The Problems With Jeter's New Deal

(Courtesy of the AP)

I don't think there are many out there who thought Derek Jeter wouldn't be playing for the Yankees in 2014.  I also don't think there are many out there, myself totally and completely included, who thought Jeter would be playing for the Yankees on a new, higher-dollar contract in 2014.  The announcement of Jeter's new 1-year/$12 million yesterday afternoon was confusing to the say the least, as there seemed to be little real reason for it to happen.  The subsequent discussion and differing information on the luxury tax implications of the new deal made the situation even more confusing, and the latest reports on those figures make the deal look like a poor decision on the part of the Yankees.

Regardless of average annual values or luxury tax implications, the move to re-sign Jeter to this new deal wasn't a good one yesterday and still isn't today.  It has nothing to do with money and nothing to do with Jeter's production potential next season.  Once again, what makes this move a bad one is what it says about the direction the Yankee franchise is taking.


Or rather not taking.  As a team that's trying to get out from under the burden of its past mistakes and start focusing on how to build a better future for its next generation of players, the Yankees once again anchored themselves to the last, aging generation by giving Jeter more money than they needed to.  Yes he's an icon in Yankee Stadium and yes people come out to The Stadium to see him, but there was no reason to give Jeter a raise and pay him $12 million next season.  If he didn't exercise his player option, there wasn't a team out there who was going to give him half of that, let alone the $9.5 million he would have gotten if he took the player option.  Instead of making smart business and baseball decisions to move forward in a positive direction, the Yankees essentially decided to put themselves in neutral again and safely fall back on the "Core Four" legacy.

Second, and perhaps more importantly, this was another move made without the input of Brian Cashman and the baseball people in the front office.  Very early when the story was breaking yesterday, it came out that Jeter and Hal Steinbrenner worked this deal out together.  In a more detailed story last night, Mark Feinsand reported that it was Jeter and his agent who approached Hal because they weren't happy with the idea of Jeter taking a $7.5 million pay cut in 2014.  It's been proven multiple times in the past that when the Hal Steinbrenners and Randy Levines of the world get to make decisions without the input of Cash and his baseball people, things usually don't work out for the best.  It already looks like that's what's going to happen here.

And as for the luxury tax implications, it would be bad enough on its own if this new deal worked against the Yankees in their battle to get under the luxury tax threshold next season.  After some back and forth on the issue throughout the afternoon yesterday, Joel Sherman finally appeared to get it right with this report last night that confirms just that.  Jeter's new contract will actually cost the Yankees a little over $2 million more against the threshold than his option would have.

What makes that fact a million times worse is the multiple reports that the luxury tax concerns didn't even factor into the decision to make the new deal.  When Jeter and Casey Close came to Hal with their concerns, his only counter-concern was to make sure Jeter was happy and avoid any potential dust-ups in the media like Jeter and Cash had during his last contract negotiation.  The man who's supposedly extremely concerned about the business and numbers side of the Yankee organization made a decision that not only didn't make a lot of baseball sense and didn't take into account what the baseball people would have thought about it, he didn't even consider the business implications of the deal and if they were helpful or harmful to his luxury tax avoidance mandate goal.

I hope that some more details come out on this story that connect Cash and even Joe to the decision, so at least I can have the comfort of knowing somebody with a baseball mind knew about this.  If it turns out that this was really just Hal caving to the potential pressure of Jeter not exercising his option and electing for free agency, that's a really bad sign.  It shows once again how far behind the times the Yankee front office is when it comes to intelligently operating a baseball franchise and inspires little confidence that they're capable of building a successful team on a more modest spending plan moving forward.