Hot Stove Coal: Jeter and the Yankees are Taking a While...But That's OK

One of my favorite shows on television is The Office but there are episodes where Michael Scott's interactions with others get so painful to watch that you almost want to turn the channel. The Derek Jeter negotiations are on the verge of that--but aren't there yet. Like Dunder Mifflin and Michael Scott, you feel like the current version of the Yankees and Derek Jeter will always be together, when, in fact, both of those pairings will separate at some point in the not-so-distant future. But in the meantime, Jeter and the Yankees have waged a very public, sometimes uncomfortably messy negotiations for Derek Jeter's last contract. In the end, though, I think that will be okay for both the Yankees and Jeter.

Derek Jeter and the Yankees need each other (MSNBC)

Let's test your Yankees free agent memory: Do you recall the Yankees telling Bernie Williams to hit the road? Do you remember when the Yankees refused to give Andy Pettitte a large guaranteed deal and instead made him play for an average salary with incentives? How about when Jorge Posada and the Yankees had very public negotiations with Jorge threatening to bolt for Flushing? Maybe you'll recall letting World Series "heroes" Hideki Matsui and Johnny Damon walk? All of these happened in the past 5 years and yet the Derek Jeter negotiations are seen by some in the media and Yankee fandom as "unprecedented", when, in fact, the Yankees have already had these types of public negotiations with Derek Jeter, himself, in the past (sometimes those were pretty messy, too).

The Yankees used to operate differently. With George Steinbrenner in charge the Yankees doled out multi-year contracts like they were Halloween candy, never worrying about the consequences or a budget. But after getting bogged down with the Carl Pavanos and Jaret Wrights and, now, A.J. Burnetts of the baseball world, the Yankees are trying not to make the same mistake again. The Yankees' "core" is getting to the point where most teams would send them out to pasture with a shotgun in the pickup but Pettitte, Jeter, Rivera and even Posada can all serve a purpose to a Yankees team trying to win in 2011. They all have meant a lot to the Yankees teams of the past and have been well-compensated for that, but can still contribute to a winning team in '11.

But it doesn't mean that they need to be paid whatever they want. Of all the Yankees' bad contracts of the past dozen years, the worst one was the Alex Rodriguez contract. It is not that I don't believe A-Rod will earn his money for quite a bit of the contract but it went back to the "old Yankee way" of bidding against themselves for free agents. It's fine to do that when you need to overpay a guy like CC Sabathia to don Pinstripes, but A-Rod needed the Yankees as much as the Yankees needed A-Rod that off-season and yet the Yankees gave A-Rod what he wanted.

They're trying not to make the same mistake again and I applaud them for that. The Yankees don't operate like most teams in a lot of ways, but one of the fundamental differences is their 40% luxury tax. For every dollar they are over the luxury tax threshold they essentially pay $1.40. According to Wikipedia, the cap limit for 2011 is $178 M which will hit the Yankees again. So while $5 M more to Derek Jeter a year may not sound like much among friends, it's actually $7 M in paid out money by the Yankees. So a 3-year, $60 M deal is actually 3 years, $84 M. I know that Jeter's whole salary isn't what's putting the Yankees over, but it's worth taking into account. Even if you spread out a $25 M tax payment over a $200 M payroll, it would make Jeter's 3-year, $60 M contract becomes 3-year, $67.5 M (which is $22.5 M per year or $7.5 M more per year than the initial offer).

That's not to say the Yankees shouldn't increase their offer to Jeter (and recent accounts say they will). Staying stubborn on their initial offer is not a good PR move and it doesn't help negotiations (neither does leaking this "reality potion" nonsense though it does make parity songs so much more fun). Troy Tulowitzki, a guy who idolized Jeter growing up and wears his #2, just got a monster deal as a shortstop and Derek Jeter will get paid. I've always said a 3-year deal for somewhere in the range of $17-$18 M a season with some sort of vesting or mutual option for a 4th year certainly makes sense (or talk to the Steinbros about a stake in YES). And the general public agrees with me here. But while it was OK to see Bernie Williams and Jorge Posada sort of fade out of stardom, it will be very painful if the Yankees give Jeter a 5-year deal and have to watch him struggle to run down to first base 4 1/2 years from now (and he will struggle).

And that's the biggest issue for both Jeter and Rivera (whose negotiations seem to be going a lot more smoothly despite initial reports to the contrary): making sure they have a natural, graceful exit from the Yankees. Paul O'Neill left the Yankees as their starting right fielder and with a stadium full of playoff fans chanting his name over and over until he teared up. Bernie Williams was not guaranteed a roster spot and it's taken a few years to mend that bridge. The latter can't happen to Jeter and Mo and the Yankees need to be very cautious in these negotiations to make sure they hedge for that.

But Derek Jeter, in the end, isn't going anywhere, though it's fun to imagine the possibilities (H/T to Adam for that awesome last link) and think about Plan B (which is really not so bad when you think about Nunez and the cost savings being dispersed to other areas in the next three years). I'm about 99.9% sure of that. The Red Sox have Jed Lowrie and real needs at catcher and in the outfield. The Mets have Jose Reyes and David Wright. The Dodgers just signed Juan Uribe which gives them two shortstops. The Giants just signed Miguel Tejada. The only two teams who could probably even afford to give Jeter a 1-year, $22.5 M deal would be the Tigers (who just signed Victor Martinez and have many other holes to fill) and the Angels (who need Carl Crawford much more than they need Derek Jeter). And, the last time I checked $45 M is still double $22.5 M. So if Derek Jeter is looking for money, he will stay a Yankee.

But Jeter needs to come back with a more reasonable counteroffer to the Yankees. The "Comfortable Movie Quality" of these negotiations have gone a bit out of control and some of Jeter's best work is putting a positive spin on a bad situation. Having negotiations when neither party is in the same ballpark is really bad. Jeter needs to understand that this is a business (and he is always the one spouting quotes that says he does understand it) and that this predicament he is in was pretty predictable. The whole "Jeter contributes $XXX to The Yankee Brand" was total nonsense and the truth is that there will be some hurt fans if Jeter leaves but the Yankees will get on without him. Jeter, though, needs the Yankees a lot more. The offer on the table shouldn't be seen as "insulting" or "lowball". True, in an ideal world Derek Jeter should be making more than A.J. Burnett ($16.5 M) but Jeter's offers need to move out of fantasy land before we talk about "shoulds". 

So make that the starting point and move from there. Have Brian Cashman dress up as an elf and rappel down from the top of Derek Jeter's house on Christmas with a bale full of $17 or $18 M a year and whisper sweet nothings in Derek's ear about how they need El Capitan back and how important he is to the team and the clubhouse and intangibles. And Derek Jeter needs to turn around say how motivated he is now to prove that last year is a fluke and he's willing to do 3 years and $18 M per...but he needs a vesting option for the 4th year that will vest if he finishes in the Top 5 in MVP voting or the Batting Title in one of the next three years--that's how confident he is in his ability to produce. He'll tell them how he's not going to take anything that happened to heart and then hold a press conference where he starts off with something like "you all really thought I wouldn't be back?"

Then watch Jeter go out and win his first batting title next season (how amazing is that? Jeter has only led the American League in hits once), become the first Yankee ever to get his 3000th hit in Pinstripes, and lock in that 4th year as he moves up the all-time hit list (he's at 36th now--100 hits gets him to 22nd, 200 to 18th, 300 to 13th, 400 to 8th, 500 to 6th--so he has a very legitimate shot at making it to 6th all-time). Derek Jeter needs the Yankees and the Yankees need Derek Jeter. It's OK for the Yankees to take a while to make sure they don't continue to bid against themselves for his deal, but eventually both sides need to reach across the aisle and settle on something fair for one of the Yankees greatest stars and one of the game's greatest ambassadors.