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Dec 142010

Russell Martin has agreed to a one year deal with the Yankees, reports Alden Gonzalez of MLB.com. While it is just a one year deal, Martin does have another year of arbitration eligibility left and will therefore remain under Yankee control in 2012 if they tender him a contract. I like this move, and I believe that it is a good first step in the Yankees “Plan B.” They need to fortify the entire roster, get Andy Pettitte to come back, and then address the hole in the starting rotation on their own terms. There is no reason to run out and make a move for a starter in a panic when you are bringing back every key player from a 95 win club.

Some think that this means Jesus Montero will be traded, but I see it more as insurance for the club if Montero struggles out of the gate. He will serve as a placeholder for Jesus much like Bengie Molina was for Buster Posey in 2010. Why Martin? This is what i said when he was first mentioned as a non-tender candidate:

Martin’s career has evaporated over the last two seasons, but he would likely represent an upgrade defensively behind the plate over every catcher that the Yankees have, and he still has some pop in his bat. He could take the Cervelli role in the 3-headed Yankee catching monster while allowing Jesus Montero to ease onto the roster slowly. If the Yankees get lucky, he could revert back to his old self and become an extremely valuable trade chip or allow the Yankees to explore trading some of their catching assets.

Those of you who have been complaining about the Yankees’ defense behind the plate should be excited, as Martin represents a marked improvement over what the club had back there in 2010. If he recovers any of his bat, he will go from being a decent piece to being a valuable asset.

Dec 142010

Yesterday, we read a bit about the Yankees and Royals not necessarily being good trade partners when it comes to Zack Greinke.

As the article states, this makes sense. Aside from Jesus Montero, the Yankees don’t have much in the way of up-the-middle talent, save for someone like David Adams, but he’s far from a package headliner. Eduardo Nunez could also be considered up the middle “talent” but he’s a throw in at best.

This does, however, sell Brett Gardner a bit short. He can most definitely play center field, and his name, according to Jerry Crasnick, came up in trade talks between the Yankees and Royals. Obviously, for a guy like Greinke, Gardner’s not going to be the headliner. But, let’s forget specific deals for a moment. Would you include Brett Gardner in a trade?

Because I would. Gardner definitely has value to the Yankees. He’s cheap and can provide good production which gives him good value. However, there’s a chance we never see a season quite this good out of Gardner ever again. I’m always a proponent of letting a guy go a year early rather than a year late. Granted, this strategy works more when discussing free agents. I guess we could call the trade version of this selling high.

Replacing Gardner could be an issue since there’s no one in line to simply take his job. The Yankees could opt to run a platoon for LF if Gardner left via trade, but there doesn’t seem to be much of a point to that. Unless you’re getting something great in a Gardner-inclusive package, you might as well just keep Gardner and sign a platoon partner for him/Curtis Granderson.

In a package for Greinke, I’d include Gardner because that could lessen the prospect load. However, if we’re trading Gardner straight up for someone or as a headliner, I wouldn’t do that. If Gardner is the headliner, chances are he’d more valuable to the Yankees than the player he’d be traded for would. Of course, if the Cardinals really want to turn Colby Rasmus into Brett Gardner, I’d be happy to do that swap, and drive Brett to the airport.

The chances that Brett Gardner gets traded are very small and there are two fundamental questions: Would you trade Brett Gardner? Yeah, sure. I’d definitely explore the option. Will Brett Gardner be traded? Probably not. And if he isn’t traded, I won’t be mad.

(The following is being syndicated from The Captain’s Blog. For a revised analysis based on updated contract terms, click here.)

Cliff Lee probably wanted to return to Philadelphia all along, but he did not leave a lot of money on the table to do so. Contrary to the prevailing wisdom, the five-year, $120 million deal that Lee signed is not worth much less than what Jerry Crasnick reported was the Yankees final offer of six years at $132 million plus a $16 million player option. In fact, it might actually be worth more. The devil is really in the details, particularly the vesting sixth year option and incentives that exist in the Phillies’ offer, but even with those blanks left unfilled, we can still get a pretty good idea about how the two deals compare.

Comparison of Yankees’ and Phillies’ Reported Offers to Cliff Lee

  Phillies: 5 Years, $120 million     Yankees: 7 years, $148 million
Year Salary Present Value   Salary Present Value
1 $24,000,000 $24,000,000   $22,000,000 $22,000,000
2 $24,000,000 $22,605,728   $22,000,000 $20,721,917
3 $24,000,000 $21,292,456   $22,000,000 $19,518,085
4 $24,000,000 $20,055,478   $22,000,000 $18,384,188
5 $24,000,000 $18,890,362   $22,000,000 $17,316,165
6       $22,000,000 $16,310,188
7       $16,000,000 $11,172,839
Total $120,000,000 $106,844,024   $148,000,000 $125,423,383

 Note: Based on a nominal interest rate of 6% compounded monthly. Assumes salary paid in full each year (which favors shorter-term deal).
Source: zenwealth.com

Without factoring in the sixth year option, Lee left about $19 million in present value on the table, but that amount can be whittled down by about $1 million if you assume the extra $2 million in annual salary from the Phillies’ offer is invested at about 6% over the life of the deal. Furthermore, when you factor in New York State’s 6.85% top tax rate, which is more than twice that of Pennsylvania’s, the difference is mitigated further.

Even putting more nebulous variables like interest and tax rates aside, it’s still easy to narrow the gap between the two offers. For example, if the sixth year option is worth $16 million, as in the Yankees’ offer, the difference between the two deals would be narrowed to about $6.5 million. Of course, just because he won’t be under contract to Philadelphia in 2017 doesn’t mean Lee won’t be pitching somewhere. In other words, if he is able to negotiate a salary with a present value of $6.5 million (about $9.3 million) in that season, he’d actually wind up coming out ahead.

The bottom line is Cliff Lee did very well by his bottom line. He may have taken less guaranteed money, but in the long run negotiated a deal with the Phillies that is at least on par with the offer he had from the Yankees (and likely the Rangers as well). There’s no need to laud the Phillies’ stealthy maneuvering or applaud Lee for taking a discount because neither is appropriate (at least not until the final details are confirmed and suggest otherwise). Besides, what does it matter anyway? Lee is back where he wants to be and the Phillies are holding four aces. Now, it’s up to the rest of baseball to come up with a straight flush.

The news broke late last night, the mystery team was real after all and it proved to be the Phillies. There were reports that Cliff Lee let it be known in recent days that his first preference would a return to Philadelphia, and the two sides worked out an agreement for 5 years and 120 mil, with a reachable 6th year option. Here’s some quick reactions:

-For potential trade targets (and a glimpse at next year’s FA class) check out the MLBTR 2012 Free Agent list. It’s not a great class, but with Pujols looking for a monster extension maybe someone like Chris Carpenter can be had on a 1 year rental. Most of the rest of that list is either old, uninspiring, or unlikely to be had with the various contract options attached.

-Until Andy Pettitte comes back, as Yankee fans we have to admit the Red Sox are clearly the better team. The lineups are comparable, but the rotations aren’t close as things stand right now. Even once Andy comes back, I’ll give the edge to the BoSox. But at least then it’s a fight, right now it isn’t. Sergio Mitre and Ivan Nova simply aren’t as good as Clay Bucholtz and Dice-K.

-No faulting Brian Cashman here. He met with Lee twice and offered him more money than anyone else. MLBTR has the details:

Crasnick hears the Yankees offered a deal that guaranteed Lee $132MM over six years, plus a $16MM player option for a seventh year (Twitter link).  At $148MM guaranteed, that was the highest bid.  The Rangers offered $138MM over six years, and their proposal included a vesting option that could have brought the value of the deal to $161MM, according to Yahoo’s Tim Brown (Twitter links).

I must admit I’m surprised at how aggressive the Rangers were, but it didn’t matter. Lee just didn’t want to pitch here or in Texas, and took anywhere from 28-41 mil less to go back to Philly.

-As depressed as you might be right now as a Yankee fan, think about rooting for the team across town. The Mets plan on doing nothing this off season, and already project to be at the bottom of their division. Now the best team in their division just got MUCH better. The Met rebuilding plan should target 2015 as the next year they have a realistic shot at winning the division.

-Philly must be a great place to play and/or their GM Ruben Amaro has a knack with getting great 32 year pitchers to sign below market. First Roy Halladay signs a below market deal, now Cliff Lee. Their rotation is now unstoppable with a top 4 of Halladay, Lee, Oswalt, and Hamels. That’s easily the best top 4 in the game, and paired with their offense all they need to do is stay healthy and the National League is almost a forgone conclusion. Never know in a short series, but that’s as good as it gets. Their only question is age, seems like most of the key elements are 32 and older, but they could be a dynasty for the next few years.

This is not official yet, but rumors (from reliable sources) going around the Twitterverse have been reporting that Cliff Lee turned down the Yankees’ approximately 7-year 154 million dollar offer for a 5-year 115 million dollar deal from the Phillies, a team that virtually nobody thought was even in on Lee.  It’s a bizarre turn of events because the Phillies traded Lee last year after he wouldn’t sign an extension with them, but evidently these things can change.  It’s unusual to see players leave money and years on the table (especially that much money), but I can’t fault Lee for turning down the money and going where he wanted to be.  I also can’t fault Brian Cashman here.  He did his job and gave Lee the highest offer, but evidently, Lee didn’t want to go to New York.  It’s unfortunate for the Yankees and Brian Cashman, who did his job and gave Lee the (presumed) highest offer.

So what’s next for the Yankees after this bombshell?  The Yankee rotation without Lee looks dangerously thin, and Cashman’s next task will likely be to beg Andy Pettitte to hold off retirement for one more year.  With Pettite, the rotation of Sabathia, Petttitte, Burnett (hopefully cured by Larry Rothschild), Hughes and Nova could still be playoff-worthy, but I imagine the Yankees will look to add another arm.  The free-agent market is pretty barren, with the best remaining guy, Carl Pavano, standing virtually zero chance of signing with the Yankees (and the Yankees probably don’t want him back either).

To acquire a frontline starter, the Yankees will probably have to look at the trade market.  A lot of speculation will revolve around Royals ace Zack Greinke, but I imagine that Dayton Moore’s high price will prevent a deal from happening, as he’ll try to chisel the seemingly desperate Yankees.  A Greinke deal would have to start with a Montero-caliber prospect, but the Royals already have an all-hit no-field catching prospect in Wil Myers, and the Yankee system lacks up-the-middle prospects that the Royals would covet.  I’m not sure who else could be made available, but there’s no ace-caliber arm on the trade market other than Greinke.  There may be concerns about how Greinke with his social anxiety disorder will be able to handle New York, but I wouldn’t let that get in the way of acquiring him if the price is right.

I doubt it will happen, but I think the Yankees should consider moving Joba Chamberlain back to the rotation.  Is it a panic move?  Maybe, but one with significant upside.  I think Joba still has the ability to be as good as if not better than pretty much any non-Greinke pitcher the Yankees could bring in.  Barring a trade for a frontline starter, it is an option that must be explored, because an 8th-inning guy is so much less valuable than a solid starter.  I know he’s been in the bullpen for a full season, but we’ve seen less talented relievers become successful starters (CJ Wilson and Ryan Dempster for example), and it’s worth a shot to see if Joba can rediscover his mojo in the rotation.

Are the 2011 Yankees  worse without Cliff Lee?  Almost certainly.  Are there some silver linings?  A few.  As EJ has alluded to, signing Lee to a big contract would be committing big dollars to another player in his 30′s who is on the wrong side of his prime.  By avoiding the contract, the Yankees could maintain flexibility, allowing them to shell out for the next big free agent (and preferably, one who’s not 32).  Additionally, they may get to keep their first-round pick in a loaded draft (unless they do something stupid like signing a Type-A reliever).  Also, Lee’s signing with Philly means that he’s not making a potential AL rival stronger.  Finally, the Yankees are returning pretty much the entirety of a 95-win team, while adding their top prospect into the catching mix.  Convinced?  Neither am I.  I would have loved to have Lee in the rotation, and I believe that he could have held up pretty well over the duration of the contract.

As Yankee fans, we’re used to getting everything we want.  For once, however, we’ll have to watch the shiny new toy we desperately wanted go somewhere else.  And it stings.  Regardless, it’s premature to panic and concede the season and the division to an improved Boston squad.  There will be bridge-jumpers and alarmists, but this is still a good Yankee club, and they still have to play the games.  Is there such thing as a 200 million dollar underdog?  There may be now.  Russell Martin here we come!
Update: Apparently the Rangers’ final offer may have been a little higher than the Yanks’.  6-year offer with a vesting option for a total of 161 million.

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