Via MLBTR, the Yankees have contacted Cliff Lee’s agent to let him know that they’ll be in touch with a contract offer soon. At this point in the offseason two years ago, the Yanks had already offered CC Sabathia the largest pitching contract in baseball history, so clearly they’re not being as aggressive with Lee. That doesn’t mean they don’t really really want him though, we all know they do.
Anyway, the process has started.
Via Buster Olney (Insider req’d), the Yankees are expected to make their first offer to Cliff Lee very soon, perhaps within the next 72 hours. Free agency officially opens at 12:01am Sunday morning, so eleven or so hours from now. Anthony McCarron backs Olney’s report up, for what it’s worth.
Unlike CC Sabathia, who the Yanks offered the largest pitching contract in history just as a starting point, the general belief is that they will not pursue Lee as aggressively. That’s not to say they don’t consider him a priority, but they’re just not as desperate as they were two winters ago. They can afford to make an initial offer that other clubs can presumably match, and go from there.
We’ve heard about this one before, and we’ll surely hear plenty about it in the next month-plus. Residents of Texas pay no income tax to the state. The Rangers, therefore, have a competitive advantage. They can offer a player slightly less money than a rival and still have a better overall offer, since the player will not have to deduct those taxes from his paycheck. CNBC’s Darren Rovell breaks down the issue for what certainly won’t be the last time.
Normally this is where I’d blockquote a relevant portion of text and then elaborate, but I’m not sure that’s appropriate here. Rovell gets something wrong early in the article: “So assuming Lee moves residency from Arkansas, which has a top individaul tax rate of seven percent, to somewhere in Texas, he’d save a significant amount of money over living in New York.” The problem with that statement is that baseball players are not taxed based on residency. They are taxed on the location at which they earned their salaries. That doesn’t just include the home state, but all the states they visit throughout the season. It does change the situation a little bit.
Kevin Baxter of the L.A. Times covered the issue last spring in regards to then-Angels pitcher Darren Oliver.
If opening day is the best day of the year for professional athletes, then April 15 — tax day — is probably the worst. Especially now that 20 of the 24 states with franchises in at least one of the four major pro leagues — the NFL, NBA, NHL and Major League Baseball — have laws that require visiting athletes to pay state income tax for each game they play there.
Lee would still pay a lower state income tax as a Texas Ranger, but it’s not to the level Rovells suggests, which is $15.13 million over a five-year span. That changes the result of Rovell’s analysis, which has the Rangers needing to offer $107.2 million against a New York offer of $120 million.
I’m also surprised that Rovell didn’t bring up the endorsement difference. I’m not sure what that difference would be, but I would assume that there are more, and more lucrative, endorsement opportunities in New York. As we saw with Sabathia and Subway, there doesn’t seem to be a waiting period. If a name as big as Lee signs in New York, he’ll probably make endorsement dollars fairly quickly. Endorsements, however, are where residency comes into play. Those are taxed based on your state of residence. But there are a number of states that don’t require residents to pay income tax — including Florida, where Derek Jeter has established residency.
During the negotiations, though, this matter probably won’t matter much. A 2007 study notes that, “Unlike the pre-tax salaries reported in the media, MLB players compare after-tax salaries when considering offers, according to the authors.” In other words, this issue will be out in the open as Lee negotiates with potential suitors. It won’t be something that the Yankees leave out or anything like that.
Given all that we know and have read about this situation, it doesn’t appear as though there is an enormous advantage to living in tax-free Texas. While Lee would pay no state taxes for 81 games, he’d still pay other states’ income taxes for road games. The added endorsement opportunities in New York, then, could cover some, if not all, of the difference. And whatever is not covered will be by the New York checkbook.
I wouldn’t give this issue much more thought going forward.
Mailbag’s back, and we’re not going to make a whole day out of it either. Just a few questions with some rapid fire answers. If you want to send in some questions in the future, just use the Submit A Tip box in the sidebar. I’m thinking every Friday morning is a fine time for the mailbag, no? Anyway, on to the questions …
Den asks: Just a thought. Is it a good idea to get Mo back as a pitching coach instead of a player? I thought that would be a good compromise without losing a ‘face’ of the Yankees. Would that even be possible?
No, give me Mariano Rivera as a pitcher every day of the week, he’ll way more valuable to the Yankees that way. Mo’s a great pitcher, one of the greatest that will ever play, but we have no idea about his ability to coach. If they did that, it would be a move based on sentimentality and not evidence of his ability to run a pitching staff.
If you’re talking about after he retires … still no. I suspect he’s the kind of the guy that you won’t see around the ballpark often once he hands ’em up, just during Spring Training and stuff. But that’s just me.
Sean asks: How well does Montero call games? Are there any reports (scouting or otherwise) on this? If his defense (throwing runners out, blocking balls, etc.) is even at the same level of Posada or Cervelli, how can he not be with the club out of spring training (assuming his bat shows up)?
You don’t hear much about how well (or how poorly) minor league catchers call games because not many do it. A lot of times they’re told to focus on the physical aspects of the game as well as their training, and let the coaches call pitches from the bench. Also, a lot of times the pitcher will be working on something, say a changeup, and he’ll be mandated by the organization to throw X number of those pitches per start. There’s no game calling skill or strategy to that, it’s just a pitch for development’s sake. Outcome is meaningless. Long story short, I know nothing about his skills as a game caller.
Montero could probably break camp with the big league team next year, but I wouldn’t be surprised if they sent him back to Triple-A for a month or two just to keep his service time down. The Yankees have plenty of money, but there are legitimate baseball reasons for Montero to go back down, namely his defense. The service time thing is an added benefit.
Anonymous asks: Who would you take, Wil Myers or Jesus Montero?
Montero, but Myers is awesome. The Royals’ prospect hit .315/.429/.506 with 37 doubles and 14 homers split between High-A and Double-A this year, his age-19 season. He’s just as likely to move out from behind the plate as Montero, probably to the outfield. Montero has more power and is a better pure hitter, but Myers has more plate discipline. They’re both awesome, but I’ll take Hey-Zeus.
AD asks: Any chance that having Lee on the team will help out A.J.? Burnett had his best year in Toronto observing and emulating Halladay’s work habits. A.J. likes Lee…same hometown..and A.J. was inspired to pitch a great critical game 2 in 2009 WS after watching Lee’s shutdown performance against the Yanks in gm 1. Whaddya think?
Eh. It’s all up to Burnett, not the people around him. I mean, yeah, the support system counts, but there’s only so much they can do. He and Lee share an agent and (essentially) a hometown, so maybe it would help more than we realize, but I’m not going to hold my breath. A.J. is what he is at this point of his career.
Anonymous asks: Checkout the numbers: 535 AB, 112 R, 137 H, 40 2B, 1 3B, 29 HR, 104 RBI, .256 AVG. That’s Alex facing a lefty over the last 4 years. I would have thought it would be a lot higher. Any clue why this is?
Yeah, I wish I knew. Here are his wOBA’s vs. LHP since joining the Yankees, starting with 2004 and ending with 2010: .446, .412, .421, .402, .378, .402, .323. His performance really started to suffer in 2008, so perhaps the hip is to blame. Maybe he’s having a tougher time getting to stuff on the outer half, and instead of driving those pitches with authority, he’s tapping them on the ground or popping them up to the outfield. Maybe he’s just getting old, can’t ignore that possibility.
Based on the last few years, even with the bad hip, 2010 looks like a massive outlier, so I’d expect some sort of rebound against southpaws next year. A-Rod’s just too talented to all of a sudden stop hitting a demographic he’s typically annihilated.
Anonymous asks: Who would be a better DH option for next year, between V-Mart, Dunn, and Berkman? Granted that Dunn “doesn’t want” to be a DH, but he will try to be and the Yanks were interested in him during the trade deadline. V-Mart could give Posada a break at catching, and Tex a break at 1B once a week. Despite V-Mart stinks at catching, Cervelli won’t have to catch 100 games like this season. Simply resigning Berkman, and hope that 2010 season is just bad luck.
Of those three, give me Adam Dunn. He could legitimately hit 50 homers in Yankee Stadium and is always an on-base threat. Victor Martinez might be more useful since he could spot start behind the plate and at first, but he’s pretty awful defensively, not much better than Jorge Posada at all. We know all about Berkman, would be nice if he started hitting lefties though.
I don’t think the Yanks will sign a designated hitter this winter, at least not a big money one like those guys. At some point Montero is going to work his way into the lineup, and they’re going to need that DH spot so he and Posada can rotate. Unless someone like Berkman falls into their laps dirt cheap in February, I think you’ll see Posada, A-Rod, Derek Jeter, and Marcus Thames (assuming he re-signs) rotate at DH until Montero forces their hand. If he doesn’t, they’ll probably look for someone at the trade deadline. These kinds of guys are easy to find in July.
Earlier today Joe broke down the negative impact of the failed Cliff Lee trade, and that part is obvious enough. The Yankees lost out on a world class pitcher and ended up falling to Lee and the team that traded for him in the ALCS. We all know the Yanks would have been a considerably better team in 2010 if the trade had gone through, but there’s a chance the Yankees will be better off in the long-run.
The reason they might be better off down the road is quite simple: they get to keep top prospect Jesus Montero. Keeping the other prospects rumored to be involved in the deal – David Adams, Adam Warren, Eduardo Nunez, Zach McAllister, Ivan Nova, and whoever else’s name popped up at one time or another – is nice as well, but Montero’s the real prize. He is not only the team’s best prospect, but also their best offensive prospect since Derek Jeter, and it’s not hyperbole.
While certainly not over-the-hill, the Yankee offense is a bit … experienced, if you catch my drift. Jeter and Alex Rodriguez, arguably the Yanks’ two most important hitters, are 36 and 35-years-old, respectively. Jorge Posada is 39. Mark Teixeira will turn 31 less than two weeks into the 2011 season and Curtis Granderson hits the big three-oh a few weeks before that. Nick Swisher turns 30 next month. Robbie Cano (28) and Brett Gardner (27) will likely be the only regulars under 30 on Opening Day 2011, so clearly the Yankee lineup is going to need an infusion of youth at some point soon.
Montero figures to provide that. The soon-to-be 21-year-old catcher from Venezuela has already spent a full season at the Triple-A level, an age when most American kids are wrapping up their junior year of college. After a slow start (.312 wOBA through June) in 2010 (perhaps you could call it an adjustment period), Montero posted a .433 wOBA over the final two-plus months of the season. He hit 15 homers in 46 games after July 10th, almost matching his 2009 season total of 17 big flies. There’s little doubt that Montero can mash – Jim Callis of Baseball America recently called him the best hitting prospect in all the land – and while there are questions about his ultimate position, that will be nothing more than a formality if the bat lives up to the hype. The Yanks will find a spot for him, they’d have no choice.
It’s not just about pure production either. The Yankees aren’t cheap, with several contracts (Jeter and A-Rod again being the most notable) paying players premium dollars for their decline phases. The Yanks can certainly afford those contracts, but having Montero at a below market rate for six years (three pre-arbitration, three arbitration-eligible) helps offset some of the albatrosses. Those savings and surplus value give Brian Cashman the flexibility to shore up other areas of the team as needed.
Of course Montero isn’t guaranteed to hit or do anything really, which is what makes this so tricky. Lee is as close to a sure thing as there is in this game right now, prospects are just rolls of the dice. Montero is an elite offensive prospect, something the Yanks desperately need, and they’ll come out smelling like roses if he hits and they manage to sign Lee as a free agent this offseason. That’s far from a given, but considering the current construction of the Yankee roster, it’s easy to make a case that they’re better off keeping six years of Jesus Montero instead of trading him for four months of Cliff Lee.
Having Montero around is nothing more than a minor comfort as we watch Lee and Rangers compete in the World Series, but the kid has the potential to be a core piece in several future contending teams, and that’s what the Yankees are all about. Winning now, and winning every year.
They couldn’t have known it would happen at the time, but they had to know it was a possibility. When the Yankees found out that Seattle would send Cliff Lee to Texas rather than New York, the thought of facing Lee in the playoffs had to cross their minds. By that point, though, it was too late. The process was already far enough along that we could have called it a done deal. Cliff Lee was heading to Arlington, while Seattle would receive a package featuring 2008 first rounder Justin Smoak. The Yanks had lost out.
That day represented perhaps the most exciting and disappointing one of the regular season. When I went to bed on July 8 the only thought of Lee was that the Yankees were to face him the next evening. When I woke up on the 9th I realized that he wouldn’t. It sounded pretty certain that the Yankees and Mariners would finalize a swap sometime during the day. Jesus Montero, David Adams, and Zach McAllister would go to the Mariners, and the Yankees would add a second lefty ace to the staff. World Series, here we come.
A few hours later we would learn that the trade fell apart. The Mariners didn’t like the medicals on David Adams. At the time it sounded like an excuse to bring other teams into the bidding, but as we found out later Adams did have significant ankle issues. The Mariners, so the story goes, asked the Yankees to add Ivan Nova or Eduardo Nunez. The Yankees declined. The Yankees suggested Adam Warren. The Mariners weren’t interested — though perhaps by that time their disinterest was due to Texas’ new offer, which included Smoak. Not long after we heard that the deal with the Yankees fell apart, we heard that Cliff Lee would be Arlington-bound.
The reaction to this non-trade has two strong sides. One lamented the missed opportunity, because of its implications for the 2010 team. The other celebrated it, because it meant holding onto the team’s prospect while retaining the ability to sign Lee during the off-season. Mike will cover the latter point shortly. This will focus only on the lamentation.
At the time
At the time of the non-deal, the Yankees had five starting pitchers. CC Sabathia had been his regular self for most of the season and Andy Pettitte was keeping runs off the board, but beyond them there were a number of questions. Javy Vazquez had recovered from a poor start, though he still seemed to be the odd man out. A.J. Burnett had just come off what was probably the worst month of his career, but the Yanks couldn’t move him. Phil Hughes had struggled, but to move him would be to further stunt his development. They wanted him to get a full year in the rotation. Something would have to change, but for Cliff Lee that’s not much of an issue. You move mountains to make room for Cliff Lee.
We knew then what Lee would bring to the Yankees. He would turn the starting staff into the best in the AL, perhaps the best in the majors. It already ranked among the top, but there were still weaknesses, described above. If Javy broke down again, if Burnett didn’t fully recover, if Hughes ran into problems as he entered uncharted territory — all of these what-ifs had to weigh on the front office’s mind. Acquiring Lee would render these questions less meaningful. The Yanks would then have six starters, so if something went wrong they would have a fill-in ready to go.
The Yankees also had to know how acquiring Lee would make it easier to re-sign him during the off-season. This isn’t scientific fact, of course, but rather an intuitive connection. If the Yankees traded for Lee and then won a World Series with him, how could he then turn down the sack of money the Yankees would hand him? If he went elsewhere and won a World Series there, well, maybe he’d be more inclined to take a bit less to stay in place where he has experienced the ultimate success. The Yankees’ willingness to pay twice for a player in this instance suggests that they thought along these lines.
In hindsight
The at-the-time case seems easy enough. Adding Cliff Lee would have greatly increased the Yankees chances of winning the World Series. They would have received a proven veteran in exchange for a player whose career is nothing but potential right now. Little did we know at the time that the hindsight argument would be even stronger.
The Yankees lost the ALCS because they couldn’t hit a lick, but the pitching staff didn’t help matters. CC Sabathia got knocked around in Game 1, and Phil Hughes got hit harder in Game 2. A.J. Burnett has a solid Game 4 until the Molina homer, and then Hughes was again shaky in Game 6. Imagine the staff had they added Lee.
Sabathia still would have gone Game 1, and perhaps it would have unfolded similarly. Lee taking Hughes’s place would have been an enormous upgrade. That would have pushed Hughes to Game 4, at which time the Yankees might have been in a better position. That’s not only because Lee likely would have been more effective in Game 2, but because the Yankees might not have lost Game 3, because Lee wouldn’t have been pitching for the Rangers.
That brings up another hindsight point. The Rangers wouldn’t have been nearly as strong a playoff team without Lee. They almost certainly would have made the playoffs without him — at the time they acquired him they were already running away with the division. But once they got to the playoffs they wouldn’t have been as well prepared.
In fact, I’d bet that had the Yankees acquired Lee, they would have won the AL East. That would have set them up against a Lee-less Texas in the first round; that would have been something of a mismatch. Sabathia-Lee-Pettitte, and then Hughes if necessary. They would have faced Wilson-Lewis-Hunter, though missing out on Lee might have motivated Texas to work out something for Roy Oswalt. That would have been a bit difficult, though, given Texas’s financial situation at the time. Getting approval for $3 million or whatever they ended up paying Lee is one thing; getting permission for the $10+ million they’d have to pay Oswalt over the next two years is quite another.
The benefits, as you can see, would have cascaded. The Yankees would not only strengthen their own team with Lee, but would have left competitors scrambling for another solution. That would have left the Yankees in the best possible position.
In terms of how it would have helped the 2010 team, missing out on Lee is one thing that went terribly wrong. They would have been sacrificing a potential piece of their future, but they would have added a Top 3 pitcher for 2010, and then given themselves a better chance to re-sign him during the off-season. After missing out, the Yankees just have to hope they can convince Lee to come to New York in the same manner they convinced CC Sabathia.
Joe Girardi and Brian Cashman held their annual end-of-the-season press conferences today, so as you’d expect there was plenty of news to come out of Yankee Stadium this afternoon. We’ll surely break everything down in detail throughout the offseason, but let’s round it all up here first and digest everything before moving on.
Obviously, the biggest news to come out of the presser was the announcement that pitching coach Dave Eiland will not return in 2011, but we covered that already. Ditto Andy Pettitte’s various injuries. Everything else you see below comes from the various beat writers, who as usual did a bang-up job today. Seriously, we’re lucky to have such a great crew covering the team full-time. Those guys deserve their own appreciation thread. Anyway, on to the chatter.