Yankees re-sign Derek Jeter to one-year contract

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Heyman: Yankees won't make qualifying offer to Hughes, undecided on Granderson
(Jonathan Daniel/Getty)
(Jonathan Daniel/Getty)

Saturday: Sherman has the gory math details if you’re interested. I’ve given up caring about whether they saved money against the luxury tax threshold. It is it what it is. Ronald Blum says the contract includes the same bonus package as Jeter’s previous deal, and unlike the player option stuff, the Collective Bargaining Agreement makes it very clear bonuses count towards the luxury tax if triggered. Jeter can earn a maximum of $7M in awards-based bonuses and the Yankees have to be prepared for that. For all intents and purposes, his “tax hit” for next season is $19.81M.

Friday: To no one’s surprise, Derek Jeter will return to the Yankees next season. Just not the way we all expected. Rather than exercise his $9.5M player option, Jeter has signed a new one-year contract worth $12M, the team announced. Both Joel Sherman and Andrew Marchand report the deal was brokered one-on-one with Hal Steinbrenner as a way to avoid a repeat of their contentious negotiations from three years ago.

According to Sherman and Ken Rosenthal, the Yankees will save approximately $1.19M against the luxury tax with the new contract. The player option was treated as a guaranteed year when the original contract was signed, so Jeter’s original deal was a four-year, $56M pact with a $14M average annual value. The new deal is valued at $12.81M for some complicated reason. There has not yet been any confirmation from Brian Cashman or someone else with the team regarding the luxury tax stuff, however.

Jeter, 39, played in only 17 games this past season due to four (!) leg injury related DL trips. He hit a weak .190/.288/.254 (48 wRC+) in those 17 games and was barely mobile at shortstop, which wasn’t terribly surprising given all the leg problems. Obviously the Yankees expect Jeter to rebound both at the plate and in the field next season, otherwise they wouldn’t have guaranteed him the $12M. The Cap’n hit .316/.362/.429 (117 wRC+) with a league-leading 216 hits as recently as 2012.

Even with Jeter re-signed, the Yankees still need to address the left side of their infield because of the uncertainty surrounding Alex Rodriguez. Even if A-Rod is not suspended, the team can’t count on him or Jeter to play the field everyday. They love Eduardo Nunez and Jayson Nix is a fine utility man, but New York should look into acquiring a better infielder to fill in at short and third on a fairly regular basis. Banking on two guys closing in on 40 with a recent history of leg injuries to stay healthy is an unwise move.

RAB Live Chat
Heyman: Yankees won't make qualifying offer to Hughes, undecided on Granderson
  • pat


  • MannyGeee


    • MannyGeee

      Originally posted before the Luxury Tax implications were explained.

      I can dig it, since he was coming back regardless…

  • http://twitter.com/#!/KChinmaster KenC

    This has to be out of pure respect for the captain. No way would they have done this before we find out if he would accept or decline his player option.

    • Havok9120

      You don’t think that that came up in the negotiations for this?

    • qwerty

      They didn’t want to take any chances that Derek would turn down his option and leave the Red Sox. The yankees should be congratulated for avoiding a PR disaster.

      • qwerty

        *leave FOR the red sox* I mean.

        • forensic

          Why would he leave for the Red Sox? Other than arguably a better chance to win next season, the Red Sox and their fans wouldn’t have been a better place for him than NY and their fans. Theoretically, he’d have been much better off going to a more neutral team and fanbase than Boston.

          Why would the Red Sox want to sign him? They arguably already have two better options at SS for next year (one maybe more expensive and one FAR cheaper) and almost inarguably a better option for years to come at SS.

          At some point the Yankees front office will have to make difficult decisions with tough players, that other teams seem MUCH more willing to do than the Yankees, rather than apparently just giving in to their demands.

          • qwerty

            Why take any chances? The yankees nipped that right in the bud! :)

  • http://www.twitter.com/matt__harris Matt :: Sec110

    If he picked up his option, that would have increased his AAV, right? If so, smart move.

  • http://www.twitter.com/_swarlesbarkley Mark Teixiera – Ghostbuster (formerly Drew)

    They guaranteed Jeter more money to save some for AAV on the luxury tax on his deal. Makes perfect sense. Everyone relax.

    • Need Pitching & Hitting

      I don’t think that’s true though.
      If he actually opted out, the difference between what was paid and what was taxed over the past 3 years (about $9M) would be added to the 2014 luxury tax payroll, on top of the $12M.
      If it’s an extension, and the buyout wasn’t paid, I believe about $6M would be added to his 2014 AAV.

      It’s all rather murky. Hopefully someone can get an official clarification of exactly how much Jeter will count for in total this year.

      Or better yet, hopefully the Yankees delay the $189M plan and this all doesn’t matter.

      • Darren

        Wait, if he opted out, why would the difference of $9mm be added to 2014 payroll? Wouldn’t it be added to 2013?

        • Need Pitching & Hitting

          According to the CBA, it would be added in the year the player option was supposed to be for.

  • mitch

    I suggested this last week. Jeter gets more money, but his AAV decreases. I just strained my shoulder patting myself on the back.

  • http://www.twitter.com/mattpat11 Matt DiBari


  • gbyanks

    Apparently his AAV if he accepted the option would have assumed all his incentives and account for 14.5 million.

    • phil

      So they saved $2.5M enough for Brandon Ryan!

      • MannyGeee

        Its the Jeter/Ryan combo platter! Huzzah!!!

        • toad

          Does it include beans and rice?

      • http://www.twitter.com/mattpat11 Matt DiBari

        Seems like a lot of money for Brendan Ryan

  • JW

    At least in this case, you’ve gotta give ownership credit for walking the walk — willing to spend more money in order to get under the $189 million.

    • jjyank

      I’m hoping this credo extends to a healthy Tanaka bid as well.

      • Havok9120

        Indeed. It’s definitely a way they can flex their fiscal muscle and still keep AAVs down.

  • Darren

    In the most sophisticated halls of business, this is called a “win-win”.

    I hope we can all look back a year from now and talk about how Jeter was paid far below his actual performance. If he’s even at 80% of his 2012 productivity, he’ll be worth every penny of the $12mm – and more.

    • I’m a looser baby so why don’t you kill me?

      I *hope* that too. What I believe however is that we will be extremely grateful, and lucky, if he earns the $12.5mm.

    • dalelama

      Don’t worry he won’t. We are just stuck with more dead weight.

  • Need Pitching & Hitting

    If I’m reading the CBA correctly (and it’s rather murky on this), if he actually declined his player option prior to this, because 2014 would have been included in his original AAV, declining the option would cause the difference between what was paid ($51M including buyout) and what was taxed ($42M, 3 years at $14M AAV) over 2011-2013 would be added to the 2014 luxury tax payroll (up to $9M).
    If he didn’t decline the option, and this was signed as an extension, the amount untaxed over 2011-2013 (about $6M without the buyout), would be added to the AAV of the new contract.

    Maybe I’m missing something, but it seems either way, this deal is worse for $189.

    • Hardy

      I also did not find a definitive quotable answer in the CBA.
      However, the general rule is “Every dollar that is paid to a player will be accounted in the Actual Club Payroll”. The Yankees pay Jeter $60m from 2011-14 and $42m have already been accounted for in 2011-13. Therefore the luxury tax hit for 2014 should be $18m.

      • Need Pitching & Hitting

        That would be my understanding, assuming they didn’t also pay the $3M buyout.

        • Caballo Sin Nombre

          I’m not sure you guys keep thinking there was a buyout payment. A “buyout” is what the club pays if the club chooses to drop the players contract. It’s not something that happens if the player declines a player option. In this case, Jeter declined his option in return for the Yankees giving him a new 1-year contract at a higher amount. The “buyout” didn’t happen. After Jeter declines his option, there is a 2011-2013 contract and a separate 2014 contract.

          • Hardy

            “A “buyout” is what the club pays if the club chooses to drop the players contract. It’s not something that happens if the player declines a player option.”

            The CBA disagrees, see for example XXIII 5. E b (i) A:
            If a Uniform Player’s Contract contains a Club Option Year or a Player Option Year that is not deemed a Guaranteed Year pursuant to subparagraph (a)(ii) above and the Player is to receive consideration upon the non-exercise of that option or the nullification of a championship season (“Option Buy-out”),[…]

  • Jimmie Foxx

    I read what the implications would have been if he picked up the option but what if he had declined, and then signed a one year deal worth the 9.5 mil? Or even a 2 year, 9.5 mil deal.

    • Jimmie Foxx

      Just read what Pitching and hitting wrote

  • Jack

    I get that by Jeter not exercising the option there was an AAV benefit to the Yankees…..but if you are the Yankees do you then give him a raise of $2.5 million???????? Based on the season he had last year…..and his age????? Anyone who says the Yanks are cheap doesnt know what ‘cheap’ is. While $2.5 million is not much to the Yankees, we are still talking M I L L I O N S!!!!!!?

    • nyyankfan_7

      If Tim Linsecum is worth 17.5 million a year – I’ll give Derek Jeter 12 today, tomorrow & 10 years from now.

      • UncleArgyle

        Thank god you’re not the GM. Lets give Cano a 12 year 400 million contact while we’re at it.

    • MannyGeee


    • mt

      My quick answer is that it makes sense for Yanks to pay $2.5 million extra in cash ($12 – $9.5 million) so that they can reduce Jeter’s luxury tax hit from $15.5 million to $12 million – that reduction is worth a lot to them since they either make $189 million target and save a lot of money or over-spend the $189 million, and miss many of the savings (obviously spending something over $189 million, say $195 million, on AAV still “saves” money versus 2013 payroll in excess of $220 million but I am talking about trying to reduce the luxury tax rate and get the market disqualification rebates.

      I still am wondering where he $9 million penalty for underaccruing 2011-2013 goes – do they recalculate 2011-2013 luxury tax or does it hit 2014 which then blows up the logic of this new contract?

      • MannyGeee

        All of this. I decided to be a dick instead of typing this. Well done

  • mt

    I had also suggested a Jeter re-sign at a rate lower than $15.5 million several months ago but Need Pitching and Hitting was very persuasive that the approximate $9 milion penalty for underaccruing 2011-2013 (at $14 million per year in AAV) would be all added in 2014, defeating the purpose of the new contract supposedly.

    Now it seems that Ynaks have signed Jeter to a new contract so maybe I was right originally. It would be good if someone in the MSM could actually find out what happened and how much Jeter actually will count against luxury tax 2014 – I can’t imagine that it is the new $12 million plus the $9 million penalty for under-accrual – that makes no sesnse.

    Maybe the answer is that Yanks were accruing each year of 2011- 2013 at a higher AAV than $14 million, say, $17 million – can teams choose to accrue at a number higher than the minimum calculation? I guess depends on how player option could have been treated.

    • Need Pitching & Hitting

      Joel Sherman is now reporting that the new deal will actually count for a higher $$ against the luxury tax threshold than the player option would have.
      Not sure where he’s getting his numbers from though, they seem way off.

  • UncleArgyle

    So Derek Jeter plays in 17 games and gets a RAISE!!!! This, right here, is exactly the difference between the Yankees and the Red Sox. Red Sox players, i.e, Dustin Pedroia, will voluntarily leave money on the table to help the team. The Yankees, lead by “Captain” Jeter, demands a premium to play for the Yankees. No wonder why Robinson Cano won’t consider a “Home Town” Discount. If anything the Yankees have proven is that if the market says you’re worth 1 year and Ten Million, well the Yankees will give you three years and 50 million. If Jeter truly was the leader we pretend him to be, he would have take a 1 year 5 million dollar offer, instead he negotiates a raise. Ridiculous. And I fully get the luxury tax implication, but I’m sure there was away to get furture under the cap AND pay Jeter less.

    • Darren

      No need to put “Captain” in quotes. Jeter is, in fact, the Captain.

      Other than that, your comment is so stupid that it’s not worth responding to you. I assume you’re a troll, or Dustin Pedroia posting on RAB. Same thing I guess.

      • UncleArgyle

        And you’re a massive Homer. Typically team leaders make sacrifices for the team, rather than demanding more money after a lost season. If your goal is watching your hero’s have retirement tours, so be it. I’d actually like to see the team win.

        • Pee Wee Herman Ruth

          A Derek Jeter retirement tour (which is not necessarily going to take place next year) and the Yankees winning are not mutually exclusive.

          Don’t worry…you will miss him when he’s gone.

        • SDB
          • UncleArgyle

            If you read that article it notes that the Red Sox paid Ortiz 12 mil (same as the yankees are paying Jeter next season) in a year in which he put up a .953 OPS. Do you think there is any chance in the world a 40 year old Jeter will put up a .953 OPS next year?

            • SDB

              No, but Jeter will actually stand in the field more than 4-5 times a year when he’s healthy. Big difference.

        • Robinson Tilapia

          “you’re a massive homer”


        • OldYanksFan

          You totally missed the point.
          But Jeter turning town his option, and signing a new contract, his lowered his 2014 AAV, therefore making the 189m cap easier to hit. So the Yankees essentially paid Jeter a ‘bonus’ to accomplish this goal.

          It was not a ‘raise’, but a trick to save on the 2014 Tax threshold. Jeter made more money and the Yanks saved some (very critical) AAV. As mentioned above, it’s a Win-Win.

          Do you believe Jeter should have done this for free (by signing a new $9.5m contract)? The Yankees, as a business, are worth over $3 billion. If it were me, I would have done the same thing. Would you have made a ‘sacrifice’ to save money for someone worth 100 times more than you?

      • SDB

        “a troll, or Dustin Pedroia”

        Hey, now Dustin Pedroia’s a troll too!

        • http://www.twitter.com/mattpat11 Matt DiBari

          He prefers “elf”

    • nyyankfan_7

      If this in fact the case I fully expect you to walk into your bosses office today and demand that they lower your salary because it will in fact make your company better.

      Either that or put your pants on, walk upstairs and tell your mother that you want her to buy the single stuffed Oreo cookies instead of the double stuffed because it will in fact save them money and make your family better.

      Whichever option better suits your current lifestyle.

    • Robinson Tilapia

      I couldn’t disagree more. All I have to say.

    • Caballo Sin Nombre

      I think the Yankees HAD to give him a raise in order for MLB to accept this as a new contract for AAV purposes. MLB could have otherwise ruled that this was just financial manipulation and recognized AAV at the old rate. The only question is how much of a raise for MLB to recognize this as a valid new contract. $1 would not have worked. MLB can make up their own rules; it’s not a court of law.

      Anything less than $9M would have been overruled by the Union. Not even Pedroia could get away with accepting a pay cut. See: Red Sox attempt to trade with Texas for ARod.

  • dp

    Stupid…waste of money on a useless player…now we get the Jeter retirement tour…yippee…not watching next summer…Hal I hope the Yankees go bankrupt!

    • jjyank

      You sure you’re a Yankee fan in the first place? I don’t know any fans that would not watch next summer because of Derek Jeter. Go away.

    • Pee Wee Herman Ruth

      I hope you and UncleArgyle are leaving early tomorrow to get to the Red Sox parade in time.

      • UncleArgyle

        If I was a Red Sox fan I’d be pretty happy the Yankees were giving raises to 40 year middle infielders who can’t field.

        • Pee Wee Herman Ruth

          Assuming that Sherman is wrong and Marchand is right…maybe the Yankees are not giving Jeter a raise…but rather…an incentive not to exercise the contract or demand a two-year deal.


          • UncleArgyle

            Fair Enough. As long as there is some logic to this. At face value though it seems foolish. As good as Jeter was/is, no team is offering him 9.5 mil with incentives entering his age 40 season….on the heals of a significant leg injury.

            • Robinson Tilapia

              I don’t think it’s that foolish on face value. I think it’s foolish if there’s a cap hit and they’re still going to cry salary limits.

          • Robinson Tilapia

            Seems like exactly that to me.

  • Farewell Mo

    $12 million for a 39 year old broken down SS???

    Hope this means they’re scrapping the $189 bullshit or they just wasted a big chunk of their budget.

    • trr

      Read the article, not just the headline.

      • Farewell Mo

        See what Joel Sherman is reporing.

        Besides, the Yankees could have given him a 1 year/$5-6 million contract to play another year considering he didn’t earn a cent of what he was paid in 2013

        • jjyank

          And you think the MLB would have let that fly? The CBA Tax circumvention would be too obvious.

          • Farewell Mo

            Paying a player what he’s worth is tax circumvention?

            I guess it’s better to through him an extra $6+ million for old times sake.

    • OhioYanks

      Missing one season = broken down? I have no idea what he’ll do next season or if his injuries will linger, but in 2012 he was the 7th most valuable SS in baseball. He’s never had a season below 1.9 fWAR.

  • KeithK

    There appear to be differing opinions about whether this deal hurts or helps the Yankees in regards to the $189M budget. I have to imagine that the Yankees management and lawyers are all over the CBA and have talked to MLB about the implications of the deal. Whatever else Hal may be he’s sharp when it comes to the numbers.

    • OhioYanks

      I have no idea, but Hal is also on record saying in the last couple of weeks that stars sell tickets. Which fits pretty well with the Ichiro re-signing, them going above Cashman’s head in re-signing A-Rod, Jeter’s last deal… They might be very willing to hurt themselves in their pursuit of $189 million in order to retain their biggest star.

      Or it might help their luxury tax situation, I have no idea.

    • Robinson Tilapia

      I don’t think organizations like the Yankees are going to fuck up details like this.

  • Yanks200910

    Guess it does not save them any money at all..

    1:36pm: Joel Sherman of the New York Post reports that the common belief that this deal saves the Yankees from the luxury tax threshold is a misconception. According to Sherman, given the way that the luxury tax is computed, this deal will count more significantly against the luxury tax than Jeter’s player option would have. Had Jeter exercised that option, $10.75MM would have gone against the luxury tax in 2014, says Sherman, but this new deal will count $12.8MM toward the luxury tax

    • I’m a looser baby so why don’t you kill me?

      Joel Sherman and NY Post are not words I usually associate with facts.

      They could be right of course, though I don’t think they are.

    • Robinson Tilapia

      As Mike said, refuted somewhere else. We’ll see. Sherman’s take makes little sense considering the context.

  • 461deep

    Derek came-up in late 95 so 2014 is his 20th year. Nice long career.
    Enjoyed the baseball accounting 101 posts but can’t say I worry about teams finances. Jeter must hit at least .290 as a singles hitter to be of value next year since his speed and defense have dissipated
    quite markedly last year and he will not recover much of either.
    Said previously, sign Beltran for 2 year so he, Tex,

  • 461deep

    cont. Grandy, Cano, Gardner and Soriano will provide a nice line-up. Bonus if Alex plays some.

  • Nathan

    Have there ever been any cases where a player has signed a below market value deal with a team? Not that Jeter seems like the type to do it, it would have been great for him to do a 1 year, $5M deal that would have been really good for the team.

    • UncleArgyle

      Totally agree. There are lots of players who have left money on the table because they value winning and want the team to have the flexibility to improve the roster, especially in the twilight of their careers. Sadly, they’re just don’t play for the New York Yankees.

    • mike

      see, ONeill, Paul…..Papi, Big…..Pedroia, Dustin

    • Robinson Tilapia

      Different sport, but I don’t that John Stockton ever signed something that WASN’T a below market deal.

      Jeter signed what was brought to him.

    • Rupert Pupkin

      FWIW, Lyman Bostock tried to give money back after he had a bad year.

  • Robinson Tilapia

    Not much to see here, although I agree that this sort of move definitely means the team is playing with how to have as much celery cap money available as possible before making moves. Does this mean the plan is set in stone? Of course not. I’d think they would try to follow the plan initially before deciding to blow it up if the players they’d want seem out of reach, not scrap it from the start.

    As for giving a Jeter a raise and all that nonsense, I really couldn’t care less.

  • Frank

    If his 12MM is an increase against the 189MM…I give up trying to understand this organization. I’m sorry, but they need someone new in that organization with a fresh perspective. This would be completely dumb.

  • Dan

    Here’s what I think it is: For the Yankees doing $189, they are assuming that every incentive under a contract is earned for their preseason calculations. If I remember correctly, Jeter could have earned up to $15m on this option for incentives. So the Yankees would have to count the contract as $15m in the offseason to be safe for $189m, regardless of how unlikely it is for Jeter to hit those incentives.

    It’s the same reason it makes financial sense to extend A-Rod if he doesn’t get suspended in exchange for buying out the $6m homerun incentives. Even though he’s probably only going to hit 1 of those, the Yanks would have to count the whole $6m against the contract this year for $189m purposes, so if they could give him an AAV raise of $2m, and buy out the incentives, it makes sense from a $189m perspective.

  • SMK

    “I don’t get this at all.”

    Basically describes most of their moves over the last couple of years.

    From the woeful drafts to the absurd idea that you can go into a season with Cervelli and Stewart as your catching tandem, it’s like they’re going out of their way to screw the pooch.

    With the resources they have at their disposal, they could not have done a worse job. I’m honestly not trying to troll here.

    They entire group deserves an F for their collective effort.

  • JGYank

    Until we are sure how this deal actually counts against their payroll relative to his player option it’s hard to tell if this was a good deal or not. $12M is an overpay for a 40 year old SS with poor defense and injury prone legs but this is Jeter we’re talking about here so it’s obvious why he got that. But even at his age and with his recent injuries if he can come close to repeating 2012 this will be worth it.

    • CashmanNinja


      It’s not like they just gave him a huge extension. It’s a few million more than he would have gotten; plus in the long run it may wind up saving them $$ if the part of the incentives is true. And either way it’s not like they just handed an extension to Vernon Wells or anyone. It’s Derek Jeter. If they’re going to give any player on this team a few million dollars for 1 year then I’d rather it be Jeter than the other guys. I’m sure there’s more to this story that will eventually come out. And even if they do tack on $2 mil onto the $189mil cap…oh well. They’ll save that money elsewhere. Maybe it means they won’t blow that money on a LOOGY and will get double the value in the pen because of that (not overpaying for a guy who can pitch to 1 or 2 batters, as well as not wasting a roster spot). Plus come on…it’s Jeter. It isn’t the end of the world. “Omg, they gave Jeter $2mil extra, oh noes the sky is fallinnng!”. Relax a little, guys.

      • JGYank

        Agree. It’s only a 1 year deal and not a huge overpay. The people criticizing him for not taking a discount need to get real. Why shouldn’t he try to get as much as he can? Not his problem the team is lowering payroll.

        Hopefully he can stay healthy this year. I’m not expecting him to put up big numbers anymore but if he does great, if he doesn’t we weren’t expecting him to anyway and it’s still better than what Nunez or Ryan (offensively) will give you.

  • JB

    i don’t post much but read alot here.. if this hits the new cap negatively, and they gave it to him as “goodwill”, I’d be pretty pissed. He did nothing in ’13 and signed a contract that gave him the opportunity to make $9.5m in ’14. That’s not good enough after last year? he hasn’t made enough money over the last 15 years and needs to squeeze out $2.5m more? he needs new floral arrangements for his dates? this makes him look very greedy in my eyes, and considering the $189M and his 2013 season, i think its pretty ballsy.

    is it somehow offensive for him to be paid $9.5m? is that his take or Hal’s?

    not sure why i’m so upset, but DJ needing another $2.5M just seems very lame..
    no trolling, just miffed.. and just my opinion.

    • Robinson Tilapia

      If that’s true, and there is cap hit, then I’d agree that it’s a pretty fucking stupid way to start the off-season.

      I don’t mind Derek Jeter getting paid $12 million. I don’t mind Derek Jeter getting a small raise after a season in which he played four games because he’s Derek Jeter. I would mind all this happening while the team has spent the past year talking about this nonsense luxury cap number.

    • UncleArgyle

      Well said. If this 189 salary limit is a real thing, why are you giving a 3 million bonus to Jeter, when you could use that money toward extending David Robertson, or Signing David Murphy, or Kuroda, or whatever.

  • Hal Steinbrenner

    I gave Derek Jeter a $2M raise, and all I got was this stupid gift basket.

    • Pinstriped House

      If you got the gift basket, then that’s not ALL you got.

      • BFDeal


  • forensic

    Well, this offseason is off to a rousing start…

    Somehow, this move is both unexpected and yet not surprising all at once.

  • JGYank

    I trust Rosenthal. At least more than Sherman.
    If we didn’t give Jeter more than $9M than he would of just exercised his player option which count as even more than that so it makes sense to give him more than $9M but less than what it actually would of counted for. That way both sides win. Hal didn’t do too bad here.
    And I think you switched the 1 and 3 when you wrote $12.8-31.2M.

  • Chris

    I really want to think that the Yanks would have checked on all this and done the common sense thing here…but my first thought, before hearing it might give a salary break, was “of course they did.” Neither would surprise me in the least, and that isn’t good.

  • Kenny

    My question is…why didn’t Jeter help the team out and take something smaller like $10 million, which would still be a step up from his player option and help the Yankees save even more money?

  • Steven

    I get the fact that by not exercising his option Jeter in effect terminated his pre-existing deal meaning it’s not an extension. My question is does the $12 million include the $3 million buyout? If not what happens to the buyout money?

  • Leg-End

    Spend more to actually save more.


  • David in Cal

    I’m with forensic that the move is unexpected and yet not surprising. IMHO even $9.5 million was more than Jeter is worth today, but that was a sunk cost, due to an earlier, overly generous multi-year contract. I wish the Steinbrenners had allowed Cashman to negotiate the contract. He might have gotten a better deal for the team.

  • Farewell Mo

    Jeter has made over $250 million in his career plus probably another $100 million in endorsements conservatively speaking. You mean to tell me he couldn’t have played next year for $2-3 million so the Yankees could use the savings to put a better team together?

    This better mean the $189 budget has been scraped.

    • Mr. Roth

      It’s not the pile, it’s piling it high.

      Sure, Derek Jeter could afford to play for free next year if he wanted to, but why should he do that? The Yankees have, and continue to, make tons of money off Derek Jeter. So why shouldn’t he continue making tons of money off of them?

      • hogsmog

        I feel like at this stage, Jeter values another ring more than a few million dollars, which is why it’s weird he negotiated for this.

        Though I guess we don’t actually know what went on. If Hal just dropped $12m on his lap from the start, he has no reason not to take it.

    • Nathan

      That was sort of my point that I was trying to make earlier in my post above. One would think that someone in Jeter’s position would sign a team friendly contract, considering their current state and mission to get below the $189M. But I don’t think Jeter is wired that way.

      Just reminds me of Goodfellas…”F you, pay me”.

  • forensic

    And now Chad Jennings says he has a ‘well-placed source’ who says the new contract doesn’t save the Yankees any money.

    Let the fun continue.

    This is like the winter meetings where you get all those irritating conflicting reports of who’s signed, who’s not signed, and who’s interested in who.

    • forensic

      And Maury Brown at Forbes says:

      Major League Baseball informs that changes to the latest labor agreement will not allow a Luxury Tax break for the Yankees with this new deal for Jeter.

      • Mr. Roth

        If this is true and the Yankees made this deal with Jeter under the belief that it would save them luxury tax dollars, it really make me wonder about the guys running the show.

        I’d like to assume that Yankee management would be 100% sure about how the luxury tax calculation works before they’d make this kind of deal.

        • RetroRob

          Or, Hal Steinbrenner told the truth and the deal was not made for luxury tax reasons. Bottom line is Jeter had a three million opt out coming to him. He no doubt said he was going to exercise it with a goal of working out a new deal. The two sides didn’t want to revisit three years back and this is what they came up with. It’s all pretty minor.

          • Mr. Roth

            I’m going to assume you’re right and that luxury taxes were not the motivation here. Otherwise, I’d be pretty disappointed with team executives.

            • RetroRob

              Reading the Forbes article, it seems likely that the main driver for the Yankees was to retain Jeter without having another round of ugly negotations, and more importantly not have Jeter opt out where he would push for perhaps a two-year deal.

              I’m pretty sure they didn’t do the deal with the belief it would lower the luxury tax hit since lawyers for MLB and the Players’ Association were discussing it, meaning it was unclear. The Yankees would have known it was unclear.

              Now there is still something that bothers me. I just don’t understand why the Yankees and Jeter didn’t basically have an agreement on what they were going to do, which is Jeter would opt out and get his $3M payment, ending his three-year deal with the team and thus any tax calculations based on the 2011-13 deal. They then sign a new one-year deal for $9.5M. Jeter gets his $12.5M, the Yankees have a new AAV for Jeter of $9.5.

              • Need Pitching & Hitting

                If he opted out, there would still be a luxury tax hit for the old contract in 2014, because the AAV taxed over 2011-13 was artificially low due to the lower value of the player option dragging it down. The difference between what was paid and what was taxed over the first 3 years would be added to
                luxury tax payroll in the year the player option was to occur – 2014.

        • chris

          par for the course..and absolutely stunning at the same time. This is amazing to me. If Jeter opts out, you work out a deal FOR WHAT HE IS WORTH. That’s on him if he’d like to do something stupid like that and not guarantee himself the already overpaid amount of 9.5. No one else is paying him that.

  • cheddar

    The Forbes article is an interesting read. The earlier version seemed to indicate that if Jeter declined the option, the Yankees would have had to make him a $14.1 million qualifying offer if they wanted to keep him. Under that scenario, I thought the $12 million deal made a good amount of sense.

    If the Forbes update is accurate, I don’t know what to think any more. Jeter in no way deserves more than the option he signed for, IMO, based solely on his inability to take the field last year. If the raise did wind up helping with the luxury tax, I’m all for it. If not, I’m flabbergasted by upper-management’s incompetence.

  • Brian S.

    Front offices value players on their marketability I would imagine. 12 million isn’t bad for an organization that will make millions more from having the face of baseball for a decade on the team.

  • RetroRob

    The Captain’s Blog attempted to break all this down, so head on over there for an interesting read. Yet even he couldn’t answer all the questions in the end.

  • Farewell Mo

    They’ve got to be kidding giving a guy who will be lucky to play 80 games at SS and will be a less than league average DH a contract that counts $19+ million against their budget.

    • RetroRob

      The only way Jeter’s contract will be counted as 19.8 is if he hits all of his performance bonuses, something he never did during the previous contract. Are you really going to be upset if he has a monster year and wins the MVP?

      • Farewell Mo

        You’re missing the point that the Yankees have to assume he’s gonna hit those bonus triggers and put the team together accordingly.

        • RetroRob

          No, I do understand that part. I just don’t agree with it. If I’m in the Yankees shoes, I am quite confident that there is a now zero chance he wins a gold glove with the changes Rawlings is made and I will also take the risk he won’t be winning his first MVP at age 40. The Silver Slugger could happen if he rebounds to his 2012 self. Very unlikely, but I would factor that into the equation.

  • RetroRob

    Scarier number: 25M.

    First off, Sherman’s numbers cannot be trusted. He mentions how the deferred payments from 2011 to 2013 lowered the luxury tax hit on Jeter. really? Every reading of the CBA seems to imply that deferred money is counted for luxury tax calculations. If Sherman whiffs on that simple fact then I am going to have difficulty with all of his numbers.

    Next, back to the scary 25M number. If indeed the Yankees new deal with Jeter means they did not escape the luxury tax calculation from the prior deal, then we start at $15.5m, then we add in the $2.5m that is the increase from the $9.5 to $12m base of the new contract, taking the luxury tax hit to $18m, and now add on if he were to hit all of his bonuses, do that’s a potential hit of $25m.

    Am I right about that? Beats me, but that’s the way I’m reading this.

    • Need Pitching & Hitting

      The deferred money still counts, it just slightly lowers the AAV because if the interest falls below a certain level (in Jeter’s case, it’s 0%), then the present value of the deferred payments is used, instead of the actual $$ amount.
      It’s a small difference, but lowers the original AAV from about $14M AAV to about $13.9M AAV.

      I think the new deal would just be treated as an extension, with the player option being wiped out (neither accepted nor declined).
      If that’s the case, the new AAV would be the $12M of the new deal, plus the deficit in the amount taxed vs. the amount actually earned in the last deal (accounting for present value of the deferred payments).

      Doing it that way, I came up with about $13.2M (not counting potential bonuses), which was one of the numbers being floated around recently.

      I think some of Sherman’s work was actually correct. Some of it just didn’t add up though.

  • Kenny

    How did this help the Yankees in any way?

  • lee

    i’m going to be an optimist here and take this as a sign that Steinbrenner has decided to say screw it to the salary cap and luxury tax, and just do whatever it takes to get the Yankees back to being competitive. say what you will about the front office, they aren’t total idiots — they know full well what the financial implications are of the Jeter contract, far better than any journalist or blogger. and maybe, just maybe, behind Girardi’s agreeing to a new contract was an assurance from Steinbrenner that he was going to do whatever it takes to get the team back on a championship track.

    hey, a guy can dream during the offseason, no?

    • Kenny

      Even if all that was true, it’s the same player (Jeter) either way, except now they are paying him more for no apparent reason.

      • lee

        they are paying him more for a good reason — to get him quietly and quickly signed. regardless of what you think of Jeter as a player, to fail to re-sign him or even just to get in to a long, drawn out pissing contest over the contract would be a total PR nightmare and a major distraction from what really needs to be done. as it is, they’ve got two big contracts behind them just one day in to the post-season, and can now start figuring out how to bring in a strong backup for Jeter, along with all the other holes that need to be filled.

  • Mike

    After his performance this year, Jeter showed he deserved this contract.

  • beachbum

    So this is obviously not a salary cap move. Perhaps this is an “exit” bonus. Yankees agreed to the deal and Jeter agreed (informally) that this will be his last year. Yanks and Jeter both avoid the pain and embarrassment of a forced exit after next year. I have no basis to think this is actually true.

  • fred robbins

    The Jeter signing should prove, without a shadow of doubt, that Yankee Management and Ownership have no desire to spend a few years finding hungry young players with heart and who new young fans can root for. For me, as an older fan, I can no longer root for any Yankee team with this kind of continued short sightedness and disdain for the fans. Other than Money, it is hard to figure out why any young player would even consider signing with a team that has no plan or management with the brain power to put out a championship team