Note, 4:19pm: Dave has authored an updated version of this post, available here.
Note: This post was edited at 1:45pm to reflect updated contract information about Lee’s deal with the Phillies. We initially heard that the overall package for Lee was worth $147.5 million; however, the actual breakdown of the deal is $107.5 million for 5 years, with the $12.5 million buyout bringing it to $120 million guaranteed over six years. The $27.5 million vesting option for the sixth year brings the potential package to $135 million over six, for an AAV of $22.5M. The Yankees’ highest offer was seven years and $148 million ($21.1M AAV).
The following is a guest post from sometime Yankeeist contributor David Meadvin.
This morning, my long-suffering Mets fan friend Tom suggested that Philadelphia’s surprise signing of Cliff Lee might represent the “steal of the century.” The conventional wisdom in the hours since this deal went down has been that Lee left a pile of money on the table to play for a team he felt most comfortable with.
That’s good spin by Team Lee, but it doesn’t quite tell the entire story.
It’s taken as gospel these days that guaranteed years are the holy grail of free agency. The Yankees offered Lee a deal that, with a player option, included a seventh year. No other team was willing to go seven. So the Yanks’ offer must have been the strongest, right?
Wrong. Let’s look at the final reported offers for each of the three contenders:
|Team||Guaranteed Years||Option||Total Value||AAV|
|Phillies||5||1 (vesting)||6 years/$135 million||$22.5 million|
|Rangers||6||1 (vesting)||7 years/$161 million||$23 million|
|Yankees||6||1 (player)||7 years/$148 million||$21.1 million|
On total contract value, it appears that the Rangers offered the best deal at $161 million. But keep in mind, that’s over seven years, versus the Phillies’ six.
In essence, the Rangers were asking Lee to pitch his seventh year for just $13.5 million (the difference between their $161 million total value and the Phillies’ $148 million). In light of the new contract information, Lee’s decision to spurn the Rangers appears to have been a harsher than initially realized, as there’s a $26 million difference between Texas’ and Philadelphia’s packages. Now, we don’t yet know what the Rangers’ vesting option entailed, and there were also reports that part of the $161M offer contained deferred money, but as of now it sure looks like the Rangers offered the most money.
Cliff Lee will be 38 when his new deal expires, assuming the sixth year vests. While he won’t be a spring chicken, his epic control suggests he can be an effective pitcher much longer than a pure power pitcher who can’t hide behind a fastball that loses a few mph over the years. If he comes anywhere near retaining his form of the past three seasons over the life of this new contract, there’s no reason to think he can’t sign another multi-year deal at 38. Taking into account the possibility of further contract inflation six years from now, Lee could be setting himself up for another $50 million payday (3 years/$50 million doesn’t seem ridiculous in 2017).
Even if this is Lee’s last contract, if we round the Phillies’ offer up, he took the highest average annual value, and that’s the best way to judge this deal.
Baseball fans and pundits have been suggesting that this contract negotiation represents a watershed moment where the Yanks’ huge financial advantage couldn’t win the bidding war. Yankeeist wrote earlier this morning:
“Lee is that rare athlete who clearly isn’t all about the money.”
We now know that isn’t true. Lee took the richest deal on the table. It’s easy to say in hindsight that he wouldn’t have signed with the Yankees for any amount of money. We’ll never know. But if the Yanks had upped their deal to exceed the Phillies’ offer on average annual value and the Rangers’ on total value, there’s no reason to think they wouldn’t have gotten their man.
The Lee saga isn’t a story about the Yankees getting rebuffed by a player who rejected their big money. After all these years, we’ve simply been trained to assume that’s what happened. But this is actually a story about the Yankees setting a value on a player they wanted and sticking to that number, even if it meant being outbid.
That’s a new way of doing business, and it bodes well fo
r the future.
By day, David Meadvin is president of Inkwell Strategies, a professional speechwriting firm based in Washington, DC.
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