Two or three years ago it appeared that baseball salaries were taking a slight step backward, particularly when it came to older players on the free agent market. That last part is still very much true, but baseball salaries are once again booming. We’ve seen three of baseball’s five $200M+ contracts handed out over the last four months and eight $100M+ deals handed out since late-October. The Yankees were involved in only one of those transactions: CC Sabathia’s new five-year, $122.5M extension.
It appears as though the sale of the Dodgers has motivated a pair of clubs to lock up their own young players to mammoth extensions to avoid having them flee to Chavez Ravine in the near future. These two contracts impact the game in a number of ways, and the Yankees are not immune to the change.
Joey Votto — ten years, $225M
To understand the magnitude of this contract, you need to first realize that Votto was not a free agent. Not only was he not a free agent, but he was two full years away from becoming a free agent. Votto eclipsed the Prince Fielder contract and signed the fourth-most lucrative contract in baseball history without ever going out onto the open market and suckering several teams into a bidding war. Nice work by his agent.
The question now is was the Votto deal an outlier, or a sign of things to come? The Yankees have their own homegrown star two years away from free agency in Robinson Cano, and they better hope this Votto deal is an outlier. I love Robbie, but I don’t love him as much as the Reds apparently love their first baseman. I’d like to think that the Jose Reyes contract — six years and $106M — set the market for Cano, but the prices have since escalated and figure to continue doing so over the next two years.
Last summer I was thinking a six-year, $120M extension for Cano — covering 2012-2017 — but that’s obviously not going to happen. He’ll be 31 when he hits free agency after next season, which isn’t far off from the age when middle infielders tend to collapse. If Scott Boras is looking for a Votto-sized deal for Cano after 2013, there will absolutely be a strong argument that the best thing the Yankees could do is let him walk. Thankfully we’re still two full seasons away from this being a real concern.
Matt Cain — five years, $112.5M
The Cain deal has more of an indirect impact on the Yankees. They don’t have any pitchers due to become free agents in the next year or two that are in Cain’s class, even if Phil Hughes blows up and turns into the guy we all thought he could be back in the day. The track record just wouldn’t be there to justify the contract.
Instead, the impact of Cain’s deal will be felt if the Yankees plan on diving into the free agent market sometime in the next year or too. Cole Hamels was probably destined to get Johan Santana money from the start, but this probably cements it. Zack Greinke’s price went up as well, though we know the Yankees have already deemed him unfit for New York. Matt Garza, Tim Lincecum, and Josh Johnson could benefit from Cain’s deal even though they won’t hit the open market until after next season.
The price of pitching just went up, which is why Michael Pineda and Ivan Nova will be very important if the Yankees seriously intend to get under the $189M luxury tax threshold in 2014. Even the Triple-A guys — David Phelps, Adam Warren, and Manny Banuelos specifically — will be important when it comes to keeping costs down at the back of the rotation or even in the bullpen. Viable alternatives just won’t come affordably.
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The Yankees have been setting the market for decades now, but other clubs are starting to catch up a bit. Blame the new stadiums, the new television contracts, and the revenue sharing program. The Votto and Cain contracts undeniably impact the market for top-tier talent going forward, a demographic the Yankees tend to target. I’m sure they’re going to re-sign Cano to something outrageous in two years, at least that’s how I feel right now, and we’ll have Votto, Fielder, and a several others to thank for that.