Sherman says extensions could help with 2014 budget

Joel Sherman wrote an article today offering up some ways to lower the Yanks Luxury Tax bill in 2014.  He thinks they could restructure and/or extend the contracts of ARod, Cano & Granderson right now to help out the Annual Average Value of their deals.

He writes:

“Creativity has not really been a Yankees strong suit when it has come to contracts.Their financial caveman ethos has been: See what like, buy it.In recent years they have tried to employ some financial discipline. Now creativity also will be a requirement if they are to honor a vow to drop under the $189 million luxury tax threshold in 2014.”

Since ARod will make less money starting in 2014, the final 4 yrs on his deal will only pay him $86 Million. However he also has $24M in milestone incentives he may hit.  He recommends guaranteeing $14M of that $24M and adding another yr to ARod’s contract, essentially signing a new 5yr – $100M deal starting in 2014 that would lower ARod’s potential Luxury Tax number from $33.5M in 2014 to $20M.  Interesting thoughts but then you have ARod for even another year in 2018 when he’s 43 years old. I like the idea but I wouldn’t add the extra yr, keep it 4 years and his cap number would be $25M instead of $33.5M – still a big savings and you don’t add another year of a 43 yr old player.

For Cano & Granderson, he recommends extending them right now.  I supported this for Cano a week or so ago although not quite the same as Sherman wants.  I definitely would not tie up Granderson with an extension now.  He’ll be 33 in 2014 so I would not sign him til he’s 36-37 right now.

But give it a read….contains some interesting thoughts though I don’t know how well it would go over with the MLBPA, Bud Selig or the players involved, but it’s food for thought.

About fishjam25

Was a 4-yr Pitcher and Communications Major at Seton Hall University in the 90s. His knowledge & opinion of the game comes from his background as a player and ardent lifetime Yankee fan. However, Fishjam also incorporates sabermetrics and statistical support to form a well-rounded view of the game.

Posted on March 11, 2012, in Misc. News, Personal Opinion and tagged , , , , . Bookmark the permalink. 4 Comments.

  1. Fishjam, I’ll repeat my previous comment below here. I posted it in a different spot a few minutes ago. I actually responded BEFORE I read your post here. So I had a little different take on A-Rod.
    But now that I’ve seen and read your A-Rod comment it makes more sense then the Post piece. I think the bottom line is we both pretty much agree about restructuring his deal..

    Just disregard my comment below on A-Rod. As I just said above I like your solution better. As for Cano and Granderson I think we get to the same place just a little differently.

    HERE IS MY PREVIOUS POST:
    Fishjam, I just read the Post article. It’s intriguing.

    I like his solution for A-Rod because that saves the Yankees $7.5MM per in the critical years of 2014/2016 during the current MLB CBA. And I think it’s something the A-Rod might certainly entertain. As really the only 2 “milestone incentives” it effects dollar wise are the last 2 (762 and 763 HR’s) and there is certainly no guarantee he will hit those. AND if he doesn’t he actually makes out a little better monetarily wise under Sherman’s proposal by $2MM.

    As for Cano’s that pretty much is what you have been advocating, basically adding 6 years on to his current contract. As he mentions he’s not sure the players would go for it and in Cano’s case being represented by Boras that’s obviously a consideration. But let’s assume that the player/agent in this case doesn’t have a problem with it. It certainly is doable I’m just not sure it’s worth it save about $2MM+ in luxury tax implications for the years 2014/2019. While increasing the luxury tax implications for 2012 and 2013 from roughly $12MM AAV each of those years to $20MM+ AAV each year.

    Granderson is very much in the same position as what I just went through with Cano. The numbers are slightly different but the situation is pretty much the same. The issue that I have with Granderson revolve around his age and the position he plays and will be playing in the out years of 2014/2017 extension. When there should be younger and more athletic options available.

    Just to close if the Yankees are intent in keeping both Cano and Granderson certainly the proposals save the Yankees a few bucks in AAV for 2014 etc… But I do like the A-Rod idea the most about restructuring a deal.

  2. It is a very creative idea. Outside the box. But could be good for both sides.

  3. Sounds like a great way to go for the Yanks! I think all players involved would go for it.

  4. ” I don’t know how well it would go over with the MLBPA, Bud Selig”
    MLBPA, evidently has the power to override a contract between players and teams. The deals will not get past the MLBPA or Yankee hater Bud S. As far as A-Rod is concerned, I can see him going with a deal of some sort but, I still think a 6 year deal for a 30 year old 2nd baseman is asking for trouble.
    Over the last two decades +/-, the top 2nd basemen have not played past 33-34 years old. Why?

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