Everyone seems aghast at how ugly and drawn-out the negotiations have become between Derek Jeter and the Yankees. I really didn’t expect such a public display of hardball, especially by the Yankees brass. But I can’t say I’m shocked. Jeter is really unlike any free agent in baseball history. Maybe in sports history. And that creates a formula for disharmony and acrimony. I have little doubt that the Yankees and Jeter will get the deal done. They need each other too much. But at what price?
What makes the Jeter scenario so unique is that you have a 37-year-old shortstop who may have seen his last days as a bona fide All-Star. Although like Cal Ripken and other immortals, he’ll get the vote of the fans as long as he can lace up his cleats, or tighten them with velcro, however they do it these days. But there’s much more to Jeter than stats. His commanding presence on the field, in the locker room, and yes, in the community — and the Yankee community is a large one — is, well, priceless. Try putting a price on priceless.
For the past 15 years, Jeter has been the face of the most famous and revered (and too mnay, reviled) franchise in American sports. (I won’t say global sports because until the Yankees can amass a few hundred million fans in Asia like Manchester United, then you can’t call them a global franchise. Don’t argue. I’m right on this one.). A generation of fans have become infatuated with him. He has won five rings, seven pennants, and created more goodwill than any Yankee since Mickey Mantle. He puts fannies in seats, boosts TV and radio ratings, and sells a ton of merchandise. To put it simply, he embellishes and embodies the Yankee brand. He has done so his entire career and will do so longer after his playing days are over.
So again, how do you put a price on that? The Yankees offered Jeter a reported $45 million over three years. Jeter is looking for about $23 million over 5 or 6 years. Pretty steep for a guy who’s seemingly the steep downside of his career. But hey, you can’t fault him for trying. Even if he knows that he would be far less valuable on the open market.
Here’s what I would offer Jeter: based on his production over the past three years, and projecting how he’ll likely perform over the next 3-5 years — strictly based on stats, mind you — he’s probably worth about 8-9 million per. Especially when you compare him to the gold standard, Hanley Ramirez, who is at $12 million per. And is a lot younger. But with Jeter, you have to value price. That is, look well beyond the stats and his age. What is he worth off the field? What does he mean to the brand? Can you really afford to lose him and leave the team in the hands of . . . gasp! A-Rod?? Of course not.
This is what places Jeter in a class of his own. His value to the team, to the brand (the man is walking, talking brand attribute) , is matched by few, if any, athletes. Peyton Manning? Tom Brady? Kobe Bryant? LeBron (more so to Cleveland than to Miami). He has never embarrassed or disparaged the Yankees, and likely never will. And at the age of 37, is as popular and beloved as ever.
So I would offer him at about $14 million per year. I’d guarantee four years with a vesting option for year five. And put the fifth year at around $16 million if he meets some challenging incentives. A total investment by the Yankees of $52-$67 million. They can afford that. And Derek will be able to pay his rent.
I can see why Jeter and his agent Casey Close would come in with such a high number. After all, he is Derek Jeter and can name his number without fear of a public uproar. And, like anyone with leverage — and he has a lot of leverage — you want to set the bar very high and work from there. Of course he’s looking for six years guaranteed. If he has a three-year deal and he’s not ready to call it quits after 2013, you think he wants to go back to the negotiating table? You think he wants to finish his career in Detroit or Tampa?
The Yankees are being portrayed as the bad guys here — so what else is new? I really don’t fault them for their current offer. Despite Jeter’s value, they don’t want to overpay him $50 million if they don’t have to. That’s a lot of money, even to the Yankees. An offer of $15 million per is pretty generous, based on my proposal. It’s based on overall value, not simply what-have-you-done-for-me-lately,the starting point for most contracts. The Yankees are being very careful about the years, and for good reason. If he’s done in three years, they need to replace him with someone better. That’s how it works. Especially when you expect to win the World Series every year and you have the Red Sox and now Tampa Bay trying to one up your every move. Nothing personal Derek, it’s just business.
So they’ll likely meet somewhere in between. Or a little closer to where Jeter is aiming. Maybe the Yankees will throw in an extra year guaranteed, up the annual by a million or two. If I’m Derek Jeter I’d probably take my chances with that. Sure, there’ll be more public sniping, more harsh words. And will the Yankees pay for their hard stand against one of the most popular men to ever wear the Pinstripes? I’m not sure how, despite the howls of the media. Maybe people will curse Cashman and the Steinbrenners under their breath. Big deal. And if Jeter doesn’t bounce back next season, then sentiment will actually shift a bit toward ownership. That’s kind of the way it works. Especially in New York.
Regardless of what the Yankees pay Jeter, they will get value from him. If not on the field, then certainly off it. For many years to come, long after his playing days are over. Try putting a price on an enduring legacy. It’s no easy task.