Derek Jeter Is The Biggest Bargain In Baseball (A Rebuttal)

Derek Jeter is a bargain at his current salary of $22.6 million a year.  You could pay him A-Rod money — $30+ million a year, and he’d STILL be the biggest bargain in baseball.

I don’t have to look at FanGraphs or Baseball-Reference to know that what I’m saying is true.

(OK.  I DID look at FanGraphs.  FanGraphs says that Jeter’s Wins Above Replacement(WAR) number is currently third best for American League shortstops, half a win behind leader Alexei Ramirez, and tied with Marco Scutaro.  This half-a-win difference does not seem to me to be worthy of hand-wringing. For what it’s worth, Jeter’s co-All Star Elvis Andrus has a WAR rating 0.4 behind Jeter’s. Why in heaven’s name are we so worried about Derek Jeter’s 2010 performance?)

Remember, IT’S ALL ABOUT THE MONEY.  It’s all about the paying customers and eyes tuned to the YES network, the engines that generate the cash flow.  This isn’t rocket science, people.  The cash isn’t going to flow unless there’s a product on the field that drives fans to reach DEEP into their wallets.

People don’t pay big bucks to watch $5 million shortstops.  They DO pay big bucks to see Derek Jeter.

Throw your sabermetric calculations out the window.  Derek Jeter is the best known baseball player on the planet.  He gets selected to all-star games.  He gets to appear in Gillette ads with Tiger Woods and Roger Federer.  He gets to date the most beautiful women in the world.

SportsBusiness Daily conducted a recent poll of baseball “movers and shakers” to determine who is baseball’s signature star.  You’ve probably heard of the guy in the poll that came in second place – his name is Albert Pujols, and he’s arguably the best player in the game.  Albert got three votes as baseball’s signature star.  Derek Jeter received 39 votes, 80% of the total.  Only Joe Stalin won elections with this kind of margin.  By the way, who do you think topped the previous two polls of baseball’s most marketable stars, in 2003 and 2005? Derek Jeter, and Derek Jeter.

Who has the top selling jersey in baseball?  Derek Jeter.  Whose bobblehead doll is most popular?  Derek Jeter’s.  Who is the most popular baseball player?  Derek Jeter.  He is the third most popular athlete in the country, behind Tiger Woods and Kobe Bryant.

This isn’t about power to the opposite field.  This is about star power. This isn’t about turning the double play.  This is about turning turnstiles.  This isn’t about Hal Steinbrenner and the front office.  This is about the box office.

My wife could trip over David Ortiz and land on Tim Lincecum, and she wouldn’t recognize either of them.  But my wife knows Michael Phelps when she sees him.  She knows Tiger Woods and Kobe Bryant, and both Williams sisters.  She probably could recognize Tom Brady and Apollo Ohno.  She thinks that Lance Armstrong is “sexy”.  The only baseball players she knows by sight are Manny Ramirez (we live in LA) and Derek Jeter.

You don’t think that star power matters?  Consider our neighbors to the north, the Boston Red Sox.  Rob Neyer posted earlier this week that the ratings for the Red Sox regional broadcast network are down 36% so far this year – as Neyer put it, this is “way, way down.”  Low ratings mean (eventually) less money for the Red Sox to spend on payroll.  The Red Sox regional network had the highest ratings in baseball for years, and now they’ve dropped to fifth place.  What happened?

Neyer blames some of the drop on the Celtics’ and Bruins’ playoff runs, and most of the drop on the fact that the Red Sox are in third place.  There’s some truth to what Neyer says.  But I have to point out that the Phillies’ ratings are UP in spite of the fact that they’ve been struggling all year, and that the Red Sox were just a half-game out of first place at the beginning of this month.  Something more must be going on here.

I look at the Red Sox’s relative lack of star power.  You know a team has star power when you can refer to their players by first name or nickname.  Like CC and A-Rod and Teix and the “Core Four”.  Even today, years after the Red Sox’s 2004 and 2007 championships, I can still refer to Manny and Pedro and Nomar, and (if you’re a baseball fan) you know exactly who I’m talking about.  Please don’t get me wrong, I have great respect for the current version of the Red Sox, but if I mentioned Kevin, Dustin and Josh, how long would it take before you knew who I meant?

If you don’t like my “first name” theory, consider this: not one Red Sox player was voted by the fans to this year’s All-Star game.

The Red Sox provide us with a perfect model for how NOT to value Derek Jeter.  The Red Sox are terrific at evaluating players and finding hidden value.  The Red Sox don’t overpay to keep aging talent – it seems like no one ever retires in a Red Sox uniform.  So Manny is replaced by Jason Bay, who in turn is replaced by Mike Cameron.  Each replacement improves the team, and each replacement arguably makes the team less interesting.

Don’t take my word for it.  Consider instead the words of the most famous Red Sox fan in the Red Sox nation, ESPN’s Bill Simmons.  Bill spoke about the Red Sox to Johan Keri in a pre-season webcast last March.  While Simmons thought that the Sox would win at least 95 games in 2010, he also said that “last year’s Red Sox season was the most boring I can remember that they’ve had probably all decade.  There was not one person where  I was excited when the guy was up …  You always used to have the Manny test of ‘oh I can’t go get a hot dog right now, Manny’s coming up the next inning.’  There wasn’t one guy on the team where you felt that way. ‘I’ll get a hot dog right now.’ What do you care?  Who are you going to miss?”  (29 minute point of podcast.)

It’s not difficult to draw a connection between what Simmons said in March and this July’s plummeting Red Sox TV ratings.  It matters a great deal when a team’s biggest fan calls the team “boring”, just as it matters when a movie critic  calls a movie “boring”.

This may offend the purists, but you cannot value a baseball player solely on the basis of how the player performs on the field.  Some players are worth more.  Manny Ramirez.  Joe Mauer.  Ryan Howard.  Stephen Strasburg.  The guys you go out of your way to watch.  The guys they build national TV broadcasts around.  The guys who are the signature players on their teams.  “Ichiro and the Seattle Mariners.”  “Joe Mauer and the Minnesota Twins.”  Not every team has one of these guys.

Baseball is entertainment, and entertainment is star-driven, and stars are worth more than the rest of us, because people pay to see stars, and IT’S ALL ABOUT THE MONEY.  The biggest star in baseball’s night sky is Derek Jeter.  We’ve already shown, no one else comes close.  Jeter’s being the biggest star does not make Jeter the world’s best baseball player (though he’s still pretty damn good), any more than Tom Cruise is the world’s best actor, or Lady Gaga has the world’s best singing voice.  You don’t get to pay Angelina Jolie less money just because you think that she was better looking 10 years ago.  That’s not the way things work.

When the time comes, Derek will sit down with Brian and Hal, and the Yankees will pay Derek a boatload of money, and Derek will play for another 4 years and make the Yankees a bigger boatload of money, and everyone should be happy.  Us included.

Yes, at some point when Jeter is not performing up to a level where he’s tied for third for AL shortstop WAR, we’ll have to consider moving him to another position or reducing his role.  If you want to worry about this, go ahead, but worry first about having a replacement available to play shortstop in Jeter’s place.  (Or worry that Jeter asks TODAY to be moved to DH, so that he can prolong his career and chase Pete Rose’s career hits record.  What in the world would we do if Jeter didn’t want to play shortstop anymore?  Who would we get to replace him?)

In the meantime, don’t worry about how much Jeter is going to be paid.  His fame and popularity make him one of a kind, and anything that’s one of a kind is impossible to value.  He is the Brad Pitt of baseball.  Imagine that – a Brad Pitt who is tied for third in American League shortstop WAR.  What do you think that’s worth?

It’s worth a lot more than $5 million a year, that’s what it’s worth.

44 thoughts on “Derek Jeter Is The Biggest Bargain In Baseball (A Rebuttal)

  1. HIM

    Larry…you summed it up perfectly…IIATMS

  2. HIM, that's why they pay me the big bucks!  Thanks.

  3. adam

    What you write is true, but that's what the "vacuum" bit is about — without the media, without the market, without New York, Derek Jeter isn't that great.  But he does bring millions of eyes with him wherever he goes, and for that he may well be worth lots of money to the team, maybe more than what they are paying him.  But that doesn't necessarily correlate to building the winningest baseball club possible.  Where is that balance point?

  4. Brien Jackson

    Articles like this are why people like me just can't help but find Jeter annoying.

  5. Patrick

    If I could have only one player with me down in the baseball trenches, it would be Jeter.  I think most of us and most ballplayers would agree.

     

    What does it matter how much he makes?  Are you paying his salary?

    Here's a newsflash:

    ALL BASEBALL PLAYERS ARE OVER PAID.

    ALL PROFESSIONAL ATHLETES ARE OVER PAID.

     

    Get a grip.  The man is the epitome of baseball and he happens to be on the New York Yankees, do you really expect him to make any less than a bajillion dollars?  Stay in your vacuums, please, then maybe the rest of us can watch the game in peace.

  6. Brien Jackson

    "If I could have only one player with me down in the baseball trenches, it would be Jeter.  I think most of us and most ballplayers would agree."

     

    I think I'd take Albert Pujols myself. Crazy, I know.

  7. Jason@IIATMS

    While I did say that Jeter could (and probably would) be paid above market –due to the Yanks' "Hometown Premium"– any discussion of his compensation was being compared to his on-field 'value', not his intrinsic value to the team and the fans.

    It's a heckuva debate; thanks for furthering it.

  8. Steve

    Of course no one would know who Kevin, Dustin and Josh are. That's because they're better known as Youk, Pedroia, and Beckett. That's like saying everyone should know Manny by "Ramirez" and Pedro by "Martinez. I'm a Yankees fan in Boston and it seems like over the past 5 years the red sox have gone from the lovable underdog to the old mutt who no one wants to play with anymore. Yankees still reign supreme.

  9. JE

     

    “If I could have only one player with me down in the baseball trenches, it would be Jeter.  I think most of us and most ballplayers would agree.”

     

    I don't even know what this means. However, I *do* know that Jeter was just voted the most *overrated* player in the game by his fellow players.

  10. Brien Jackson

    While I'm thinking about it, the idea that Jeter is going to make his contract irrelevant because hes going to generate more revenue for the team than whatever they pay him is pretty ridiculous. The Yankees are a huge brand in and of themselves. They're going to sell tickets, advertising, merchandise, etc with or without Jeter, as long as they're winning. I'd actually venture that Jeter's marginal value in terms of generating revenue is actually pretty low. So no, a contract is not going to pay for itself, particularly if it's a big contract. And the comparison to actors isn't a good one either. Movies use big-name actors to brand ("the new Clooney movie," or whatever). A baseball equivalent might be Strasburg and the Nationals. But the Yankees are there own brand, and they're going to make their revenue no matter what when they're winning.

  11. Marc

    Totally agree that he's the best bargain in sports.  Next year, he will hit 3000 as a Yankee.  The ONLY thing hurting him is the obvious lacking of bargaining power since everyone knows he's smart enough to never go anywhere.  I see a lower deal value coming but with a longer term than everyone else is expecting.  Maybe a 5-6 year deal that will include a clause to roll it into a personal services contract for post-baseball life. Hell, Roger Clemens got one from the Astros after just 2 years with them! 

    Rather than inflate payroll more with more per year, they'll work with league approval on a longer term deal that becomes a lifetime contract.  Hell, they could make it a 10 year deal with the same conditions, especially when you consider that some late 20's guy with the Devils just signed a 17 year deal! 

    If they sign him to a longer term deal with a personal services aspect, which I would doubt anyway, then Jeter would agree with the team to retire with class and on his terms when his good playing days are over.  That way, when he retires, he's no longer eligible for that money and both sides look good with him making the call deciding to step away at the right time and the team giving him that control. 

    Hell, we all know that he will be a future manager/GM/part-owner of the Yanks at some point after he retires anyway!

    You heard it here first.  Watch for the long term deal, that no one else is mentioning yet!

  12. Ben

    Brien, your point about the Yankees being a big enough brand on their own is valid, to a point.  They WOULD have plenty of butts in the seats without him.  But by keeping him, in guaranteeing his legacy is synonomous with the team, they continue to make money off him in perpetuity.

    I think the real point here is that the value of a baseball player, someone who can hit and catch a ball really well, is pretty insignificant in a vacuum.  You've got to consider the entire business side of it.  Frankly, from an economical standpoint, players aren't being payed for their ability to play, because that ability alone is worthless to the team as a business.  They're being payed for the amount of revenue that this ability brings the team, through fans won over by winning.  Fact is, Derek brings that revenue even without his baseball abilities.  The discussion we typically have about baseball salaries doesn't take into account the reality of their actual value to their team.

    And so long as these negotiations don't go horribly wrong, YES will continue to make money off Jeter for years to come when we leave the channel on Yankeeography: Derek Jeter when we're kind of drunk and too lazy to find something else to watch.

  13. Brien Jackson

    "Hell, we all know that he will be a future manager/GM/part-owner of the Yanks at some point after he retires anyway!"

     

    No, not really. In fact, I very much doubt it.

  14. Brian R.

    Simply put, Jeter and the Yankees have an mutually beneficial relationship, always have, always will.  They have done so much for each other, and will continue to in the future.

     

    The Yankees would have the most valuable brand in MLB with or without Jeter, and Jeter would be a first ballot hall of famer and star with or without the Yankees.

     

    But, they just wouldn't have been the same without the other.  And I think even though there is tremendous pride on both sides (rightfully so), they both realize that.

     

    Hopefully we can put this debate to rest once and for all.

     

     

  15. JP

    This is an interesting argument, and it's true that front offices need to pay attention to more than just wins, but how much revenue a player will generate.  Jeter's popular, and that adds value above wins he produces.  However, it's very possible that Larry has gotten causality backwards.

    For a while, some people said, "Jeter is overrated, and if he were on the Royals he wouldn't be a star."  That was always wrong: Jeter would've been a great player on any team.

    But would Jeter be the most marketable player if he were on the Royals?  No.  Would he be a household name if he played for any team other than the Yankees?  No.  Jeter's marketability is largely impacted by the fact that he's on the Yankees.

    On the other hand, even if Jeter's star power is largely due to the pinstripes, his star power has vested.  It's his now, and he theoretically could take it with him elsewhere.

     

    My guess is that Jeter's star power in NY is of triffling impact to the Yankees bottom line.  Actually, it's probably OTHER teams that should most willing to pay a premium to add Jeter's star power to their roster.  Imagine the marketing that would ramp up for any other team were it to sign Jeter.

  16. Ben

    http://www.forbes.com/lists/2009/33/baseball-valu

    So the Yankees total revenue in 2009 was around 375 million dollars, around 300 million coming from ticket sales.  If we were to predict say a one percent dropoff in ticket sales with Derek gone (sure, it's a guess) that's 3 million right there.  I don't know about in baseball, but in the NFL teams make around 6 million dollars average from jersey sales, so using these numbers and adjusting for the fact that this is the biggest team in baseball, we'll say that if Jeter's #1 selling jersey comes off the market, the team would lose maybe 1-2 million a jear.  I didn't bother to look up numbers for the YES network's revenues, but given the aforementioned numbers for the Red Sox's network, I think we can assume that getting rid of our ageing but interesting players could account for a significant loss of viewership, thus Jeter's dismissal would lead to a very noticable drop in advertising revenues.  And then you have the team's valuation.  Part of the reason that the Yankees franchise name alone is worth 266 million dollars, vastly more than that of any other team, is the fact that the team breeds an image of history, all the greats still come back for old-timers day (when they don't fall on their porch).  I agree that in the long run, if Jeter walks away he'll still be a Yankee in all the history books.  But letting him go would do not completely insignificant harm to the image the yankees have of defending their history, and to the team's $1.5 billion valuation.

    So yes, Jeter needs the team more than the team needs him, such could be said of any person and their employer.  But even if we're being silly and assuming that Jeter is worth Marco Scutaro money in a vacuum, there is legitimate financial justification to overpay him by 5-10 million dollars a year.

  17. JP

    @Larry, whether you intended to establish it or not, your argument implicitly relies upon causation.  If I understand your argument, it is that Jeter's popularity boosts revenue above and beyond his on-field production.  In fact, his popularity is so huge, that he boosts revenue to the point where he's a bargain, even if he's being paid well above what WAR would indicate is a fair salary.  In support, you cite the fact that he tops lists of "movers and shakers," that his bobble head sells well, that he's the third most popular athlete in the country, etc.  Sure, he's popular.  But how much of that popularity just has to do with the pinstripes?  It's very hard to tease out how popular Derek Jeter alone is, as compared to Derek Jeter, SS and Captain of the New York Yankees.

    To the extent that his stardom is caused by his playing for the Yankees, then the Yankees are actually subsidizing his income.  I really really doubt he gets all of those endorsement deals if he's on the Pirates, hall of fame caliber career or not.  In fact, Jeter may be financially better off taking LESS money from the Yankees than from another team, because merely being a Yankee boosts his income in other areas.

    Would Jeter retain his star power on another team?  Like I said, perhaps his fame has vested, and he can take it in full (or nearly in full) with him anywhere else.  But maybe not.  To the extent that Jeter's popularity is tied to the Yankees, the Yankees are providing him with an intangible benefit, which helps boost his overall income and stature in the game.

     

    Now even if Jeter's popularity were ENTIRELY caused by his playing on the Yankees, ultimately if he brings people to the stadium, who cares?  Added revenue is added revenue, right?  I think it does matter though, because if Jeter's popularity, legacy and endorsement income is largely based on his playing for the Yankees, he should be willing to take a pay cut.  If the Yankees offered 10 million per year, and the Pirates offered 11 million, does any one really think Jeter would leave the Yankees?  That is, Jeter is an asset who theoretically should be able to be purchased for something less than he's currently being paid.  Even if Jeter's popularity still makes the Yankees better off at the higher price point, overpaying is overpaying.  It ain't a bargain.

  18. German Madrigal

    spot on! this is the first (its all about the money)article i ever read… i gotta say you're a very talented writer.

    i will be looking forward to next article!

  19. Brian R.

    Great article, you hit the nail on the head
     
    Here’s a good way of explaining it… Jeter is the only player in BASEBALL, who is not a home run hitter, who I will not change the channel or get up to go to the bathroom/fridge while he is at bat.  The only one.
     
    All the other ones (Manny, Pujols, Howard, Arod) are the big home run guys… it’s what makes Jeter, and to a lesser extent Ichiro, so special.
     
     

  20. Brian R.

    JE –  Do you also know a poll of major league players also voted Jeter as one of the 5 most valuable commodities of baseball.
     
    And that a poll of major league players had Jeter finish second when asked what player they would choose to build a franchise around?
     
    So basically, you have about 9-10% (1 in 10) of players who think Jeter is the most overrated
     
    And then you have a BIGGER percentage who feel he is one of the most valuable franchise players in the sport.
     
    But hey, never let the facts get in the way of a good job at Jeter.  Moron.

  21. Brian R.

    *jab

  22. Patrick

    Brian -"As I said I don’t really care what the actual dollar amount is per year, that’s between Jeter and the Yankees.  They will sit down and come up with a magic number that works for them.  Frankly, it’s none of our business."

    Basically the point I was making

    JE- "I don’t even know what this means. However, I *do* know that Jeter was just voted the most *overrated* player in the game by his fellow players."

    Basically I was saying what Brian was saying with all his percentages/polls.  He may be older, and not as much of a producer, but he's has more knowledge, talent, and baseball knowhow then you could shake a stick or bat at and is still among the tops at his position and in some degrees at the plate.   It has nothing to do with the Yankees or money.  All professional athletes are over paid, so why argue about the money?

  23. Brien Jackson

    Ok Ben, how exactly does any of that change in the highly unlikely event that Jeter goes somewhere else? How much money is lost over the course of X number of years? How does that relate to the overall level of revenue the team is going to bring in.
     
    Also, it seems to me that everyone is overlooking the highly salient point that, from the brand perspective, Jeter needs the Yankees much more than the Yankees need Jeter.

  24. Larry@IIATMS

    JP, I'll bite.  How much of Jeter's popularity "just" has to do with the pinstripes?  Some of it.  But Ramiro Pena's jersey does not sell as well as Jeter's.  How about the pinstripes plus the longevity?  Posada's bobblehead doll does not sell as well as Jeter's.  Being the Yankee shortstop?  Jeter is much better known than Gene Michael was in his prime, or Bucky Dent was in his time (not to mention Fred "Chicken" Stanley).

     

    We can exaggerate the importance of playing in NY.  LeBron James has played his entire career (that is, before he took his act to South Beach) for a forgettable NBA franchise in Ohio.  The best known football players are found in the suburbs of Dallas and Boston.  It's simply not the case that an athlete has to ply his trade in New York to max out his popularity.

     

    Would Jeter's star fall if he played for a winning team in another city?  Probably, a little bit.  When Jeter dons pinstripes, he takes on some of the aura of the greats that played for prior Yankee teams — just like Kevin Garnett looks a little better in the colors previously worn by Cousy, Russell and Bird.  That doesn't mean that the Yanks can sign Jeter at a discount, any more than the Yanks were able to sign CC, Teix or AJ at a discount.  You can argue that such a discount makes sense, and it's not a bad argument, but life as we know it does not support your argument.

     

    I'll disagree with you on the "overpaying" thing.  Jeter is unique in the game of baseball.  He cannot be replaced.  In my original post, I compared Jeter to Brad Pitt, in part because it struck me as funny.  The better comparison is to Joe DiMaggio.  I'm not putting either Derek or Joe up for sainthood, but you simply do not find baseball players very often who come this close to representing what a franchise is all about.  IIATMS, but it's not always about bargain-shopping.  Sometimes I buy at Wal-Mart, but that doesn't mean I wouldn't sometimes shop at Tiffany's.

     

    When you find a player like Jeter, you don't cut his salary simply because he's gotten older and is not producing the way he used to.  The Yanks didn't cut DiMaggio's salary.  They didn't cut Mickey Mantle's salary at the end of his career.  There was no cut for Don Mattingly.  Here's one you might look up: the Yankees DID cut Lou Gehrig's salary towards the end of HIS career.  Read about that on the web and tell me how good an idea THAT turned out to be.

     

    Funny you'd mention Jeter finishing his career in Pittsburgh.  That's where Babe Ruth finished his career, as a Boston Brave.  That wasn't a good ending for Ruth or the Yankees.  It's not the right way to go with Derek Jeter.

     

    Also … it's not like Derek Jeter is staggering around the field like an overweight Babe Ruth!  During this "off" year, Jeter is still tied for third in WAR for AL shortstops.  He's still a very productive and talented baseball player.

     

    He's also a legend, an icon.  Appreciate him while you can.  When he retires, he will not quickly be replaced.

  25. JE

    “And that a poll of major league players had Jeter finish second when asked what player they would choose to build a franchise around?”
     
    I didn’t see that one. How old is that survey? Building a baseball team around *any* 36-year-old is like building a car rental fleet out of Ford Pintos.

  26. Brian R.

    JE – Either the 2006 or 2006 poll, I believe 2008.  I think the 2006 one was when he was named one of the 5 most valuable commodities in the sport.
     
    That entire point is irrelevant to this discussion.  I only brought it up because the player polls that have Jeter as most overrated are misleading.  Or, that it’s only giving one side of the true story.
     
    My whole thing is that I want Jeter to be a yankee for many more years, I don’t care about the money (it’s not MY money) or what the haters say or whatever.  When I turn on the television at 7:05 tonight, I demand that Jeter be there, it’s really that simple.
     
     

  27. JE

    Brian, I was only pointing out that the “baseball trenches” comment was confusing. Of course, player/coach polls are meaningless, most notably the Gold Gloves! ;-)
     
    I don’t doubt that Jeter’s value goes *way* beyond his play on the field … but his declining skills *must* be factored into the equation when the contract talks get underway, particularly as it pertains to the length of any extension. As you know, shortstop is the most important everyday position on the field; therefore, I doubt that Cashman will permit the sentimentality factor to get out of hand.

  28. Brian R.

    2006 or 2008… geez can’t type today

  29. Larry@IIATMS

    One advantage of living on the west coast is that I can post my articles, go to sleep, then wake up to see if I caused any commotion.  Looks like there’s a little bit of commotion.

    Adam: you cannot analyze anything in a vacuum.  Without the media, the Presidency, the government of the United States, Barack Obama isn’t that great either.  Where is the balance point?  You pay Jeter the kind of bucks that a superstar can command, then you play him in the way that best helps the ballclub.  Right now, Jeter best helps the ballclub by starting at shortstop 140-150 games a year.  Oh, yes, it would be a good idea for the Yankees to be grooming Jeter’s replacement.

    Brien: that’s funny!  Yes, the business of “star power” is annoying on a certain level.  In the movies, I personally prefer the romantic lead’s wisecracking buddy to the romantic lead himself.  But if I had to select one player in the trenches, it would not be Albert Pujols, simply because it’s so easy to pluck a top producing first baseman out of free agency.  The tough positions to fill in free agency are up the middle, as I wrote here earlier.  You make a good point that the movies may need star power more than (say) your average baseball team in the Bronx, since every movie is a new product, while the Yankees are an established and continuing business.  But you’re wrong to suggest that star power doesn’t matter to the financial success of the Yankees.  That’s why I dragged in the example of the Red Sox.  You don’t think it matters to the Red Sox bottom line when they field a team that Bill Simmons thinks is boring?

    Brien, remember that 37 years ago the Yankees were worth less than $10 million, and now they’re worth something like $1.6 billion.  This increase in value is the result of countless people doing the right things to build the Yankees brand.  Jeter is one of these people.  Ben and Brian are right, the relationship is mutually beneficial.  Jeter is a great baseball player and a publicist’s dream, but he would not be THE Derek Jeter if he played for the Pirates his entire career.  Similarly, the Yankees would be a great draw and a financial juggernaut without Jeter, but Jeter has had a huge positive impact on the value of the team (both on and off the field).

    When I think back on the Yankees’ past, I don’t think of the organization, I think of the players.  The Mick.  Bobby Murcer.  Thurman.  Reggie.  The Goose.  The Gator.  Donnie Baseball.  These are just guys I saw play in my lifetime.  Add to them the guys from the past: Ruth and Gehrig and DiMag and Berra, and who knows how many more I can name by name.  You can argue that the Yanks would still be the Yanks if they’d won all those championships with players we can’t remember, but that’s never been how it works in the Bronx.    

    JP, I am not trying to establish causality.  The only way to establish causality is to break up the partnership and see what happens (for example, it turned out that Diana Ross really WAS bigger than the Supremes).  Brien, I’m not trying to establish who needs who more and who needs who less.  All we know is that the Jeter-Yankees relationship is beneficial for both sides.  We can spin “what-ifs” if we like, about Jeter’s current value to another franchise, and the Yankees’ value without Jeter.  But why bother?  The Yankees have the cash to retain their stars, and we fans have the satisfaction of having our core stars play for the team for their entire careers (that is, if we’re willing to be patient enough to develop these stars in the farm system).  This is a successful formula, part of what makes the Yankees what they are.  Why mess with it?

    JE, I think you made a good point.  But if Jeter is overrated, it’s because his rating is so high, not because he lacks intrinsic value.  Brian’s point back to you provides the complete picture: Jeter might not match up to all the hype, but he’s still incredibly valuable.   Oh, and regarding your last post: you could build a rental fleet out of vintage cars and probably make a very nice living, provided you had customers with Yankee-size bank accounts to pay the rental rates!

    Steve, good point!  I should have said something about players known by their first name, nickname or the first syllable of their last name.  To be honest, I am somewhat mystified by why the Red Sox aren’t selling as well this year, why Simmons would find them boring.   Ortiz isn’t interesting?  Pedroia is not grinding hard enough?  Beltre’s not performing sufficiently above anyone’s expectations?  Jon Lester’s story is not sufficiently inspirational?  Brian’s point is a good one about home run hitters commanding the attention on TV … but the Red Sox have the third-highest home run total in baseball.  Steve, you live in Boston, maybe you have some insights to share.

    Brian, thanks for the nice words.  Yeah, I watch Ichiro too.  I should have a chance to see him live in Seattle in a couple of weeks. 

    Marc, great comment!  The Yankees would be genius to sign Jeter to a contract that makes him part of the organization for as long as he likes. 

    Ben, by the way, the Forbes numbers are net of revenue sharing payments, and they don’t include the profits from the YES network.  The Yankees total revenue is a lot higher than what is being shown in Forbes.

    I apologize if I missed any of your comments, but I’m three hours behind most of you and I’m playing catch-up.

  30. Brian R.

    but his declining skills *must* be factored into the equation when the contract talks get underway, particularly as it pertains to the length of any extension. As you know, shortstop is the most important everyday position on the field; therefore, I doubt that Cashman will permit the sentimentality factor to get out of hand.
     
    As I said I don’t really care what the actual dollar amount is per year, that’s between Jeter and the Yankees.  They will sit down and come up with a magic number that works for them.  Frankly, it’s none of our business.
     
    I’m well aware of the importance of the shortstop position.  I’m also well aware of the fact that Jeter has a lot of good baseball left in him.  And how lucky the Yankees are to have a shortstop who can actually hit the ball.  They don’t grow on trees.
     
     
     

  31. Brian R.

    Larry, there are two types of articles imho.
     
    Articles that BEGIN debates, and articles that END them.
     
    This is a END DEBATE type of article, again, props.  I’m out for the day ciao.
     
     

  32. Larry@IIATMS

    German, thanks!  I hope you'll stick around, there are a bunch of good writers here.

     

    Patrick, good point.  We can't look at Jeter's experience "in a vacuum" either.  Every team needs a blend of youth and age.  Admittedly, this Yankee team has the "age" thing pretty well covered, but it's not a bad thing to have a few Yankees who played on those great teams from the 1990s.

     

    Tamar, I'd have to look it up, but I thought that the Red Sox injury bug really bit about a month ago.  Yes, they were without Cameron early on, and Ellsbury nearly all season.  Yes, they certainly weren't counting on Darnell McDonald and Bill Hall having 200 ABs each at this point, or Tim Wakefield having 16 starts.  But Youk, Ortiz, Scutaro, Beltre, Drew and most of their pitching staff has been healthy all year.  The Red Sox started slow, but they played a great May and June.  I still don't see why their fan base is not more enthusiastic.

  33. Larry@IIATMS

    JP, this has been a terrific discussion, and I'm really enjoying it.

     

    There IS no question that being a Yankee has been very, very good for Derek Jeter.  It's possible to play what-ifs, imagine Derek Jeter winning 5 World Championships for (say) the Baltimore Orioles, and wonder if he'd still have dated Jessica Biel.  Maybe not.  We can also wonder, if George Steinbrenner had forced Yankee management to trade Jeter for (say) Albert Belle, do the Yankees go on to win all those World Championships and to top the Forbes list of most valuable sports franchises.  It's impossible to know, but we can say that Jeter has also been very, very good for the Yankees.

     

    It's not necessary to debate who owes more to whom.  All we have to say is that an economic partnership like this is not going to come to an end over a few (or ten, or twenty) million bucks one way or the other.  Whatever it is that the Yankees pay and Jeter accepts will be a good deal for them both.  You can argue from this that Jeter should accept $1 a year and the parking space for the Employee of the Month, but life does not work this way.  Jeter will be paid A-Rod money, and it will still be a good deal for the Yankees, because he's Derek Jeter, and there's no one else in baseball remotely like him.  The Yankees will save money on the Johnny Damons and even the Hideki Matsuis.  But they're not going to cheap out on Derek Jeter, at least not if they want to continue the tradition of the New York Yankees, and that tradition is worth (according to Forbes) about $1.6 billion.

     

    As for how great a player Jeter is?  That's a topic for another day.

  34. Tamar Chalker

    I figured the reason the Red Sox aren’t getting as many people watching had more to do with the fact that all the recognizable players on the team appeared to be injured.  Who’s going to watch when you have random minor leaguers starting at catcher and in CF?  I don’t know if this is accurate at all, but that was my assumption.  I mean, they’ve been without Ellsbury, Beckett, Victor Martinez, even Varitek is hurt, and you know they still love him in Boston.  As far as Jeter is concerned, I think you make a compelling argument Larry and I’m inclined to agree with you here.

  35. JP

    @Larry  Just to clarify, part of this is just me playing devil’s advocate…
     
    I think at this point, Jeter is a mega-star, and he’d remain a mega-star even if he left the Yanks.  Even non-baseball fans know his name and face, and they won’t forget him just because he leaves NY.
     
    But if he’d played his entire career elsewhere, I find it almost unthinkable that he would be the national icon he’s become.  Not only does he benefit from the Yankee brand, and a huge media market, but he’s been able to play on a contender every year of his career (and if we’re lucky, that will continue years into the future).  If he hadn’t been on all those championship teams early in his career, there is no way he becomes a huge national star.  If he plays on a small market team, he’s not getting chance after chance to get big hits in October, and he’s not on national television nearly as often.
     
    I think the fact that you use Lebron James as an example of a player reaching super-stardom in a small city bolsters my argument.  Jeter is great, but he is nowhere NEAR as good a baseball player as Lebron is a basketball player.  If you’re in the conversation for most talented player of all time in your sport, and also throw up one jaw dropping highlight play after another, you can be a super star anywhere.  Jeter’s never won an MVP, doesn’t hit tons of homers, and jump-throw-play notwithstanding, is not a hugely exciting player.  His trademark is opposite field singles for crying out loud!
     
    Jeter is great, but he’ll never be, and shouldn’t be, in the conversation of all time greats.  He isn’t even the best player of his era.  He’s not even in the conversation.  I actually think Joe D is a great example in favor of my argument.  Joe was GREAT.  But that whole “greatest living ball player” nonsense?  People actually bought that, despite the fact that Ted Williams, Willie Mays and Hank Aaron were very much alive.  Joe’s legacy, and the perception of his greatness was ALSO inflated by him playing on the Yankees, and being in contention with such regularity.  Both Jeter and Dimaggio are/were clear-cut hall of famers.  But do you think Marilyn Monroe marries the center fielder for the Cleveland Indians?
     
    Jeter is naturally a marketable star, and that’s helped the Yankees in addition to all this WAR.  But how much has Jeter’s intangible value really meant to the Yankees?  Compare that to how much the Yankee brand, and the willingness of the Yankees to always put a contender around Jeter has immensely enhanced Jeter’s legacy.  Hey, it’s been, and will continue to be, a wonderful partnership.  I just happen to think Jeter has gotten even more out of it.  The Yankees paid him a good salary based on his production, and also gave him a chance to win every year (which Jeter, a true competitor, must love), and that has made him a household name allowing him to rake in millions more in endorsements.
     
    But I guess we’ll all look back at this amazing 15 year (and counting) stretch, as “The Jeter Era.”  Perhaps you’re right that that has to count for a LOT.
     
     
     
     
     

  36. Jason@IIATMS

    "…he’s going to have an awfully hard time maintaining the Myth of Jeter, and he can’t really afford that, because most of his brand is the character at this point. He’s a good, sometimes great player right now, but nowhere near the best player in the game. He can’t maintain a brand on his ability alone, he’s got to have the image."

    That's a fair comment, Brien. It takes both sides to perpetuate the Myth.  Johnny Damon's character TOLD US that he'd bolt for the largest contract. Left the Sox for the hated Yanks; left the Yanks for the Tigers…

    Bill Parcells: You are what your record says you are.

  37. Brien Jackson

    Derek Jeter is not going to get A-Rod money, that’s just absurd. And the Yankees have almost all of the leverage on Jeter at this point. If they offer him a fair deal, say 3 year $50 million with an option for a 4th, or give him the choice to take a 1 or 2 year deal with a higher salary, and he bolts for more money in, say, Detroit, he’s going to have an awfully hard time maintaining the Myth of Jeter, and he can’t really afford that, because most of his brand is the character at this point. He’s a good, sometimes great player right now, but nowhere near the best player in the game. He can’t maintain a brand on his ability alone, he’s got to have the image.
     
    Also, correct me if I’m wrong, but you’re not even a Yankee fan are you Larry?

  38. Brien Jackson

    Larry, I'm going to try to break this up into points and address them all"

    "I don’t see the Yankees offering Jeter anything less than a modest salary increase.  Pay cuts are humiliating — even if Jeter would accept a pay cut…"

    That's a bit relative though isn't it? I mean, A-Rod's contract has a series of "pay cuts" because it's front loaded, and after this year his annual salary starts decreasing. I don't hear him complaining though, and it's still the biggest contract ever. If Jeter gets a raise next year, it's either on a one or two year deal, or a longer deal that's very front-loaded and will be paying him a much lower salary 3-5 years from now. But there's no way they're committing to paying him more than he's making this year in 2013 or 2014. Nor should they.

    "the distraction that would come from the MSM hyperfocusing on Jeter’s performance versus salary during the upcoming year."

     

    That's gonna happen anyway.

     

    "Baseball players are proud creatures, and as silly as it might seem, a $5-6 million pay cut for Jeter would be a slap in the face.  "

     

    I'm calling bullshit on this one. I think the recent couple of free agency periods have demonstrated that players, especially older players, are much more interested in length and total value of their contracts than they are annual salary. Put it this way, if the Yankees gave Jeter the choice of a 1 year $25 million and a 4 year $60 million deal with an annual $15 million salary, which one do you think he'd take?

    "Let’s say, four years at $25 million per year.  As I’ve already shown, Jeter is worth this much, MORE than this much."

     

    With all due respect, that would be insane. And the problem isn't whether he's worth that much, it's whether he'll be worth that much in the 3rd/4th years of that deal. But really, that would be insane. No one else is even going to get close to that. There's giving a guy a premium, and then there's being insane. And that's insane.

     

    "  No, for the same reasons that the Yanks never cut Mantle’s pay, or DiMaggio’s.  It would have been bad for business."

     

    False equivalency; those guys played before free agency, and neither one of them ever got a contract like Jeter's present deal. Not the same at all.

     

    "As for my Yankee bona fides (not EVEN a Yankee fan?), does that matter?  Are you going to be more, or less, inclined to argue with me if it turns out I live and die for the Lake Elsinore Storm?  If so, let me know, and I’ll answer whichever way it is that causes you to disagree with me most.  Because I like our back-and-forth."

     

    LOL. For the most part, it makes no difference at all. I was just going to say that it's a bit harder to understand the relationship of a team to its fans, and vice-versa, if you're not a fan of that team. That's all.

     

     

     

     

     

     

  39. Jason@IIATMS

    Sorry Larry, but I just can’t see Jeter being paid “ARod money”. Maybe I’m the fool (entirely likely, if not possible) but I don’t see Jeter making $25m/yr x # years

  40. Larry@IIATMS

    Brien, I like your perspective on all this.
     
    I don’t see the Yankees offering Jeter anything less than a modest salary increase.  Pay cuts are humiliating — even if Jeter would accept a pay cut, I doubt that the Yankees would want all of the negative publicity that would accompany a pay cut, or the distraction that would come from the MSM hyperfocusing on Jeter’s performance versus salary during the upcoming year.  Baseball players are proud creatures, and as silly as it might seem, a $5-6 million pay cut for Jeter would be a slap in the face.  The smartest decision the Yankees could make would be to come up with a salary number for Jeter that would attract the least amount of attention.  Let’s say, four years at $25 million per year.  As I’ve already shown, Jeter is worth this much, MORE than this much.
     
    Jeter is the public face of the franchise — humiliate Jeter, and you bring down the franchise a little bit.  “Come on out to the ballpark and see a declining Derek Jeter and the Yanks take on the Kansas City Royals!”  No.  No, for the same reasons that the Yanks never cut Mantle’s pay, or DiMaggio’s.  It would have been bad for business.
     
    As for my Yankee bona fides (not EVEN a Yankee fan?), does that matter?  Are you going to be more, or less, inclined to argue with me if it turns out I live and die for the Lake Elsinore Storm?  If so, let me know, and I’ll answer whichever way it is that causes you to disagree with me most.  Because I like our back-and-forth.

  41. Larry@IIATMS

    Jason, see my comment to Brien.
     
    The main point of my post here is that Jeter is worth every dime the Yankees pay him, notwithstanding how many dimes that might be.  A secondary point is that the Yanks would be crazy to low-ball Jeter, and Jeter would be crazy to go LeBron James on us and make his new contract a front-page story.  We are dealing here with a smart team and a smart player, and they’ll do the smart thing.  My prediction is that the two sides will come up with a number that reflects Jeter’s value to the club, both on and off the field, and a number that will NOT be a continuing story in the MSM.  That requires Jeter to receive a raise.  If it’s not a raise to A-Rod levels, that’s probably OK, but no number above $25 million would surprise me.
     
    If a $25+ million salary for Jeter seems out of line, don’t blame Jeter.  Focus instead on how the Yankees’ signature player is not the Yankees’ highest-paid player.  That didn’t happen to DiMaggio or Mantle, but it happened to Jeter.  If Jeter was the highest-paid Yankee, then you could consider maintaining his current salary.  Under the current circumstances, Jeter gets a raise.

  42. Larry@IIATMS

    JP and Brien, I’ll let you guys have the last word here. Well, mostly I’ll let you have the last word.

     

    JP, I think you’re acknowledging Jeter’s value to the Yankees, even if you do think that the Yankees can get away with cutting Jeter’s salary. I can agree to disagree on that basis. I don’t agree that the Yankees should offer Jeter something modestly above what he might receive as an offer from another team. If you want to consider this from an economic point of view, then I’d argue that Jeter should be valued at his replacement cost. With Jeter gone, what would it cost to bring in a shortstop that could produce at Jeter’s level? I don’t see any top shortstops appearing in free agency any time soon (and when Hanley Ramirez hits free agency, he’s going to make a boatload), and what is the cost of replacing the face of the franchise?

     

    Brien, as usual you make your series of great points, but I can’t think of anything new to say in response to them. I DO think that you and I disagree on Jeter’s inherent value. As for superstars taking pay cuts in the era of free agency, yes, I suppose it does happen, though I think it happens most often when a player changes team, or when it’s clear that the player is washed up. I’m looking at the salary history of Ken Griffey Jr.

  43. JP

    @Larry
    “Jeter will be paid A-Rod money, and it will still be a good deal for the Yankees, because he’s Derek Jeter, and there’s no one else in baseball remotely like him.”
     
    I have to disagree with this.
     
    Let’s say you’re right, that even with an A-Rod type salary, Jeter’s on-field production + intangible popularity value is so great that the Yankees still come out ahead.  That doesn’t necessarily make it a good deal.
     
    Imagine instead that the Yankees want to make a renovation to the stadium that will add $10 million in revenue.  Normally, completing this renovation costs $2 million.  Is it a “good deal” if the Yankees end up paying $5 million, just because they still profit?  Absolutely not.  It would be a very bad deal because they grossly overpaid.
     
    Jeter is an old SS, and unless he picks up his game, this will be the worst hitting season of his career.  The market isn’t going to be strong for a player like Jeter, unless he goes on a tear down the stretch (or has a monster post-season).  He’s the $5 million renovation that should be bought for $2 million.  Or rather, a $14 million player that could end up getting paid $20 million or more.
     
    I also don’t buy for a second that Jeter’s popularity and ability to create fan interest will wane if the Yankees fail to wildly overpay him.  I doubt the casual fan even knows how much he makes (readers and writers of this blog after all, are huge baseball nerds).  The extent of his popularity isn’t a function of how much he’s paid.
     
    As a fan, the only reason I care about this is because I want the Yankees to have the best baseball team possible, year in year out.  I also think most fans, be they casual or die-hards, also care about winning more than anything else.  Maybe the Yankees can overpay Jeter, and still add any and all free agents they want, and pay fat bonuses to obtain strong prospects.  But if not, then it’s not worth compromising the product on the field, just to avoid bruising Jeter’s ego.
     
     
     
     

  44. Mark Stevens

    Guys….Plese.  Get a grip.  Jeter will retire a Yankee.  He will come to a mutually agreeable contract with Cashman and Hal Steinbrenner, and it will be done quietly — NOT played out in the media.  Jeter IS a special case, he is the Face of the Yankees.  BUT, Jeter is not an idiot.  He is very protective of his image and won’t try to grab every last Dollar that he can squeeze.  The Yankees management will not purposely lowball him, as that will only endanger Goodwill with the fans.  Same goes for the Rivera negotiations.  Now, can we PLEASE close this pointless discussion?  Thanks.

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