How the Yankees have fared on their big contracts

While its fun to speculate, the reality of the Yankees hot stove situation is that Derek Jeter and Mariano Rivera will be jerks about this, but they’re not going anywhere, and it is unlikely that Cliff Lee lands anywhere else because few other teams in baseball can pay anyone $25 million a year. Only the Yankees can stop the Yankees. If the team is willing to expand its payroll about $25 million then all the team’s offseason targets will eventually come under tow. If it’s unwilling to expand its payroll then Yankee fans will still have one hell of a ballclub to root for in April.

Given that I believe Cliff Lee is about to become the latest Yankee to join the ranks of the amazingly overpaid, I began wondering how the Yankees have fared on these budget buster deals. Baseball wise this is the right move, especially for a ball club that can eat a bad season or two as well as the Yankees can. But how have the Yankees fared on their budget busting contracts financially? Let’s take a look.

All data are from both Fangraphs and Baseball Reference, where salary data wasn’t published on Fangraphs.

The flagship big Yankee contract hasn’t been that good an investment for the team. 2006 and 2009 were the only seasons Derek was worth more than his salary. Most seasons he was just a few million below his paycheck, the kind of money I’m sure his iconic status earns the Yankees in marketing dollars, but this past season he was eight figures below his pay grade. But, by all means, give him a raise.

Remember him? Apart from maybe Mike Hampton, no player embodies the notion of “buyer beware” more than Jason Giambi. The Giambino was as-expected in pinstripes for all of one season. After that he suffered from everything from steroid withdrawal to intestinal parasites. Mostly, his batting average fell off a cliff and the Bombers couldn’t play him in the field.

Fangraphs only provides value data as far back as 2002. If it went back further it would show that the Yankees actually got quite the return on Moose because he was excellent in 2001, his first season in Pinstripes. It never felt like the Yankees had an ace in Moose. I think of him as something of an also-ran Yankee. The numbers suggest otherwise. He was certainly paid like a Yankee, and he played like one too, the first player to earn his value so far.

The Yankees didn’t sign Alex Rodriguez to his first monster contract, but was on the team for a fair chunk of it. Alex has been dominant on the baseball diamond every season of his career in the Bronx, and the Yankees have lost money. He’s a testament to why fans of other teams hate the Yankees. The team can afford to lose money on him, season after season. Even if we remove 2010, his worst season as an every day player, the Yankees would still be just below even on their investment in A-Rod.

What a difference a year makes. In 2009 Mark Teixeira was the Yankees best player. In 2010 he was a solid hitting, excellent fielding first basemen, and a sunk cost. Tex’s salary will only go up from here, meaning that he has to perform at 2009 levels for the remainder of his contract if the Yankees are going to see a positive return.

This is more of a joke than anything else. If you were as bad at your job as A.J. Burnett is at his you’d be fired.

Fangraphs’ value data are always a bit suspect. CC Sabathia‘s 2010 may be why. What is certain is that pitching improved across baseball in 2010, while CC largely stayed the same, which is to say he remained phenomenal. The problem is that even phenoms may not be worth $24 million, which is what the numbers suggest. CC is due to be paid $23 million the remainder of his contract. There is an excellent chance the Yankees will at least break even on him.

The big take away from all this is that baseball players, even the great ones, are seldom worth $20 million or more a season. That’s why, really, only the Yankees pay them at those levels. Cliff Lee is a great pitcher, but only two of the players listed above have generated positive returns in the Bronx, so the most basic odds suggest he’s about to get overpaid. If you’ll excuse me, I’m going to go hug a Pirates fan.

6 thoughts on “How the Yankees have fared on their big contracts

  1. Glad you approve. I considered including other high profile contracts that weren't in the $80 million or more range, but I felt that would have been too many. There are also some memories that are better not to revisit, such as the nightmare that was Carl Pavano in pinstripes.

  2. Giambi was a good guy to have on the team for the most part, but not worth what he was paid, as Mike clearly points out. sigh… $100k a walk sounds about right…I remember many fans complaining about how poor Randy Johnson's production was, but he was still the best starter on the team at the time…Outside of the Nationals, I would guess the Yankees/Mets have the highest cost of living amongst MLB teams, but then, when you make millions of dollars, that's kind of a crappy argument…Oh well. I guess I don't care what the Yankees payroll is, as long as it doesn't prompt MLB to create a salary cap.happy thanksgiving!~jamie

  3. I have read that top free agents tend to be overpaid relative to their value. Even AJ's ridiculous overpayment could be partially justified because they needed him to win a championship in 2009.By that standard, Jeter's vlue at 86% of cost isn't bad and ARod's 91% is OK.

  4. Very interesting post, I enjoyed reading it a great deal. One thing that stood out to me in the methodology is the value per win that was used. From my understanding, Fangraphs calculates the average value per win that teams are willing to pay for free agents, which makes sense in most instances. However, when looking at the Yankees, there is likely a completely different valuation that occurs since the Yankees not only expect to win in the regular season but also the postseason. Also, given the premium that the Yankees recognize that they need to pay top tier free agents, I would assume that that Yankees value a WAR at a much higher value than the average MLB club. If this is true, then perhaps some of these contracts would look far better to the Yankees than the fangraphs data indicates.