The Red Sox have just signed David Price to a seven-year, $217 million contract, but what does it mean for the Yankees? Whatever it means, you can't say they should have matched that figure because that's the largest free agent contract ever signed by a pitcher, passing Max Scherzer's record deal from last offseason. $31 million a year is a lot to spend over the life of that contract and it just doesn't make sense for the Yankees to try to surpass it when everything they've done up to that point has been to decrease payroll (which is a sad reality by itself).
What the deal does mean for the very near future is that everyone's expected price tag has gone up now that the absolute max deal has been set and signed. Neither Johnny Cueto or Zack Greinke will be getting a deal like that, but after Jordan Zimmermann set a base price of $110 million over five years, it means the sky might be very literally the limit for their bank accounts. Cueto has already rejected a six-year, $120 million deal from the Diamondbacks and Greinke is said to be seeking a $30 million per year contract, so it doesn't sound like the Yankees, who have no money coming off the books, and no desire to up payroll, have much to offer either pitcher.
That doesn't mean the Yankees don't need another starting pitcher as their current rotation isn't exactly set in stone. With the Price deal, the Red Sox have added the best pitcher on the open market, so New York might respond in kind by being more aggressive on the trade front. They could become more desperate to move Ivan Nova and could explore trading Michael Pineda in order to make room for a better pitcher, but given the state of Boston's rotation and the rest of their roster after finishing last in the division in 2015, it would be ill advised to make a move simply as a response. The last time the Yankees did that, they signed Kei Igawa. As much as the David Price signing might hurt the Yankees, they need to continue with their offseason plan the way they want to do it, wherever that may end up leading.
Don't think this is a longterm division-changing move, though, because it's definitely not. Of course Price improves the Red Sox in 2016, but the contract locks up Price for three years and then allows him to opt out after the 2018 season. He will opt out after the 2018 season. He will be 33 in 2019 and a new contract should sign him right up to his age-40 season. If he doesn't, it's because the Sox gave him more money or something has gone terribly wrong. Both scenarios are good for the Yankees. The overall number is intimidating, but when everything is said and done, this deal might only amount to a three-year, 93 million contract.
It doesn't feel great to be a Yankees fan and hear about the Red Sox signing the best pitcher on the market, but it's not as devastating as you might believe. Free agent deals have not worked out for Boston recently, and though this one should be a lot more successful, it's much more likely that he won't be around for the entire life of the contract. David Price will probably be out of town before they can get rid of Hanley Ramirez and Pablo Sandoval (if no one helps them out like last time). The Yankees will figure out their roster with all their up-and-coming young players, but the solution won't come to them by responding wildly to a deal that doesn't singlehandedly change the dynamic of the league. After all, David Price didn't make the Blue Jays World Series champs and it certainly won't make a much weaker Boston team division favorites just yet. Things are still wide open.