The common line is that right now, the Yankees have about 2 million dollars left in their budget for the 2010 season. I think that this is entirely plausible. Hal Steinnerbrenner gave Brian Cashman a hard number, and said that he would have to approve any spending over that number. He did so last year with Andy Pettitte, and I think we’re going to see the same thing with Johnny Damon.
On one hand, the Yankees needed a budget. In both the free agent market and the draft, they often found themselves taken advantage of by free agents. I would probably put Jorge Posada and Mariano Rivera in this category (both received over market value contracts), I would probably expect Derek Jeter to sit there after this season, and I definitely think that Johnny Damon expected the same thing to happen to him.
Think of it this way: Andrew Brackman got almost 5 million dollars guaranteed from the Yankees even though everyone in the world knew he needed Tommy John surgery. Teams have been able to on an individual level leverage the Yankees needs against their individual budget. Without short term alternatives (the Yankees weren’t going to go out and find other players instead of Posada and Mariano) or a hard budget, individual were able to game the market to get much more money than any other team would have paid them. I honestly believe that Damon thought that he could get a Mo-like deal this offseason – 3 years at his current salary. The hard budget – even though the Yankees could spend a lot more and still make a profit – removes their leverage.
Johnny Damon could probably be had for about 6-7 million dollars. Xavier Nady signed today for 3.3 million with incentives, so we’re probably looking at a Baldelli type as the best possible solution for 2 million dollars. Reed Johnson will probably close to the Nady range, and there isn’t much else out there. But let’s say that the choice is between Johnson at 2 million and Damon at 7 million.
I think it makes rational economic sense for Hal Steinbrenner to pay the extra 5 million dollars for Johnny Damon. Reed Johnson is a decent little player. So are Brett Gardner and Rocco Baldelli. They all have their strengths. However, they aren’t on the same level as Johnny Damon. Damon had one of the best offensive years of his career last year. A batting line of .282/.365/.489 is damned impressive, and there is reason to believe that he’ll be a better defensive player too. There is a very good chance that he is worth twice the potential salary in 2010. His power surge may be due to Yankee Stadium, but the fences aren’t being moved in any time soon, so it may be here to stay.
In addition, signing Damon helps the Yankees bench. With Austin Jackson gone, the team is very short on outfield depth. Brett Gardner would become one of the better 4th outfielders in the major leagues, and a major defensive and speed asset off the bench. I hate the term “situational hitting”, but there are certainly a lot of situations where Gardner will be useful, and he’s well above replacement level in case of injury.
But the 5 million dollar difference is all about marginal value. The Yankees face a very tough fight for the division this year. A lot of Yankees are ripe for regression, and the Red Sox added a lot of talent to their already great roster. I think that the Yankees are still the better team on paper, but Damon would give them considerable insurance in the division. Making the playoffs will be a huge economic plus for the Yankees. It will make them tens of millions of dollars – more if they advance to or win the World Series. The payroll spent on the team is a considerable investment that should be protected.
Let’s assume that the team budget is 210 million. Damon’s extra 5 million pushes it to 215 million. Let’s say that on average, missing the playoffs will cost the Yankees 50 million dollars. This are abitrary numbers, I know. But a quick and dirty calculation tells you that if Damon increases the Yankees chance of making the playoffs by 1 in 10, then it is a good bet.
The division is very tight. The Twins, Rangers, Mariners, Rays, Red Sox, Yankees, and maybe a mystery team or two will be fighting for the Wild Card slot. If the Yankees suffer a major injury or two, they could very well end up fighting for their playoffs lives. But Damon makes them one injury deeper. If I were Hal Steinbrenner, I’d stare at that big pot of playoff money (not to mention benefit to the Yankee brand) and poney up the relatively small extra cash. The 210 million is already spent. All he has to think about is “5 million or not”. Its the right decision.
I think that he’ll take it. I think that we’ve seen a lot of posturing on Cashman’s part, and it certainly seems to have spooked Damon, who was a fool to turn down a 2-year contract. But I very much expect Johnny Damon to enter spring training as a member of the New York Yankees.
My bet is Tuesday. Any takers?