EagleTribune.com, North Andover, MA

January 17, 2007

Matsuzaka won't be cash cow Red Sox need

By Rob Bradford , Staff writer

When it comes to the world of Daisuke Matsuzaka, all is not as it would appear, as Sam Kennedy and the Red Sox have come to discover all too well over the past few months.

For the club's senior vice president of sales and marketing, the change in perception began with his Red Sox goodwill tour in Tokyo with Mike Dee, Boston's chief operating officer, in November shortly after winning the negotiating rights for the highly touted pitching import.

"Mike Dee and I came back from a meeting to the hotel and there was a huge crowd of paparazzi," said Kennedy. "Mike and I knew they weren't there for us, but in the back of your mind you wonder if they are because we were with the Red Sox.

"So we get out of the car and nobody comes near us. Two minutes later, a big limo pulls up and Billy Joel gets out. It was too funny. I had my 10 seconds of fame getting to say hello to Billy Joel in Tokyo."

The Red Sox executives' blind-side brush with fame was quickly forgotten. However, the realities of trying to market Matsuzaka abroad have been a bit tougher to digest.

"The signing of this player is definitely not a huge financial windfall for us," Kennedy said. "There really aren't a lot of economic benefits."

The analysis flies in the face of public opinion regarding Matsuzaka's worth to the Red Sox. Many pointed to the potential of the international marketing avenues involving the pitcher as justification for Boston presenting a $51,111,111.11 posting fee to the Seibu Lions and subsequently signing Matsuzaka to a six-year, $52 million contract.

But, as Kennedy points out, the Red Sox have been presented with obstacles which make reaping the rewards of their new popularity abroad extremely difficult.

"I'm not intentionally downplaying the economic benefit, but this is what hasn't been clear to the public," he said. "The reality is that all sponsorships, advertising deals and conducting revenue-generated deals for the Red Sox are exclusively limited to Fenway Park. Again, there is not a big financial benefit associated with this guy."

The problem facing Boston is that outside of the advertising and sponsorship deals cut to generate revenue inside the Sox's home park and within the six New England states (except Yankees-controlled Fairfield County in Connecticut), Major League Baseball controls the Red Sox "mark."

For instance, Boston can claim whatever money earned from its deal with Poland Spring, designating the company as the official bottled water of the Red Sox, as long as it is done inside the team's designated viewership area. But any cash derived from Red Sox-trademarked items in Japan, or anywhere outside New England, goes straight to MLB.

Red Sox key chains. Red Sox hats. Red Sox shirts. Because of Matsuzaka, you might start seeing them all over Japan, but it is a potential windfall which Tampa Bay will be benefitting from just as much as Boston.

Even in Fenway Park, there is proving to be limited opportunities for taking advantage of Matsuzaka's popularity. Most of the prime locations for viewing advertisements during television broadcasts (such as behind home plate) have already been taken. And add in the fact that the ballclub is trying to market a pitcher - not everyday players such as Japan's Ichiro Suzuki and Hideki Matsui - and reaching the perceived $3 million to $5 million of income per season from Japan claimed by the Mariners and Yankees will be difficult for Boston.

Another roadblock for the Sox is even if major Japanese companies want to form a partnership with the club, it must be in a product area not already occupied by one of the Red Sox's exclusive advertisers. Asahi Breweries, who Matsuzaka has a deal with, contacted Boston hoping to strike a deal, but were informed that the team was already committed to Anheuser-Busch and couldn't welcome any other beer company.

It is a conundrum which shuts the Red Sox off from cashing in on such potential Japanese markets as banking (Sox go with Bank of America), pharmacies (CVS is Boston's brand), and coffee, which has become a Starbucks-dominated industry in and around Tokyo. Dunkin Donuts has, and will continue to, dominate the billboards of Fenway.

"There is absolutely no doubt that there is not going to be a significant increase in our local revenue, which is all we're allowed to earn," Kennedy said. "Hopefully, you'll see a couple of Japanese companies advertising at Fenway, but at this stage we don't have any sponsorship arrangements in place."

Even the prospects of integrating the Red Sox-owned New England Sports Network programming into Japan won't bring substantially more cash Boston's way. The team can make some money by using new technology in broadcasts to change the virtual signage behind home plate, depending on which market is watching the game broadcast. But even then, only a piece of the money raised by the electronic advertising goes to the Sox, with MLB taking it's entitled chunk.

"There's no money to made by NESN at all since the broadcast rights are controlled exclusively by Major League Baseball," Kennedy explained. "MLB controls all the games showed in Japan."

What can come out of Matsuzaka's presence is the building of the team's brand. Kennedy reported that he saw one Red Sox hat to every 10 Yankees caps. It is a dynamic Boston is determined to promote, which will help in player procurement, overall goodwill regarding the organization throughout the Far East and the impetus to keep Boston's sellout streak of 307 straight games chugging along.

"There will be a bit of an up-tick in sponsorship revenue, maybe," Kennedy said. "We haven't done any deals with Japanese-based companies yet, but we hope we will and we will be very aggressive in pursuing. But it is important to know that this is clearly a baseball deal.

"I have heard all sorts of reports that we will get the money back (from marketing revenue). The only way you can justify this kind of expenditure, like any player, is if he's good. We're all about sustaining the phenomenon of the Red Sox."

You're money's no good here

The following are corporations who hold exclusive contracts with the Boston Red Sox, eliminating the option of similar Japanese companies advertising with the Sox:

Beer: Anheuser-Busch

Banking: Bank of America

Soft drinks: Coca-Cola

Airline: Delta

Credit card: MasterCard

Hospital: Beth Israel Deaconess

Coffee: Dunkin Donuts

Pharmacy: CVS

Office Supplies: W.B. Mason

Sporting goods: Sports Authority

Home improvement: Home Depot

Casino: Mohegan Sun