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The Lowdown on Yankee Contract Incentives

It's always about the money

The contract committee
The contract committee
Jim McIsaac

Here's a breakdown of the performance incentives some of the New York Yankees enjoy in their contracts. Sometimes they can be based on awards won, games played, innings pitched, or plate appearances reached. Derek Jeter, Brett Gardner, Travis Hafner, Mariano Rivera, Curtis Granderson, and Alex Rodriguez all have major incentives loaded into their contracts and here they are.

Derek Jeter signed a three-year $51M contract with a 4th option year before the 2011 season. The $8M option has several incentives attached to it, which could make his 2014 season worth as much as $17M. Between 2011-2013 he will be rewarded $4M for being receiving the American League Most Valuable Player Award, $2M for placing 2nd-6th in the MVP rankings, $1.5M for a Silver Slugger Award, and $0.5M each for a Gold Glove, ALCS MVP, and World Series MVP. If 2014 comes along and he hasn't made that full $17M yet, he can make as much incentive money as he can in that year until he reaches $17M.

So far throughout the life of his contract he's made one All-Star appearance (2011), which doesn't carry any incentive money, finished 7th in MVP voting (2012), which is outside the stated range, and won a Silver Slugger Award (2012). At the moment his option for next season has been bumped up to $9M and could increase between the 2013 and 2014 seasons, since he has plenty of incentive money that he can still obtain.

Brett Gardner is still in his arbitration years, yet his one-year contract has been laced with plenty of incentive money. At the moment he is guaranteed to make $2.85M for the 2013 season, but he could also make more depending on the amount of plate appearances he can reach. The incentives serve as a way to motivate him to stay healthy throughout the season and hopefully convince him to stop sliding headfirst into first base.

Gardner can make $25,000 every time he meets one of his contract milestones. After he meets 375, 400, 425, 450, 475, and 500 plate appearances he can make up to $0.15M to bump up his final 2013 salary to an even $3M. If he can stay healthy like he did in 2010 and 2011, he will easily be able to meet all these marks.

Travis Hafner is an injury waiting to happen and keeping him off the field and in bubble wrap is a good way to keep him healthy. His one year $2M contract with the Yankees is packed with incentives based on the amount of plate appearances he has in 2013. Hafner can make up to $4M in performance bonuses and will receive $0.1M each for 50, 155, 170, 185, 200, 215, 230, 245, 260, 275 plate appearances. He can then make $0.125M each for 290, 305, 320, 335, 350, 365, 380, 395, 410, 425 PAs and then $0.175M each for 440, 455, 470, 485, 500, 515, 530, 545, 560, 575 PAs.

If Hafner can somehow defy the most likely outcome, he could make a total of $6M when everything is all said and done. Unfortunately for Hafner, he hasn't surpassed 575 PAs since 2007. He hasn't reached even 455 since 2010. Last year he only had 263 PAs and would never have even reached the second tier of incentives he will enjoy this year. Hopefully he makes more money than less money.

Mariano Rivera signed a 1 year $10M deal for the 2013 season, which might end up being his last. Rivera is heralded as not only the best closer of all time, but the most dominant pitcher in the playoffs and the Yankees want to make sure that he stays that way. Not that Mo needs any incentive to convince to keep doing what he does, his contract does contains several built into it.

He can receive $0.5M for receiving the ALCS MVP Award, $1M for the World Series MVP Award, and $1M for the Rolaids Relief Man of the Year Award. He's won all three awards within the span of his career, but never in the same year, so it's unlikely his contract gets bumped to the full $12.5M. He did win the ALCS MVP in 2003, the WS MVP in 1999, and the Rolaids Relief Man Award in 2005, 2006 and 2009, so if the Yankees are good enough he can definitely make it happen.

Free agent-to-be Curtis Granderson is in the option year of a deal he originally signed with the Detroit Tigers. As part of the terms of the vesting club option his original $13M was upped to $15M after his insane 2011 season where he was a top five MVP candidate. On top of that money he can still make several award-based incentive bonuses that amount to $375,000.

If Granderson is an All-Star in 2013, he'll make $25,000, which he can get if he can avoid another season like 2010. He can make another $25,000 if he wins a Gold Glove, but he's never actually done that before and will definitely not start doing that now. He can get $50,000 for winning a Silver Slugger, an award he won in 2011, so it is possible, depending on what position he ends up playing. He can also make $75,000 for being the ALCS MVP, $0.1M for being the World Series MVP, and another $0.1M for being the AL MVP. He's never won any of these awards, but if he puts up another season like 2012 and the Yankees get him through the playoffs, it could definitely happen.

Alex Rodriguez still has $114M owed to him. He also has the deferred payments of a $10M signing bonus on top of that, which has been paid in $1M annual increments since 2009. He received $1M in January and will receive a final payment of $3M in 2014, so A-Rod really has $118M in guaranteed money coming his way.

The non-guaranteed money is all held up in home run milestones, which add up to $30M total. He will receive $6M each for 660 (Willie Mays), 714 (Babe Ruth), 755 (Hank Aaron), 762 (Barry Bonds), and 763 home runs. Yes, A-Rod has one home run that is worth $6M by itself.

Right now he is at 647 home runs and only needs 13 more to have his incentives start to kick in. That means until he reaches that mark each home run is essentially equal to a little over $460,000. Then after that it will be 54 home runs to his next milestone, making each home run worth just about $111,000 each. Then it will take another 41 and each of those home runs will be worth around $146,000. He'll only need seven home runs to tie the home run record at that point, which will amount to $857,000 per home run.

All in all, A-Rod needs 116 more home runs to be crowned home run king and make a total of $148M along with it. To accommodate A-Rod's last 116 home runs you would have to go back to partway through the 2008 season. He has another five years left on his contract, so if he can hit somewhere around 23-24 home runs a season he can make it. However, with his decreased power in the last two seasons it may be likely that he never makes it that high. He'll definitely make some of that money, but only time and his health can tell just how much.

Thanks to Cot's Baseball Contracts