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New York Yankees

Illusory Economics

In professional baseball we have all just witnessed a big bang-like collision between a false claim to a non-existing economic crisis and the wealthiest sports franchise on the face of the planet. The impact has birthed the unprecedented humiliation of the one of the game’s all-time greats. Derek Jeter, unfortunately, is the initial example of what it means get robbed in free agency in the 21st century.

Heading into the 2010 season, it felt like an opening day of old for the Yankees organization. The Bombers had finally gotten over the hump, laying claim as king of the hill by winning their 28th World Series Championship in 2009 and were ready to begin their rampant march to repeat. However, there was one big elephant in the room for New York, but in April it may have seemed to most as only a mouse. Clearly the elephant was Derek Jeter’s contract status after 2010. Jeter would be playing the final season of his ten-year, $180 million contract and would likely be demanding a hefty price for what would appear to be his final contract as a New York Yankee.

It seems like business as usual, right? Most believed – at the time – that the upcoming off season for Jeter and the Yankees had already written itself: Brain Cashman signs Derek to whatever the shortstop wants and the Yankee captain goes riding off into the sunset a rich man with Minka Kelly by his side and retires as one of the greatest to ever play the game.

Not so fast. Throughout the ’10 season, Jeter underachieved expectations as he posted his lowest offensive – and defensive – statistics since breaking into the MLB in 1996. In 2009, Jeter’s numbers look like this: .334 AVG. 18 HR 66 RBI .406 OBP. In 2010 Jeter posted a .270 AVG. 10 HR 66 RBI .340 OBP. What a difference a year makes.

Now, just two months after Cliff Lee and the Texas Rangers ousted the New York Yankees in the ALCS, the Yankees’ front office have low-balled their captain in what is clearly a way of allocating funds in attempts to assure they sign the left-handed pitcher that knocked them out of the playoffs.

Most believed that the negotiations between the Jeter camp and the Yankees’ brass would be an elongated process. However, the long-time Yankees captain and his agent Casey Close ended the heated, headline-hogging negotiations by agreeing to a three-year, $51 million contract extension on December 6th. It’s tough to see the pinching of pennies administered to a Yankee memorably remarked as one of the most respected, talented and beloved players to ever step into the House that Ruth Built. In fact, seeing Jeter swallow his pride is like driving by a car wreck: you just can’t help but look and feel bad.

When blending the ideas of economics and the New York Yankees together, most realists would put faith in the claim that the two share no connection. Thanks to the late, shrewd-as a-loan-shark George Steinbrenner the Yankee franchise has evolved into a multi billion-dollar-conglomerate. It’s one of the few corporations that can defy any and all monetary restrictions, restrictions that ground the vast majority of businesses in the real world. They get what they want, when they want, at whatever cost.

Heading into the 2010 MLB offseason, Yankees General Manager Brian Cashman came out and publicly stated that he wanted to trim down his 2010 payroll, which, right now, is just south of $200 million. He mentioned being more responsible with funds and – I’m paraphrasing here – not spend like a drunken sailor. As it would appear with Derek Jeter’s contract negotiation, Cashman stood by his words, when in actuality, the Yankees ownership just put up the smokescreen cleverly dubbed “fiscally responsible”. I call it, “illusory economics”.

While Jeter posted his second worst statistical season, his career numbers alone in New York should speak for itself. One would think Jeter, after all he’s done for the Yankees organization, would get a free pass on a down year, and get the last big contract of his career. Even if 2010 for Jeter was more of an aberration than an omen, as mentioned before, Jeter is important, no, irreplaceable to the Yankees. The front office knew that, but with his terrible season in 2010, Steinbrenner, Inc. had the shortstop caught between a rock and hard place.

Brian Cashman drew the line with Jeter refusing to throw monstrous figures at the Yankees’ shortstop early in negotiations. They even challenged Derek and his agent to go test the waters and see what was out on the open market. Clearly, the Yankees’ brass was confident that they would be able to get him for cents on the dollar and dedicate the non-disposed cash towards their latest picture bride, Cliff Lee.

If the New York front office did concede and pay Jeter what he’d asked for, Cashman and the Steinbrenners would clearly be showing their gratitude for what the captain has done for the franchise over the course of his career. He’s never marred the organization and has never left a mess for the Yankees’ public relations crisis team to clean up – ah hem, A-Rod. To some, the front office might have been viewed as softies by giving in to the demands of a shortstop on the wrong side of 30. But to others, they would’ve been viewed the front office as an ownership spending money wisely on a guy that has coolly navigated through the right paths his whole career and still had a few solid seasons left in his bat.

Sure, a large contract would be risking somewhere in the realm of $20-plus million a season on an aging veteran shortstop whose defensive range has diminished, but did people honestly think Derek Jeter would have another year at the plate like he did in 2010? He’s just two years removed from one of his best seasons statistically.

Instead, the Yankees by not signing Jeter to the money he and his agent requested was a blatant slap in the face. The saying that was put out by the press was, “Derek Jeter needed the Yankees’ brand, not the other way around.” This is true and the Yankees knew that and took full advantage. The idea of Jeter leaving New York must have crept into the minds of Brian Cashman and the Steinbrenners, which, in turn, would have caused a severe backlash among fans, inevitably dwindling ticket sales.

But, even knowing in the back of their minds that their new gem of a stadium in the Bronx had such trouble selling out its overly priced seats in 2010 and losing their poster boy could further removes rear-ends from the seats at the Stadium, the Yankees took a bold gamble and went through an didn’t budge from their cut-rate offer to Jeter.

Was the risk of losing Jeter and the distinct possibility that ticket sales -a major revenue stream – might tank even worse than in 2010 worth it? In retrospect, yes it was worth it. The front office clearly knew that Jeter’s frailty ran right back to the quote, “Jeter needed the Yankees, more than the Yankees needed him.” Can you picture him playing anywhere else?

The Yankees big risk paid off in more ways than one. First, the face of their franchise was locked in for three years on short money and second, there’s still plenty of cash left to spend.

Not to rub salt in the wounds of the Yankees’ captain, but coincidently on the same day Jeter’s reported contract extension with New York was leaked to the media, other free agents signed for big money. Jayson Werth inked a seven-year, $126 million deal with the Washington Nationals and the Boston Red Sox acquired Adrian Gonzalez from the San Diego Padres on a structured seven-year deal worth $154 million.

Clearly no team is taking a financially responsible route in the MLB, so why would the Yankees claim that they’d be tightening the belt this offseason? The Nationals – a losing franchise – grossly overpaid Werth who only hit .184 with runners in scoring position and has never amassed 100 RBI in his career. But, since Jeter, who is paid to get on base, turned in a less-than-average OBP (.340) – and other statistics for that matter, – he is the first to take the bullet on a false claim and lose out on big money.

Clearly, the Yankees got their way once again. The only difference being it was at the expense of their most beloved player. And though both sides came to an agreement, rest assured that making Jeter an example of what it means to “cut costs” has tarnished any relationship that was once existed.

But the fact of the matter remains that the Yankees truly don’t care about thinning out Jeter’s contract, especially with a team that is battling age. What they do care about is their next acquisition and according to most MLB sources their primary targets are Cliff Lee and/or Carl Crawford, the two most expensive free agents on the market.

And while most people never put too much stock into the Yankees’ claim of fiscal responsibility, Derek Jeter was the unfortunate victim of the franchise’s adherence to false advertising. It’s tough to imagine that the stingy contract given to Jeter truly portends the dawning of a new financially friendly era in New York. Remember it’s illusory economics.

One reply on “Illusory Economics”

Great article…I definitely think Jeter should have literally gotten whatever he asked for from the Yanks’ front office…the thing that called me when they were in negotiations on re-signing Mo and DJ was that Hank Steinbrenner said something along the lines of: “We don’t owe them anything.” Which is the most ridiculous thing I’ve heard in a while…

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