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Today was a day loaded with news, so let’s dive right in.

1) Ken Davidoff is reporting that Andy Pettitte is leaning towards a return to the Yankees in 2011. This is fantastic news, as it makes the Yankees a bit less reliant on signing Cliff Lee and means that they are likely to be at least as good in the rotation this coming year as they were last season.

2) The Yankees are going to offer arbitration to Kerry Wood and Javy Vazquez, but not Derek Jeter. The Jeter decision likely stems from a fear that he would accept it and make 18-22 million dollars next year, although it may have just been a good faith effort to show Jeter that they are committed to reaching a long-term agreement with him and do not want to unnecessarily injure his bargaining position. Javy has already agreed to decline arbitration, meaning the club will gain a supplemental draft pick once he signs with another club. Finally, the Wood decision was the most surprising, but the logic behind it is fairly sound. The market for relievers has been set at an insanely high level, so there is a chance that Wood rejects the offer to sign a long-term deal. If he accepts, the Yankees have an asset, either in the form of a good set-up man, or as a potential closer inked to a one year deal who would be an attractive trade chip. We have no word on Lance Berkman yet, but I doubt the team offers him arbitration. The market for him has failed to materialize, and I would expect him to accept the offer if it was made.

UPDATE: The Yankees did not offer arbitration to Wood. I think this illustrates the fact that the Yankees do in fact have a budget, and cannot simply give every player what they want or “deserve.” The possibility of being “stuck” with Wood for one year at 10-12 million dollars was too great for the Yankees to chance offering him arbitration.

3) Robinson Cano finished 3rd in the AL MVP voting behind Josh Hamilton and Miguel Cabrera, which is exactly where I had him on my imaginary ballot. He did not receive any first place votes but received the most second place and most third place votes. It was an excellent season and I am glad to see that he was recognized.

4) The Yankees and Derek Jeter continued to negotiate through the press, and Brian Cashman had some fairly strong words today:

“We understand his contributions to the franchise and our offer has taken them into account,” Cashman told ESPNNewYork.com. “We’ve encouraged him to test the market and see if there’s something he would prefer other than this. If he can, fine. That’s the way it works.”

[...]

“I was certainly surprised,” Cashman said in regards to Close’s use of the word baffled. “There’s nothing baffling about our position. We have actually gone directly face to face with Casey and Derek and been very honest and direct. They know exactly where we sit.”

[...]

“We believe that Derek Jeter is the best person to play shortstop for this franchise moving forward,” Cashman said. “Do we want to lose Derek Jeter? No. Do we want to treat Derek Jeter fair? Absolutely. Do we want to be treated fair at the same time? No question about it.”

[...]

Asked if there was any chance the negotiation could fall apart and Jeter could somehow wind up in a different uniform next year, Cashman said, “Not from us. We would like Derek Jeter to be a Yankee and we’re making our best efforts to keep that in play. But it takes two.”

I agree with every last word that Cashman said, and it is gratifying to see that the GM is on the same wavelength as much of the fan base on this issue. However, nothing was gained by making these comments publicly, and it is time for the Yankee brass to stop talking about this. All the talking does is entrench Jeter in his position, as he will look awful if he concedes now and takes the Yankees initial offer. I still thinks this gets done, probably for 3 years and 54-57 million, but both sides need to stop negotiating in the press and start hammering out a deal that is fair for the club while allowing Derek to save face.

(The following is being syndicated from The Captain’s Blog).

Derek Jeter’s contract negotiations have easily been the most widely discussed topic in Yankeeland, despite there really not being much news to report. For some reason, several media types have used the off-season lull to repeatedly denigrate Jeter to the point of portraying him as a charity case (e.g., Joel Sherman’s “I am Derek Jeter, pay me” scoff in today’s New York Post). One hopes this sentiment is merely an example of the human condition’s disposition toward kicking a man when he is down, and not evidence of the Yankees’ brass negotiating through the media. In any event, the contract talks with Jeter have proceeded slowly, which really shouldn’t be a surprise considering that it’s in the best interest of both parties to make a deal (i.e., there isn’t a third-party threat for either side that might push the negotiations along).

Instead of beating the same drum by looking at Jeter’s negotiations in the present day, perhaps it might be more constructive to take a look back at how the two sides have dealt with each other when talking contract in the past? So, without further ado, following is a summary of the financial path that Jeter and the Yankees have taken to reach the current situation.

In 1991, the Yankees engaged in a protracted and expensive contract negotiation with first round draft pick Brien Taylor, so it was somewhat of a surprise when the team came to a quick resolution with Jeter, who was drafted with the sixth overall pick in 1992. Only a few weeks after being selected, the young shortstop from Kalamazoo agreed to an $800,000 signing bonus just one day after his 18th birthday. The award was almost half of what was paid to Taylor.

We reached a number and didn’t feel we needed to go any higher. I hope Derek understands the significant effort this organization made to recognize his fine rookie year. But he and his agents went higher than we wanted to go and we couldn’t get it done.” – General Manager Bob Watson, New York Daily News, March 6, 1997

 In his 1996 rookie campaign, Jeter earned the minimum salary of $130,00, which turned out to be a relative bargain when the young shortstop not only won the rookie of the year award, but also helped lead the team to its first World Series championship in 18 years. Not surprisingly, the Jeter camp was in search of a sizeable raise the next season, but the Yankees initial offer of $450,000 was rejected. After gradually inching up the offer during the negotiation process, the Yankees abruptly decided to renew Jeter at the $150,000 minimum when he and agent Casey Close refused to budge from their demands. Cooler heads prevailed, however, and after a personal meeting between the shortstop and owner George Steinbrenner, an amicable deal was reached. Jeter was given a base salary of $540,000 (just $10,000 below what he was reportedly seeking) with $25,000 in combined performance bonuses ($10,000 of which was obtained).

If you get renewed, only one side agrees. I think it was big that we both agreed on it. I appreciate it.” – Derek Jeter, New York Times, March 11, 1997

In 1997, Derek Jeter had a nearly identical season to his rookie campaign, but the Yankees weren’t feeling as flexible with their young stars that offseason. While GM Brian Cashman, who took over for Bob Watson in the winter, was busy trading for All Star second baseman Chuck Knoblauch and signing international pitching star Orlando “El Duque” Hernandez, there apparently wasn’t enough time to work out a contract with Jeter, who along with Mariano Rivera was renewed at a salary of $750,000.

I think we’re being generous. The last two years, we’ve gone above what was required. I think the world of [Jeter and Rivera]. I value them, and they’re family. We negotiated with the union. They have to live with it.” – George Steinbrenner, New York Times, March 6, 1998

After a historic 125 win season in 1998, the Yankees still couldn’t get on the same page with their core group of homegrown stars.  Once again, the team and Jeter were far apart on the terms of a new deal: the Yankees were offering $3.2 million, while Jeter asked for $5 million. This time, however, Jeter was eligible for arbitration, so the hammer was removed from the organization’s hand. Still, Cashman refused to accept agent Casey Close’s offer for a midpoint settlement and the dispute landed on the desk of a third-party, who sided with Jeter’s $5 million figure. The team also lost its arbitration hearing with Mariano Rivera (the following year, the Yankees settled the score by beating Rivera in a second hearing that turned out to be the Yankees’ last to this day).

I wouldn’t really say it was ugly, but no one wants to sit there and listen to a team tell you how bad you are. You think you’re doing a pretty good job and they tell you how bad you are.” – Derek Jeter, speaking about the arbitration process, New York Daily News, February 16, 1999

Just after Nomar Garciaparra signed a 4-year/$22.25 million deal in the spring of 1998, whispers about a long-term contract for Jeter began to filter into the news. In reality, as each successive contract negotiation proved, no progress toward that end had been made. In fact, despite the persistent rumors, Jeter emphatically told the New York Daily, “You read in the papers that there have been offers or we’re trying to talk, but there’s been no discussions about a long-term deal.”  

After the arbitration hearing in 1999, the media started to dwell on Jeter’s contract status. Unlike the current environment, however, the shoe was on the other foot. This time, the pundits criticized the Yankees for being short-sighted, arguing that every year that passed would only cost the team more in the long run. On November 29, 1998, the same Joel Sherman mentioned above wrote about all the reasons Jeter was worth the money he was reportedly demanding. Basically, Sherman’s argument was “ He’s Derek Jeter, pay him”.

Before the start of the 2000 season, it seemed as if the Yankees were finally going to heed the advice of those beseeching them to sign Jeter to a long-term deal. The two sides had gone so far as to establish the parameters of a seven-year, $118.5 million agreement, but late in the process Steinbrenner became reticent about topping Kevin Brown’s record $15 million salary  by paying Jeter nearly $17 million per season. As a result, the Yankees instead inked their star shortstop to a one-year deal worth $10 million. Once again, the drum beat from the press corps was the same: the Yankees would pay more in future because of their refusal to tip the scales in the present.

If [George Steinbrenner] is using the [Ken Griffey Jr.] pact as a ruler, he should remember this: If Jeter gets to free agency, Griffey’s deal is going to be obsolete. Plus Jeter, who is coming off a career year in 1999, could have a pair of MVP awards and two more World Series rings by the time 30 clubs can bid on him.” – George King, New York Post, March 26, 2000

When Jeter signed a 10-year/$189 million deal on February 10, 2001, it looked like all of the pundits were right: the Yankees’ penny wise strategy had proven to be pound foolish. Not only did the team wind up paying $2 million more in annual salary, but they also had to throw in three more years and an extra $70 million in guaranteed money. Of course, the Yankees probably couldn’t be blamed for not foreseeing the mega deal that Alex Rodriguez signed two months earlier, but nonetheless, the length and terms of the deal left many believing the team would seriously regret its decision to back away from the smaller deal that was all but in place the previous spring.

When you do a deal this important with a player as important as Derek Jeter, it’s better to get it right than rush to judgment. People would have liked it done sooner, but it’s better to be done right.” – Yankees’ President Randy Levine, New York Daily News, February 10, 2001

“I wanted to play here. I never wanted to see if the grass was greener somewhere else. I couldn’t picture myself doing it, and even if I played out the year and became a free agent, I wouldn’t have.” – Derek Jeter, New York Daily News, February 10, 2001

The two comments above were in reference to Jeter’s recently expired contract, but they could both easily apply to the current round of negotiations taking place today. Interestingly, however, had the Yankees signed that initial 7-year/$118.5 million deal, no such conversation would be taking place. Instead, Jeter’s deal would have expired after the 2006 season, which also just so happened to be one of the best of his career. A 32-year old Jeter, coming off a season in which he finished second in the MVP voting (.343/.417/.483), could have easily commanded another big money deal. After all, the 2006 season off season, which occurred before the recent market correction, featured the following overpriced deals: 8 years/$136 million for Alfonso Soriano; 7 years/$126 million for Barry Zito; and 6 years/$100 million for Carlos Lee. Based on that context, it isn’t far fetched to think Jeter could have signed another 7-year deal worth around $154 million.

Based on the previous assumption, it seems as if the Yankees decision to hold off on signing a contract extension in 2000 actually paid off in the long run. So much for the wisdom of all those pundits? Of course, the final verdict on that decision won’t come until an agreement is reached this offseason. If Jeter acquiesces to the Yankees’ current 3-year, $45 million proposal (Scenario A), the Yankees will wind up coming out ahead by almost $40 million (without factoring in inflation as well as time value). However, if the terms of the new deal are closer to 4 years at $80 million (Scenario B), the difference would be a virtual wash. In that case, the Yankees would have probably been better off giving Jeter his new deal back in 2006, when there would likely have been less acrimony, especially with George Steinbrenner still involved in the process.

Scenario A

  Amount Years Annual Salary
2000 Reported Proposal $118,500,000 7 $16,928,571
2007 Estimated Contract $154,000,000 7 $22,000,000
Total $272,500,000 14 $19,464,286
       
Actual 2001 Contract $189,000,000 10 $18,900,000
2011 Reported Proposal $45,000,000 3 $15,000,000
Total $234,000,000 13 $18,000,000

 

Scenario B

  Amount Years Annual Salary
2000 Reported Proposal $118,500,000 7 $16,928,571
2007 Estimated Contract $154,000,000 7 $22,000,000
Total $272,500,000 14 $19,464,286
       
Actual 2001 Contract $189,000,000 10 $18,900,000
2011 Reported Demand $80,000,000 4 $20,000,000
Total $269,000,000 14 $19,214,286

 

Although Derek Jeter and the New York Yankees have enjoyed a strong relationship through the years, the facts show that they haven’t always been on the same page when discussing money. If that was the case when Jeter was still in his prime, should we be surprised that they are still disagreeing on “value” at the end of his career? As both sides have repeated numerous times throughout the years, baseball is a business. So, instead of getting all hot and bothered over an ongoing negotiation that is likely to culminate in an agreement, it makes much more sense to simply let business takes its course. If the two sides do eventually decide to part ways, they’ll still be plenty of time to assign blame.

Nov 232010

While we at TYU have spilled a lot of virtual ink over the Derek Jeter contract, we’ve seldom touched on the Mariano Rivera contract situation. The negotiations have gotten much less press than the Jeter ones, so let’s check in.

Last we heard, Mariano Rivera wanted a two year contract. Last night, we learned that the Yankees want to offer Rivera a one year deal, though.

According to that piece from MLBTR, Rivera wants not only a two year deal, but a raise from his $15MM salary.

I’m of the opinion that, overall, these negotiations will go more smoothly than the Jeter ones have so far, but I think Rivera is going to need to back down a bit here. He, apparently, wants a deal for two years worth $36MM, which would be (obviously) $18MM a year.

Mariano may be the best closer around, but that is a little much. $15MM for a closer is a lot to begin with; a raise on top of that is just exorbitant. Because of how well Rivera keeps himself in shape and how well he knows his body, I’m comfortable giving him a two year contract. In this, I’m on the opposite side from the Jeter situation.

As I’ve said in prior posts, there are two devils in contract negotiations: the Years Devil and the Salary Devil. With Jeter, I’m willing to give in to the Salary Devil. With Rivera, I’m willing to give in to the Years Devil.

Mo knows his body well and keeps himself in incredible shape. Because of that, I don’t mind giving him a two year contract. However, $18MM is too much for a reliever…any reliever. I think, eventually, the Yankees and Rivera will settle on a 2/$32 contract–Mo gets his years and his raise, though at a more “reasonable” (I’m using that term loosely) rate.

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