The Value of Jeter, Part 2

Spring Training is underway now, which means fans and the media are gearing up for the 2010 MLB season. This season brings a lot of things: the return of Mark McGwire, another chance for the Mets’ doctors to practice, the long-awaited absence of Chip Caray. It also brings the end of Derek Jeter’s 10-year, $189 million contract.

Yesterday, Jeter addressed these concerns to the media for the first, and he says only, time this year. He didn’t really say anything new: He wants to stay with the Yankees, he’s always wanted to stay with the Yankees, he won’t talk about it again until the end of the season.

All indications, from both Jeter and Yankees GM Brian Cashman, are that Jeter will re-sign, and, as I’ve said before, he’ll probably do it quickly, since he is worth more to the Yankees than to any other team. But his new contract won’t be settled for at least seven months.

Why? Because the Yankees have a policy of not negotiating new contracts until a player’s old contract has ended.* In general, this policy makes sense, since it obviates any awkward mid-season negotiations and allows the team to factor in the production of the last full season when coming up with a contract offer. And since the Yankees have the resources to outspend any other bidder if they so choose, then the risk of losing a player on the open market is not that high. In Jeter’s case, though, this policy is probably a mistake.

*It’s worth pointing out that the Yankees were willing to violate this policy in 2007, when Alex Rodriguez was considering opting out of his contract.

In Breaks of the Game, David Halberstam mentions that Larry Weinberg, the original owner of the Portland Trail Blazers, refused to renegotiate with players under contract, even if they were worth more than a rookie contract entitled them to. His logic made some sense: If a player plays poorly, Weinberg doesn’t ask for his money back, so why should he feel obligated to pay a player more simply because he plays better? Weinberg is right. In general, there is a mistaken belief that owners “owe” something to players: The Packers “owe” it to Brett Favre to let him come back after retiring; the Red Sox “owe” new contracts to the members of the 2004 team; the 76ers “owe” it to Allen Iverson to let him come back. This idea sentimentalizes what is essentially an employer-employee relationship.

Nevertheless, Derek Jeter is the team captain, and he has been the face of the Yankees for 15 years now. The Yankees don’t owe him anything (they did, after all, give him $189 million), but he probably transcends some “policy.” More importantly, it makes sense for the Yankees to negotiate now. I’m optimistic that the situation will resolve itself quickly, but suppose it doesn’t. Suppose Jeter overestimates the market for himself like Johnny Damon did this year, or he feels insulted by the Yankees initial offer. Suppose a team like the Nationals or the Orioles is willing to overpay for a marketable star and some credibility. The two sides could end up stuck in a drawn-out process that dominates the whole off-season.

Meanwhile, the free-agent class of next year will likely be much more active than this year’s was. The market could potentially include Mariano Rivera, Carl Crawford, Manny Ramirez, Josh Beckett, Rich Harden, Cliff Lee, and, the granddaddy of them all, Joe Mauer. The Yankees cannot afford to be stuck on negotiations with Jeter with so many other great free agents out there.

Similarly, negotiating now, when there are no other parties, is to the Yankees advantage. Jeter has said he doesn’t want to be a free agent, so he’s almost certainly open to starting the process. If you can get this done now, then why not do it?

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4 responses to this post.

  1. Posted by Tim on February 26, 2010 at 2:09 AM

    I’m still not sure Jeter is “worth more to the Yankees than to any other team.” Wouldn’t Jeter actually be more valuable to a team that isn’t thriving in either the standings or the cash register? A team like Kansas City (who really needs a SS)–or Baltimore or Washington, as you mention–signing Jeter buys itself instant credibility the same way the Mets did with Pedro Martinez in 2005. It would sell a tremendous amount of season tickets, generate excitement, and help lure other free agents who may for the first time think, “Hey, the Royals are really trying.” The one move can help spark a return from irrelevance.

    The Yankees will never be irrelevant, though. If somehow they don’t resign Jeter, it’s not like fans will stop coming to their games or stop paying extra to get the YES Network. NYY would still be a playoff contender (depending on who they replaced Jeter with). Would the Yankees really lose as much as the Royals would gain in this scenario?

    Bonus hypothetical: You have $200 million to spend this off-season; do you use most of it on Jeter and some spare parts, or use it all to try to lure Joe Mauer and let Jeter walk?

    Reply

  2. Posted by Dan on February 26, 2010 at 7:35 AM

    Tim, that question is a fallacy. The Yankees will obviously both sign Jeter and try to lure Mauer. Because they don’t have 200 million to spend only; they have 200 or more to spend on each.

    Reply

  3. […] As for baseball, ESPN’s Tom Friend dives into the life and death of Eric Show–25 years after he gave up Pete Rose’s record-breaking hit. And friend of the blog Ben Cohen over at Deadspin analyzes Derek Jeter from the Yankee fan’s perspective–something John S has done…twice. […]

    Reply

  4. […] This has been discussed so much (including by me, twice), but I really don’t think there’s much to do but wait and see. The Yankees are certainly going […]

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