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)

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