Help me understand this Jeter $12M contract thing.....

Imo Jeter is their marketing tool. 3 million is a drop in the bucket to them to have him at the park for fans to see. Its more of a sign of respect.

Sports is entertainment. Butts in seats = $$$.

That being said, the linked article is, er, questionable. The deal as announced wipes out the previous option, which is critical, as the "tax" is calculated across the term of the contract. New contract = new (lower) taxable figure. It's not a "raise" in any sense of the term.

 

Odd mistake for a baseball sportswriter.

So, does anyone recall this ever happening before? This kind of is my point with this thread.  Has a beloved superstar (and future HOF)  in any major sport been bumped up in salary out of the kindness of the owner's heart (knowing they'll make it up the $2.5M on the back end)?  Is this setting precedent for the future?  Can Big Papi (pick any franchise player) expect to get a bump up next year?  Ortiz has three World Series rings in the last 10 years, despite what your or I think about him.  I'm just throwing ideas out there.  I don't recall Todd Helton (the face of the Rockies for many years) getting this treatment.  Is this the reward for staying within one franchise or is this purely an Jeter/Yankee phenomena?  I don't recall the Yankees doing anything like this in the past.

The headline of this article says it all...

 

"Goodwill"

 

http://www.usatoday.com/story/...-12-million/3352749/

 

Rich

www.PlayInSchool.com

Not sure what you're asking here. The new contract is for less money than previous (12 and change is less than 15 and change, so how that's "more" is beyond me), and by inking a new contract the "tax" is now calculated on the new figure rather than the old figure.

You mention Helton - his final 2 year/10 year contract did the same, as the deferred portion over the next 10 years won't count 100% towards the Rockie's total salary level.

 

Break it down: Had the option been exercised, the tax would've been on the 15M+, regardless of the actual salary for that given year. The new LT figure will be on the lesser amount. Shouldn't be hard to understand.

Jess,

 

Jeter' 2013 contract just expired.  Jeter had a $9.5M option for 2014 that he just exercised   I don't care about luxury taxes, they are not central to the discussion.   The Yankees threw another $2.5M at him because they are nice guys.  Is this nice guy treatment a trend for aging superstars? Has this happened before?  Have we seen this behavior from ownership before?  If so, when?

 

Anyone?

Dunno or care who peed in Jess's Cherios, but ...  I disagree with your conclusion that they put another $2.5M in Jeter's pockets because they are nice guys.   Apparently it's not necessarily true that the Yankees would save money on the long run due to the luxury tax.   I think it's a simple as this:  Jeter's people  told the Yankees that he was going to pass on the $9.5M option because he thought a future  first ballot HOF member deserved more - say $14.1M. The Yankees realized that they had 3 lousy options:  They would have to sweeten the pot, make him a $14.1M qualifying offer, or listen to the whiniest fans in all of sports complain about letting the face of the franchise finish his career in Queens or someplace like that.  They chose door number #1.

The Giants just gave Lincecum an even bigger nice guy contract, considering what his capabilities are now compared to a few years ago. Teams have bid against themselves on several massive contracts also which is another thing entirely. I think they were just keeping Jeter happy with a drop in the bucket to them.

I'm considered a nice guy.  

 

Where is my millions!  

JCG - I'm following the logic, and it is very plausible.  Possibly they had bigger concerns and this was minimal in their minds.  I think they made a great move resigning Gerardi first.  This may have been next on the "to do list" so they can begin building for the future.  I'm wondering if the Red Sox consider something like this with Ortiz who is only signed through 2014.  No player or club option in 2015 for Ortiz.  If he plays like he did this year, possibly they could offer him an extension for 2015.  Ortiz is a DH, so his longevity may not be in question as much as Jeter.  Just a thought.

 

I don't see Lincecum in the same light as Jeter.  He;s only 29.  Whether or not his best years are behind him is another matter.  I saw the SF Giants didn't take their $18M club option in Zito.   That decision probably took less than a nanosecond. 

Fenway - 

 

Keep in mind I'm a life long Mets fan.  So with my completely unbiased opinion putting Ortiz & Jeter in the same category is almost night & day.  Love both.  But Jeter 1,100 more hits.  He also plays SS.  And until this year played every single day.  Ortiz plays 5 minutes of most games.

 

Jeter will be in the conversation with Mantle, Ruth & Gehrig for ever.   Jeter already owns 7 Yankee all time offensive records.  Ortiz has zero.

 

That is the reason the Yankees are "taking care" of Jeter.

 

Rich

www.PlayInSchool.com

 

 

I agree PIS, a Yankee for the ages, plus absolutely no controversies over his entire career (at least that me, as a West coaster has heard of)

 

Plus, don't forget the year he had offensively in 2012 - dude can still rake.

 

Jess,

 

I think I got it.   At first you were confusing me with your $15M number which didn't make sense to me initially given Jeter's 2014 exercised salary at $8M + incentives to get to $9.5M.  You kept throwing the $15M number around.   So, I found this article on Fangraph which further clarifies your point about luxury tax meaning everything.   Here is the key from the FanGraphs article: 

 

"Because this is a new contract and not a continuation of the old contract, Jeter will count $12 million against the team’s luxury tax payment for 2014 instead, so by paying Jeter more than he was scheduled to make, they’ve actually lowered their luxury tax calculation by about $3 million. Which, you know, is pretty silly, but this is how the calculations work.

 

$3 million might not seem like a huge deal, but there’s a huge difference for the Yankees in having their calculation come in at $188 million instead of $189 million. Because they are a multiple time payer of the luxury tax, they pay a 50% tax on the amount they are over the threshold. If they get under the $189 million figure even just once, then they can safely go back over the tax in subsequent years, but their tax rate will be reset to the lowest figure of 17.5%. If they can get under $189 million this year — A-Rod’s suspension should help in that regard — then they could bounce their payroll back into the stratosphere for 2015 and pay much less in tax in the future."

 

It is now crystal clear what is going on here with Jeter.  Thanks for hanging in there with me. 

 

http://www.fangraphs.com/blogs...ury-tax-calculation/

 

http://www.baseball-reference....de01.shtml#contracts

 

It appears the Rockies did something similar with Helton to free up some cash, stay under luxury threshold and retain an aging superstar who wanted to play out his last years with a team he has long tenure with.  http://www.huffingtonpost.com/...t-exte_n_495325.html

 

Any other players come to mind?

 

 

PIS/like2rake,

 

For discussion & example purposes only, I was comparing Jeter to Ortiz in terms of age, contract timing, and what they mean to their franchises.  Nothing more than that.  I'm not comparing them as players.  However, based on the situation above Ortiz will be a free agent again in 2015 and could sign a new contract a la Derek Jeter above go through that fuzzy math luxury tax calculation next year. 

IMO, The reason Yankees did this is Jeter will be the face of the franchise for the next 40-50 years when they parade him out with all the Yankee Stadium events like old timers. When Yogi Berra and Whitey Ford are gone, Jeter will be that one. 

 

The extra 3 mil is just a small investment from the owners to keep in happy

 

And who in the Yankees system is a better option than Jeter? Yanks have nobody in the minors and Nunez is one of the worst major league fielders around.

Excellent point zombywoof.  So, the going rate for 40-50 years of goodwill has been set at $3M by the Yankees!    He'll be a great ambassador for them when the time is right.