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Saturday, November 2, 2013

Will the Yankees save money by paying Derek Jeter more in 2014 than required?

Derek Jeter agreed to a $12 million deal for 2014.  My reaction was: what!?  I knew that the Yankees were obliged to pay Jeter much less.  I thought it was $8 million but the report I read yesterday indicated $9.5 million.


$8M Player Option, $3M Buyout 2014 option may increase to $17M based on points earned for Gold Glove, Silver Slugger, LCS MVP, WS MVP or top 6 in AL MVP

Either way it would have been a lot less than Jeter will get .  That extra $2.5 or $4 million could be used to pay five or eight rookies, assuming that the Yankees have that many minor league players worthy of becoming rookies in 2014, something unlikely based on the lack of help that the Yankees could find for their many injured veterans in 2013.  It could also pay for a real live veteran or two.

So why would the Yankees do it?  In 2013 Jeter was paid about one million dollars for each of the 17 games in which he appeared.  Why overpay Jeter in 2014 when he did almost nothing for the team in 2013 but received $17,000,000?

Yankees Re-Sign Jeter for One Year at $12 Million
Published: November 1, 2013  The New York Times

Next June he will turn 40, and many people wonder if he will ever again be an impact player. The Yankees do not appear to be among those who doubt him. The team demonstrated faith in Jeter on Friday when it gave him more money than it was required to, signing him to a one-year, $12 million contract, essentially giving an extra $2.5 million as a reward for everything he has been and done for the team.

“It’s a mutual respect factor,” General Manager Brian Cashman said...

Jeter held a 2014 player option for one year at $9.5 million and could have picked it up or opted for free agency. Given his difficult 2013 season and his overwhelming desire to remain with the Yankees, free agency was a remote chance, and the Yankees could have just waited for Jeter to pick up the option.

But the team wanted to show that it still had confidence in its shortstop and captain ...

The Yankees, who have set a goal of keeping their payroll below the luxury-tax threshold of $189 million in 2014, could face a slight increase or a slight decrease in their luxury-tax burden, depending on whether the new deal is considered part of the old contract or a new one. That matter will be resolved later...

Also, by paying him more than some veteran shortstops in the American League East — Stephen Drew of the champion Red Sox signed a one-year, $9.5 million contract last year, and J. J. Hardy of the Orioles made $7 million last season — the Yankees sent a message to Jeter, his teammates, the fans and other teams that they still believe he can do the job.

Note: Drew was born March 16, 1983; 2013 OPS+ 111.  Hardy was born August 19, 1982; 2013 OPS+ 97.  Jeter was born June 26, 1974.

Wow.  What the heck?  $12,000,000 to express respect and confidence?  Wow.  And that's on top of the $17,000,000 Jeter received in 2013.  And the Yankees "luxury-tax burden ... will be resolved later"?  It's difficult to believe that the Yankees would throw around millions of dollars so carelessly.  I realize that it's a small percentage of the Yankees 2013 payroll of $246 million (the higher over payment would be 1.6%) but it's still millions of dollars.  How many Yankee fans make a million dollars in their lives?

Jeter's total according to baseball-reference.com: "Career to date (may be incomplete) $253,159,364".  Let's round that to say that Derek Jeter has been paid a quarter of a billion dollars to play baseball for the New York Yankees.

For his career Jeter has already been paid more than the entire 2013 Yankee payroll, including Jeter himself.  Here are the top three 2013 team payrolls:
- Dodgers $256 million
- Yankees $246 million
- Red Sox $177 million.

The Yankees $189 million objective for 2014 would still leave the Yankees second only to the Dodgers.

My friend Eric Weiss wrote this to me about the Jeter signing:

Good deal for both sides. The Yankees actually save money on the luxury tax threshold. Under the $9.5M player option, the AAV (approximate average value, I think) of Jeter’s prior contract was $14.5 million, and that would have counted toward the luxury tax. By declining the option and signing for $12M, Jeter gets more money and the Yankees save $2.5M toward the luxury tax threshold.
(this was taken from another website, it's not mine)
Yeesh.  Maybe we should change to the Bronx Bookkeepers instead of the Bronx Bombers.  Like I said, Yankees may just (lead the ) league the league in accounting.

A depressing thought in this depressing time of reflection following yet another championship for the Evil Empire of the North.  I wonder if  Jeter's "approximate average value" will be reflected on the field in 2014.

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