Could Jeter just walk away?

Rob Neyer touched on a subject that few others have even dared to speculate about, but I must admit it’s something I’ve been kicking around myself the past few days. Here’s what Rob said:

I haven’t seen Derek Jeter‘s portfolio. I’ll guess that even a paltry $45 million (before taxes) does mean something to him, but it’s quite possible that it doesn’t. Or that it does, but not as much as his foolish pride.

I still think everything will work out OK in the end. The Yankees will move some, Jeter will move some, and everyone smiles a lot and says all the right things when the shortstop gets his $19 million per season. It’s like Sam Goldwyn said about one of his movie stars: “We’re overpaying him, but he’s worth it.”

It might not work out OK in the end, though. Either way, I’m reminded of how many pundits were so sure, just a few weeks ago, that of course Derek Jeter would never leave the Yankees. Something like that would be impossible.

Except it’s really not impossible, and never was.

I agree completely, it’s not out of the realm of possibility. It’s not as if we haven’t seen athletes walk away from the game with something left in the tank. Jermaine Dye and Jarrod Washburn did it as recently as last year. Joe DiMaggio did it. Michael Jordan did it twice. The cases of DiMaggio and Jordan are most comparable to Jeter. Both were iconic stars, the trappings of fame wore on them as they aged and they pined for an easier, simpler life.

What made me wonder about this was the 23-24 mil per year Derek is asking for. It doesn’t seem to be based on his value as a baseball player in any way. We don’t know much about Derek’s personal finances, but we do know some. He earns around 9 mil per year in endorsements according to Forbes. He’s been paid a total of 205 mil by the Yankees. Let’s say his endorsements roughly cover his tax bills, and he’s lived on the investment income his money generates. Let’s just assume for purposes of this discussion that Derek has held onto his gross baseball earnings. The days of the easy 10% return are gone with the real estate crash, but a smart money manager (which I’m sure Derek has) should still get you 6-8%  annual return blending stocks, bonds and emerging markets without taking too much risk.  If these numbers are anything close to being accurate, Derek could be earning 14 mil per year on his money alone, plus his 9 mil annually in endorsements that isn’t going anywhere even if he retires. That might explain why he’s asking the Yanks for 23-24 mil per. He could sit down with Hal and say “Look, I earn 23 mil per year without even playing Baseball. In order to make this worth my while, you need to match that.” We have all assumed the Yanks have the leverage in these negotiations, but Derek may hold the trump card after all. He may simply walk away.

Much has been made of his pursuit of 3000 hits, but if we know anything about Derek it’s that he’s not motivated by numbers. Every time he passed a milestone of some sort and asked what it means to him, he would retort “It means I’m getting old”. Does Derek love the game so much he wouldn’t walk away from it? I don’t know about that. Alex Rodriguez once recounted a story about how Derek doesn’t even watch the playoffs once the Yanks are eliminated. His place in Cooperstown is secure, with or without a 3,000th hit. He’s already one of the best hitting Shortstops who ever played the game.

Let me close with a story about my father. He was a Wall Street executive at a major firm. While he retired before the money got crazy in the mid-2000’s he still did well enough to provide his family with an upper-middle class lifestyle. As he got older he would often discuss retirement, saying “I make more now on my investments than I do in salary.” That made him wonder why he was fighting traffic, cramming himself into a subway car, and dealing with all the headaches that were waiting for him at the office on a daily basis.  Derek may be asking himself a similar question, and asking him to take a pay cut at this stage of his career may be something he is simply unwilling to do.

0 thoughts on “Could Jeter just walk away?

  1. Hi. You need to learn to make logical analogies. (1) Jermaine Dye and Jarrod Washburn are not icons. (2) Your Dad, who may well be salt of the earth, doesn’t have 50,000 people chanting his name.

  2. It’s not just the money — it’s what the money represents. That’s why Jeter wants A-Rod type money. But if Jeter persists in asking for an even bigger home town premium than is on offer now, and he takes LESS money to play for another team, his image will be forever tarnished. That’s why I think he eventually takes something close to 3 yrs/$45 million from the Yanks. The key is not giving him that 4th year — I think they can give him a little more money so his agent can declare victory.

    • The A-Rod comp just doesn’t hold. Alex made 32 mil last year, if Derek wanted to be paid like Alex he’d be asking for that number.

      What made me wonder about this was the 23-24 number. It doesn’t seem to be based on his value as a player in any way, shape or form. Just doing some quick calculations in my head, it sounded like the kind of number he could be making without playing Baseball. Doing a bit of research and making some reasonable assumptions, it’s very possible it is.

    • I think Derek’s bat has slowed as well, but it begs the question ‘Who’s your SS?’


      • There are any number of trades that could be made. The farm is deep and with several guys coming off break-out seasons a trade for a ML-average SS is very doable.

        If Cashman wants to aim higher and trade for an established, productive SS, like ohh…. JOSE REYES… that’s doable too.

        Cashman doesn’t have to pay DJ 22-23 million a season. He’s got no leverage. NONE. NADA. If he doesn’t want to sign the 3/45-52, then its time to just walk away.

        • The Yanks and Mets will never make a trade of that significance. GMs are hesitant to make deals in division, in town is out of the question. Too dangerous for both GMs.

          • They have a new GM and they have one of the worst farm systems in baseball if they could get prospects they’d trade anyone anywhere, would they jack up the price for an instate trade? probably, if someone else wants him but if the best offer comes from NY they would do it IMO.

            I think it would be highly unlikely that they would trade for someone like that though if Jeter walked, they would at least use Nunez and Pena this year and maybe sign a Jerry Hairston Jr type for the bench.

    • I’d rather have Reyes than Drew, when he’s on he can be a complete game changer! You can have him bat lead off or 2nd in the order to use his speed and he’s got enough power in his bat to put balls out of the yard, having Gardner and Reyes at the top of the lineup could really cause some havoc.

      Drew is a decent player but he isn’t the same possible force Reyes can be, Reyes does have some concern since he isn’t that far removed from injury but with JD Drew’s injury history I often wonder if Stephen is a safe bet long term because of possibly having a genetic predispition to injury.

  3. It seems that everyone forgets that the Yankees have won the World Series with many rookies playing considerable time at SS.

    Jeter, Rizzuto, Crosetti, Kubek, and Tresh…so why can’t they win with Nunez?

    • If he did retire I think we could win a WS without him this year I mean yeah we would lose some offense but given his production last year should have been hitting 9th against RHP and that is where Nunez would hit, I know some don’t like his defense but he Nunez has better range than Jeter and his arm seems much stronger. The real advantage wouldn’t be in the defensive upgrade however it would having 18 million dollars of flexibility within the payroll, we immediatley be in the bidding for some of the better bullpen pieces including bringing Wood back.

  4. I think part of the issue here is that Jeter’s numbers last year were so bad, he simply wasnt that much better than an average AL shortstop. (slightly better offense, worse defense.)

    Is it really that hard, even in a weak position, to find a player who can hit .260, 4-7 HR in Yankee stadium, around a .320 OBP who can play average defense.

    If we got such a player, how much worse off would we be?

    Again, part of the issue here is that Jeter’s production has gotten to a point that it is fairly easy to replace most if not all of it. There are a whole bunch of guys who produce kind of one level below Jeter does now. If the difference between that hypothetical .255-260 hitter and Jeter is 16 million dollars, is that really worth it.

    The (sad) reality is this a .270 hitting middle infielder who plays below average defense is fairly replacable.

  5. To me it doesn’t fit, if Jeter had started losing love for the game wouldn’t he just be asking for 23-25 million a year for 2 or 3 years and not 4-6? I just don’t understand why you would be demanding to commit to that long a contract and your only real motive is money, seems like if he can rake 23 million off the field he would just retire if he didn’t care about playing.

    I would bet money that if the Yankees stayed firm on this offer and Jeter had to sit and think until spring training rolled around he’d play for 3/40, there is no way he walks away short of 3,000 hits he already has proven how big his ego is.

    • If he’s thinking about this in financial terms, it might be “I’ll play for another 100 mil, but another 45 (which is 20-ish after taxes) just doesn’t get me excited”. Again, he might be earning that much without even playing.

  6. I don’t see his endorsement deals maintaining the same value if he doesn’t play. I don’t see him turning any more of the money he makes from what he already has by not playing (does he have any special ability that his financial advisors don’t?)

    I can’t see him replacing the 15 mil he’d make next year by not playing, let alone in three years when his endorsement bucks are disappearing.

    I don’t see him walking away, but I agree that it’s pretty far from the end of the world if he does. Like a lot of folks have said above, we’d have a lot more money to use elsewhere, and getting a replacement capable of coming close to what he’s likely going to do in 2011 (let alone 2013) shouldn’t be that hard. I’d love to have a league average defender at SS who doesn’t lead the league in HIDPs.

  7. I wonder if the Yankees themselves have somewhat mixed feelings here? If Jeter retires, or leaves in a huff and the fans blame Jeter, will Cashman lose that much sleep?

    Its true that they dont have any great options to replace Jeter. Its also true its not that hard to replace a hitter who hit .270 and played poor defense. (And even to the extent that they cant get a shortstop who can hit .270 next year, if they can get one who hits .250-.260 but plays better defense, is that really a significant drop off?)

    Put another way, given the decline in Jeter’s production in many ways its as if they have already lost him, at least the player he was.

    And even if he bounces back next year, how much confidence can we have he will be better in ’12 then he was in ’10? (How many non-steriod using players have done better their age 38 year then their age 36 year?)

    And if Jeter does decline further, what do the Yanks do with him? If he cant play short anymore, do they really want to pay him 15-20 million a year to try LF? Why would they pay him 15-20 million to hit .250 in LF when you can get a legit corner outfielder fairly cheaply. (Especially if you are willing to accept that kind of production.)

    I am frankly nervous about a 3 year deal, a four year deal is insane.

  8. Yeah, I’ve been wondering if Cashman would be happy if Jeter’s demands gave the Yanks cover to turn the page on him. In a 3 year deal, he would have one decent year, one bad year, and one riding the bench. For 45 million plus?