Fairservice: How Derek Jeter's raise actually saves the Yankees money
Derek Jeter played a mere 17 games in 2013, hobbled by an ankle injury suffered in the 2012 playoffs. He looked a shadow of his Hall of Fame self, recovering slowly and disappearing quickly as his nagging bumps and bruises persisted.
Given his age and track record of health, Derek Jeter doesn't profile as the kind of player due for a 33 percent increase in pay. The $9MM option seemed more than sufficient for a potential part-time player and shortstop who long since outlived his utility as a middle infielder.
But, as always, there is more to this signing than what we see on the surface. As per the conditions of the current MLB collective bargaining agreement, picking up the 2014 option on Derek Jeter's contract would make his salary for next season part of the deal his signed in 2009.
Paying $9MM for Jeter in 2014 would bring the total value of his contract to $60.5MM over four years, which works out to an annual average value of $15MM.
As per the CBA, that means the Yankees carry a $15MM tax hit in 2014. By declining the option and paying Jeter $12MM in 2014, it actually lowers their tax burden for next season.
This $3MM is not an insignificant amount for the Yankees, who went to great lengths to get under the $189MM luxury tax threshold last season. With the money they owe Mark Teixeira, CC Sabathia, Alex Rodriguez et al - not to mention the upcoming Robinson Cano contract - every penny counts.
So the Yankees pay for Jeter more in order to get taxed less. A $3MM surtax on avoiding the significant penalties put in place. A perfect and creative way for a big budget team to use their financial heft to their advantage. And the player (minus some performance bonuses), benefits, too.
Everybody wins! Except Yankees fans who think this is anything more than a make-good deal for their once great captain. Let the victory lap around the league begin!