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The Yankees have re-signed Derek Jeter to a one-year $12 million deal. The team's captain had a $9.5 million option he could have evoked, but this new deal will replace that contract. The extra $2.5 million the Yankees give him is not a huge deal, but it seems completely unnecessary. As head scratching as this move is, Steve Adams at MLB Trade Rumors know the answer:
By agreeing to a new deal, Jeter is no longer on his old contract, the average annual value (AAV) of which counted against the luxury tax. By exercising a $9.5MM option on a three-year, $51MM contract, Jeter would've locked in his AAV at $15.125MM. Instead, his $12MM contract will be the number that counts against the luxury tax, thereby actually saving the Yankees $3.125MM relative to the luxury tax.
So the Yankees help out Derek Jeter while helping themselves as well, however another $3 million extra is hardly going to change the Yankees' payroll concerns for 2014. Whatever the reason, Jeter is not worth $12 million on the open market.
The Yankees were expected to try and find someone who could make up for the time Jeter could spend on the DL this season, but a contract like this is going to scare away almost any player that's worth a look. No one is going to sign a contract with the Yankees to play second fiddle to Old Man Jeter. It seems like the team is perfectly content pretending that there are no questions surround Jeter's health. It remains to be seen if they'll find a way to set up a back up plan beyond Jayson Nix and Eduardo Nunez.
UPDATE:
Source: Deal was struck afer Jeter and Hal Steinbrenner had conversations. Hal agreed to give Jeter a little extra dough because he's Jeter
— Andrew Marchand (@AndrewMarchand) November 1, 2013
Of course they did. Because asking him to just sign to a $9.5 million contract to help the organization compete would have been way too much. What a team player that Jeter is.