Arbitration Decision: Derek Jeter

Fan Confidence Poll: November 22nd, 2010
Arbitration Decision: Javier Vazquez
In 2000, Jeter reminds us how many rings he got. His reward: $189 million. (Amy Sancetta/AP)

Normally the Yankees would have another week or so before they had to decide whether to offer Derek Jeter, along with their other free agents, salary arbitration. Unless something happens to any of their free agents in the next week that won’t change the decision process. The difference is that we learn their intentions a bit earlier. In the past couple of years that has meant little, as the Yankees haven’t offered any of their free agents arbitration. This year, though, we could see a couple.

Earlier in the month Mike looked at some of the arbitration decisions and determined that the Yankees probably shouldn’t offer it to anyone except maybe Lance Berkman. I disagree. I don’t see any downside in offering it to Derek Jeter. He and the Yankees are working through a negotiation, and the offer of salary arbitration can act as an advantage for the Yankees. At this point, with no contract on the near horizon, they should certainly make the offer.

If Jeter declines

The Yankees have reportedly offered Jeter three years and $45 million. That’s just an opening gambit. There is no way the Jeter camp accepts. The Yankees know this. But the Yankees also know that few, if any, other teams would put this much on the table if Jeter decided to solicit offers. Adding an arbitration offer would create an even larger advantage.

If Jeter declines arbitration, teams would then have to not only beat three years at $45 million, but would also have to sacrifice a first round draft pick. True, the bottom 15 teams would have to sacrifice only a second rounder, but take a look at the draft order. Would Jeter sign with any of the teams with protected picks? Perhaps the Dodgers, but it doesn’t sound as though they have much money. But starting with the Tigers teams would have to give up their first rounder. Would they be willing to beat the contract and give up the pick? If the first is unlikely, the second makes it a no-contest.

The Yankees already have the leverage in this negotiation. They’ve made Jeter an offer well above what the open market would provide. Jeter risks tarnishing his image by picking up his ball and going to another team for less money. The Yankees might take a temporary PR hit for not bringing back their captain, but they will have offered him the most money. If they keep winning, they will recover from any black eyes. Offering arbitration only adds to this leverage.

If Jeter accepts

The chances of Jeter accepting arbitration are quite slim. From what we’ve heard he wants a deal of at least four years. Accepting arbitration would not only mean he gets just one year, but it means he goes through the same charade again next year. This is why offering him arbitration is basically a risk-free decision. The Yankees gain leverage with only a small chance of an adverse effect.

Even if Jeter does accept arbitration, is that so bad for the Yankees? They’d still have time to work out a deal between now and the February hearing. All it would do is guarantee Jeter’s spot on the 2011 team at a certain salary. Since he made $22 million last year I presume that he wouldn’t submit a figure of over $25 million; the Yankees will probably offer that same $22 million and would likely win if Jeter went over $25 million. That’s what happens when you have your worst season at age 36.

Given the upside and downside of the decision, I can’t see any reason for the Yankees to not offer arbitration. By not offering it they make Jeter slightly more attractive to other teams. I don’t think that will ever become a factor, but negotiations can go bust at any time. In the unlikely event that Jeter or the Yankees decide to walk away from the table, the draft pick compensation will at least give the Yankees something should Jeter decide to sign elsewhere. It’s not much compared to what Jeter could bring them in 2011, but it’s certainly better than getting nothing should things go horribly wrong.

Fan Confidence Poll: November 22nd, 2010
Arbitration Decision: Javier Vazquez
  • The Honorable Congressman Mondesi

    Co-sign on all of this. It’s a no-brainer.

  • Do Not Feed The Trolls!

    See I like the idea but there’s no suitable replacement for him next either. If you go through Arb again next year you pretty much paid him 2Y 44MM contract. If its a one year thing them Im all for it.

    • B-Rando

      I don’t see anyway Jeter accepts arbitration. The way he’s approached these negotiations shows us he’s a player who wants to be treated as one of the all time greats. He wants to have a contract that pays him big bucks until he’s into his 40s.

      I think Jeter accepting arbitration for him would be almost like giving up on the negotiations, and I just don’t see that happening.

      I bet Jeter signs elsewhere before he accepts arbitration.

      All that said, it obviously makes a lot of baseball sense for the Yanks to offer him arbitration. Unfortunately though, I feel doing so may sour the negotiations even further. Because now its not a matter of the Yanks just trying to get him for a reasonable price, but its them “tainting” him so that theres even less incentive for other teams to sign him.

      I guess thems da breaks..

  • Beamish

    Jeter accepting Arbitration would be a dream outcome for the Yankees. Only more year – even at an inflated $25 million – would almost certainly cover the milestone 3,000th hit and then there would be nothing left to bringing Jeter back except a bankrupt SS market in which a 37 year old Jeter is not going to command any kind of premium.

    I soured on the Jeter camp the moment Casey Close decided to take this negotiation to the media with his retarded “baffled” comment. I had simply assumed they would negotiate quietly and meet at some foolishly inflated 4-5 year, $75-$100 million contract simply because of Jeter’s status as “Captain” and the face of the Franchise for 15+ years – now I wonder if Close and Jeter might not overplay that hand right into a truly ugly outcome of a low-ball take-it-or-leave-it offer.

    • Jimmy McNulty

      That and he’s still probably better than any other shortstop they could realistically acquire.

    • Jobu

      While it is possible, I have a hard time seeing a low ball take it or leave it situation developing. The Yankees have 3/$45M on the table. The general consensus is that is an over market rate offer. I see a possibility that the negotiations go badly and the Yankees just stick to the 3/$45M, but it is hard to call that a low ball offer.

    • gc

      I soured on the Yankees camp (even though I agree they should try to keep this deal as reasonable as they can) the second Randy Levine had to chime in and get involved with the press. And that, to me, is what instigated Casey Close’s comment. The whole thing was fine, even when Cashman gave his interviews following the Tampa meetings. That was expected, it was in context, it was appropriate. Do we really need to hear from Randy Levine?? So yeah, when he starts getting involved with the press statements, it turns me off and makes it come across (to me, anyway) like the “Yankees” are going out of their way to make statements in the press to make sure everyone knows they are looking at Derek Jeter as just another ballplayer. Even though Cashman himself referred to both Jeter and Rivera as “legacy players.” I’m not interested in what Randy Levine has to say and wish he would just shut up and let Cashman and Jeter’s people work this thing out. You’re not helping.

  • OldYanksFan

    I’m guess the Yanks will go 3/$50m, or approx. $17m AAV. So if he accepts Arb, it costs the Yankees $5m but gives them some flexibility. However, Jeter could ask for $23m or $23.5m. and maybe his rep gets him a win in Arb and it costs us $6m of so?

    I guess the only way this might backfire is IF we offer arb and he takes it, and then goes and has a good/very good year… maybe .775 OPS. So next year Jeter feels he’s now (2011) worth 3/$45-$60m, and it starts all over again.

    But I guess 2/$45m (via 2 years of Arb) and getting to see how Jeter plays is not that much worse then a guaranteed 3/$50m or 4/$60m. Plus, if Jeter turns it down, there is a tiny bit more incentive to let Jeter walk.

    I want Jeter back, but only at a fair price. I will accept 3/$45m, even though that’s more then he’s worth. However, if Jeter continues to hold out, it tells me his ego is out of control, and that being a Yankee and finishing his career here, and winning first, is bullshit.

    Frankly, if he IS offered 3/$45m and turns it down, and there isn’t a fast 2nd offer and acceptance, I’m ready to see him walk, just because this is pissing me off. History and intangibles just don’t go far to winning in 2011-2013. Paying a guy with Jeters situation (age, defense, .710 OPS in 2010) over $15m/yr seems EXTREMELY generous.

    Maybe it’s premature, but I am already pissed off. Nunez + $50m + a draft pick is starting to look VERY good to me.

    • king of fruitless hypotheticals

      if he takes arbitration and has a monster season…well, we got a monster season out of it. if he’s doing that well at the end of the year, that might mean he’s pushed his cliff out a little farther. a rolling arb might not be all that bad…

  • Zack

    Anyone else wish Jeter hired Boras as an agent? Could have got a ton of laughs from his comments, narratives, and ‘offers’ from other teams.

  • JGS

    True, the bottom 15 teams would have to sacrifice only a second rounder, but take a look at the draft order. Would Jeter sign with any of the teams with protected picks?

    But…that’s not what the Baltimore Sun told me

    • Zack

      Favorite comment: Do you get paid to write this nonsense?

      • JGS

        Mine is “looks like someone needed hits today”

    • joe lefko

      Favorite sentence(s): But he … won a Gold Glove. He’s no Cesar Izturis defensively…

      • JGS

        Heh. Maybe not, but Cesar Izturis played in 150 games this year, qualified for the batting title, and hit .230/.277/.268

        That .268 slugging was the worst by anyone who qualified for rate stats in 20 years.

    • JerseyDutch

      Uh, they can’t really think that the O’s bidding on Jete would really drive up the price, can they?

  • Jobu

    If I were running the Yankees I would offer arbitration and then just stick by my 3/$45M. I would keep that offer open until the start of training camp in the spring. I don’t think another team will top it especially with draft pick compensation. I would also keep driving home to the fan base that it is a fair offer for an aging shortstop and he would still be the highest paid shortstop in baseball by more than $3M per year (according to Cott’s).

    This could also be why I am not running a baseball team.

  • OldYanksFan

    “…at some foolishly inflated 4-5 year, $75-$100 million contract..”
    Jeter would jump all over that, but I don’t think (and ceratinly hope) the Yankees don’t go there. I think the above number is insane. A 4th year for Jeter (which I’m against totally) at anything more then $8m is just insane, and could be one of the worst contracts in history.

    Bernie got $1m for his last year. I know Bernie was ‘quiet’, but for most of his career was better then Jeter in both O and D at (also) a premiere defensive postion.

    Is Jeter REALLY that much more important then Bernie?

    • Klemy

      Bernie, we appreciate you posting here, but please try to keep your past displeasure with your contracts to yourself! -just kidding

  • Andrew

    If Jeter accepts arbitration, what is to stop the Yankees from submitting a bid of, lets say, $20 million. I know that salary decreases are unprecedented, but so too is a 36 year old going to arbitration. I am sure the Yankee lawyers can make a fair argument that a 36 year old coming off a career bad year is not worth as much as his last year’s salary. However, if my recollection is correct, advanced stats can’t be used in arbitration. In other words, Jeter will be viewed as a good defensive player by the arbitrator because of his Gold Glove and the range metrics etc. can’t be used by the Yankees to refute that point.

    • Zack

      You can use advanced stats, but good luck trying trying to get non-baseball people to understand them in the hour you have to make your case.

    • Ed

      If Jeter accepts arbitration, what is to stop the Yankees from submitting a bid of, lets say, $20 million.


      I know that salary decreases are unprecedented

      They’re not. They used to happen regularly in the 80’s and 90’s. They happen less now because non-tendering players wasn’t very common back then, and the rules used to have more reasons for a team to want to offer arbitration.

      but so too is a 36 year old going to arbitration.

      Free agents in general rarely go to arbitration. Usually either the player is looking for a multi-year deal, or the player has declined enough that the team wants to cut ties with the player. It’s really rare for arbitration to make sense with free agents.

      However, if my recollection is correct, advanced stats can’t be used in arbitration.

      They can be, but the arbitrators aren’t baseball people. You’re not likely to get far with the advanced stats. In the case of defensive stats, yeah, you won’t get far. Advanced defensive stats are still in the early stages, and it’s not hard to find players that rank on one extreme with one stat and on the other extreme with another. I’d imagine Jeter’s agent could tear apart those stats easily.

  • Jobu

    Cott’s list of highest paid active shortstops:

    Derek Jeter, $18,900,000 (2001-10)
    Michael Young, $16,000,000 (2009-13)
    Miguel Tejada, $12,000,000 (2004-09)
    Hanley Ramirez, $11,666,667 (2009-14)
    Rafael Furcal, $10,000,000 (2009-11)
    Edgar Renteria, $9,250,000 (2009-10)
    Julio Lugo, $9,000,000 (2007-10)
    Cristian Guzman, $8,000,000 (2009-10)
    Jimmy Rollins, $7,000,000 (2006-10)
    Jack Wilson, $6,733,333 (2007-09)
    Jose Reyes, $5,812,500 (2007-10)
    Khalil Greene, $5,500,000 (2008-09)
    Troy Tulowitzki, $5,166,667 (2008-13)

    Michael Young hasn’t played shortstop since 2008, so Jeter just turned down a deal that would have kept him as the highest paid shortstop in the league.

    • JGS

      Not only that, but the max value of Tulo and Hanley’s deals don’t get to that level either. Tulo has a 2014 option for $15M, and Hanley’s 2014 salary is $16M

      • Hughesus Christo

        Tulo and Hanley are irrelevant to the discussion of Jeter’s contract because they haven’t ever been free agents.

        The only comps (Furcal, Renteria, Tejada, Lugo) all suck and get paid plenty more than the most of the farcical “put the nails to him” proposals I’ve seen floating around comments here.

        • Zack

          Tejada signed that contract in 2004 and it expired last year, wouldn’t call that a comp.
          Lugo’s contract was also signed 3 years ago.
          That was Renteria’s salary last year, if he gets 5m this year then Jeter’s 15m would be 3x greater.

          And for them sucking; just because Oliver Perez sucks and gets 12m, does that mean Lee’s agent will get 30m/year?

          • Ed

            And for them sucking; just because Oliver Perez sucks and gets 12m, does that mean Lee’s agent will get 30m/year?

            Say Lee goes to arbitration with Texas, and the offers are $12m from Texas and $30m from Lee.

            At that point, yes, making the Oliver Perez comparison would probably be one of the key points Lee’s side made. Make that point, and throw in CC and Johan’s salaries for comparison, and yeah, he’d easily win the $30m salary.

          • Hughesus Christo

            I would love to see someone try to argue deflation (re: Tejada/Lugo) in an arbitration hearing.

            • Zack

              Tejada was 36 last year, and got paid 6m.
              Jeter doesn’t turn 37 until sometime during the season.

              So how is Tejada’s salary from ages 30-35 a comp for Jeter at age 36/37?

              • Zack

                Note: I’m not saying what if the Yankees offer 6m in arbitration.

  • Matt Imbrogno

    Please offer; I’ll make sacrifices to make sure he accepts. Anyone got a whole chicken*?

    *A bucket will not suffice.

    • Jobu

      Fried chicken does not make Jobu happy. Bring a live chicken and rum to get things started.

  • A.D.

    I think Arb for Jeter is a no-brainer, the risk on higher salary to be non-guaranteed and a one year deal seems more than worth it, along with making it harder for Jeter to sign.

    For that matter I’d also offer it to Pettitte & Rivera.

    • Corporate Scum (formerly Joe West’s Music Career)

      Rivera, yes. Pettitte, no.

      Pettitte will sign a one year deal with us or retire. It’s a pretty safe assumption he’s not going to another team, period. If we offer arb, he’s looking for a one year contract anyway, and he’d be set up to get a nice raise given his (when healthy) stats last year.

  • Slugger27

    maybe i just dont get it (and that’s usually the case) but why would jeter get so much money in arbitration? i mean what could his camp say that could possibly get him north of 20M?

    • Zack

      Players rarely (if ever) get pay cuts through arbitration; and it goes beyond stats – players are allowed to argue leadership, team record, awards, accomplishments, public status, etc. Basically everything that Jeter is great at doing.

    • Andrew

      The criteria for determining a player’s salary in arbitration is:
      “the quality of the Player’s contribution to his Club during the past season (including but not limited to his overall performance, special qualities of leadership and public appeal), the length and consistency of his career contribution, the record of the Player’s past compensation, comparative baseball salaries, the existence of any physical or mental defects on the part of the Player, and the recent performance record of the Club including but not limited to its League standing and attendance as an indication of public acceptance.”

      Now see why he will get paid in arbitration?

      • Betty Lizard

        Thank you (and Zack) for clarifying what can be considered in arbitration. I never knew that contributions and performance were defined so broadly.

  • Sam

    im sure im just being sentimental, but it is DEREK JETER our captain, should he get paid through the roof? no, but to think about anyone else at SS is a tough pill to swallow. He’ll be back and finish his career in pinstripes, i just hope this wraps up quickly, throw another year on the offer, a few more million and get this thing done. arbitration seems like it will just make things worse

  • king of fruitless hypotheticals

    When looking at the previous salary, is it what the player got paid the last year or the AAV? Seems like another good reason to front load player’s salaries…

    • Ed

      We don’t really know. I don’t think anyone’s gone to arbitration coming off a contract where that would be an issue.

      Front loading in general is usually a really bad idea. Money has a time value to it – $1 today is worth more than $1 next year for a lot of reasons.

  • Johnny O

    Definitely offer arbitration. Clearly Jeter and his agent think they have more leverage than they really do. I honestly don’t see a fan backlash coming if Jeter turns down deals worth well more than his worth on the field.

    Consider this: Jeter’s cashed over $205M in checks from the Yankees. If he accepts this ‘baffling’ deal, he would have been paid over a QUARTER OF A BILLION DOLLARS by the Yankees.

    I think Casey Close hurt his and Jeter’s case with that comment.

    They should all agree to go media silent like the Jets did at the end of the Revis thing. Both sides will be better off.

    • Hughesus Christo


      • Johnny O

        Yes but without commentary. Their leaking of the offer (which will of course go up) makes it easier for Jeter to look like he got a better deal and save a bit of face. I don’t think any reasonable fan looked at 3/$45M and thought “wow jeter’s getting screwed”.

  • Mike HC

    The fact that Jeter allowed his agent to go public, even in response, tells me that Jeter is probably feeling a little slighted. Whether he is justified in feeling that or not, I don’t know, but I really hope this media battle bs does not go much further than this.

    I do remember when Jeter got all pissed when the Yanks told him that he didn’t hit enough homeruns during an arbitration hearing like over a decade ago I think. So it is not completely unprecedented for the Yanks to bring Jeter down a notch or two during contract negotiations.

    • Mike HC

      My bad, I forgot this was about arbitration by the time I wrote this comment.

      I have no idea what the Yanks should do. It does seem like a no brainer though I guess.

  • David in Cal

    I agree that it’s in the Yanks’ interest to offer Jeter arbitration, but I just don’t think they will. They seem to be totally down on the arbitration process.

  • mike c

    don’t play games with derek jeter. sign him already and get it over with

  • MikeD

    Totally agreed. Another way of looking at it is if Jeter came to the Yankees and asked for a one-year contract that would pay him about $23 million, I’d take that in an instant compared to a three-year contract that’s going to come in at $55-60 million. So would the Yankees.

    They will and should offer both Jeter and Rivera arbitration.

  • The Mighty Casey

    Close is blowing it for jeter. I just wrote this.