that I don’t wish any bad fortune on Tanaka. I hope that he overcomes all four of these potential issues and has an incredibly productive career. However, if he does not become one of the best players in baseball, this deal has ultimately been a waste of money.

    He is being paid too well to be average.

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