Should the Yankees Make Robinson Cano Baseball's First $300 Million Player?

The New York Yankees 2013 season reaches a merciful conclusion today in Houston. The team comes into the day with 84 wins, which for an average franchise would be considered a successful season. However, with 17 playoff appearances in the past 19 seasons, 27 world series, and a $225 million-plus payroll, anything less than 90-plus wins and a late October run is seen as a failure for the Yankees. 

Yet, as much as the Yankees would like to forget this season and look forward to the future, this week was a cold reminder that next season has plenty of unknowns. Robinson Cano, far and away the best Yankees player this year, is a free agent this off-season and is reportedly seeking a 10-year contract that would pay him $305 million. That's a figure well beyond what the Yankees are prepared to offer. Can the Yankees afford to let Robinson Cano sign with another team?

Old men, big contracts

The most glaring reason the Yankees under-performed this year is a roster bloated with aging players frequently on long-term contracts. Between Alex Rodriguez (age 38), Derek Jeter (39), Kevin Youkilis (34), and Mark Texiera (33), the Yankees paid $82 million for a group of players that entering today had played just 104 games. 

To put $82 million in perspective, if we created a new baseball team out of those four players (the New York Geriatrics?), they would rank as the 21st highest payroll in baseball, just edging out the entire Minnesota Twins payroll. The Yankees contracts add up to roughly $228 million this year, according to Baseball Prospectus -- remove the payroll of those four players and the Yankees payroll suddenly is "only" the fifth highest in baseball. Right above the Los Angeles Angels, the San Francisco Giants, and the Toronto Blue Jays. All three of those teams will finish the season below .500 and miss the playoffs as well. The key point here, a few bad contracts can easily take away the Yankees' ability to outspend other teams. 

10-Year contracts don't have a pretty history

Robinson Cano is a unique player. He's a dynamite offensive player at a position --- second base -- not known for producing power hitters. If he can stay healthy and play late into his career, he'll likely be the best offensive second baseman since Rogers Hornsby all the way back in the 1920s. Not only that, but he's a marketable player for the Yankees. Unlike other big contracts on the team like Alex Rodriguez and Mark Texiera, he's a lifetime Yankee. With the sun setting on Derek Jeter's career, Cano can become that next quintessential lifetime Yankee.

Show me the money, Cashman. 

The biggest problem isn't Cano's lifetime batting average or marketability, instead the problem with Cano's contract is that it risks keeping him on well beyond his prime. The Yankees are keenly aware of the risks signing players in their 30s to long-term contracts, having recently made that mistake with Alex Rodriguez. In 2007, the Yankees signed a 10-year deal with the slugger. At the time, Rodriguez was playing at an extremely high level; he'd just won his third MVP trophy in the previous season. However, the deal would keep him on the Yankees roster through the age of 42, an age at which non-pitchers simply don't play at a high level as aging and injuries take their toll. 

Not surprisingly, Rodriguez's play has fallen off dramatically. In fact, as ESPN's Stats and Information found out, every MLB player who has signed to 10-year contracts has seen a performance fall-off after signing their contract. The latest cautionary tale is Albert Pujols, who signed with the Angels at the age of 32 and has seen the worst two seasons of his career after the contract. 

Could Cano Be Different?

Cano will turn 31 next month, making him slightly younger than Pujols or A-Rod when they signed their mega-deals. However, one consideration is that second basemen don't have a long history of playing at high levels deep into their careers. Roberto Alomar, who is widely considered the best all-around second basemen of the era, saw his stats precipitously fall off at the age of 34. Likewise, Ryne Sandberg's hitting ability collapsed at the age of 34 as well. 

The Yankees know the rocky history of second basemen entering the back stretch of their 30s and have reportedly offered Cano six years for $144 million. Obviously, that's an offer that leaves Cano and the team far apart. The important consideration here is that Cano bolted from super agent Scott Boras to sign with Jay-Z's new agency. Both he and his agent want to make a splash with a record contract. If the Yankees aren't willing to go 10 years, some other team will, and they'll deal with the consequences of having an aging over-the-hill star weighing down their payroll seven years from now. 

Luxury Taxes

The baseball luxury tax is currently set at $178 million, meaning every dollar a roster is over that amount comes with a 50% surcharge. According to USA Today, this year the Yankees will have a luxury tax bill of $29.1 million. That adds another interesting wrinkle to signing Cano. As habitual luxury tax offenders, the Yankees' total bill for Cano would be even higher because they'd also be paying taxes on top of his salary. Compare that to a potential suitor like the Tigers, who are still below the tax, or a dark-horse like the Orioles who are well below being subject to a luxury tax. 

The bottom line here is that any 10-year deal with Cano will likely leave some team saddled with vastly diminishing returns for half the contract. As the Yankees found out with A-Rod this year, those "worry about that payroll later" deals eventually come back to haunt you. Don't be surprised if even the big-spender Yankees are willing to let Cano walk if another team dangles a big 10-year deal. 

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A previous version of this article incorrectly stated the Yankees have made 19 straight playoffs. They missed the playoffs in 2008. We've corrected the article. 


Read/Post Comments (21) | Recommend This Article (16)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On September 29, 2013, at 4:19 PM, garetjaxx11 wrote:

    Considering he isn't even the best player in baseball I would tend to think he is not even close to getting a contract like that.

  • Report this Comment On September 29, 2013, at 5:07 PM, mbdeane wrote:

    Let him go. Those $200 million plus deals don't work out for the teams at all: Pujols, Hamilton, Rodrigues, Sabathia et al.

  • Report this Comment On September 29, 2013, at 5:34 PM, d42chad wrote:

    Those contracts are the dumbest thing anyone could possibly offer. Just like @mbdeane said. Big name, big contracts, poor results. Include Votto in on that too. He might have been NL OBP leader but one of the leagues "best hitters" should have a few RBIs espeially with Choo (NL 2nd best OBP) batting ahead of him.

  • Report this Comment On September 29, 2013, at 5:58 PM, GOLDBERG2013 wrote:

    As good as a player as he is, Nobody in any Sports in worth this kind of money.

    Everyday people that bust their butts to make ends meet, deserve this and more.

    Even the President of the USA doesn't make this kind of money. And he makes decisions that effect us all, whether you like them (demo's and repubs) or not.

  • Report this Comment On September 29, 2013, at 6:05 PM, JHill2583 wrote:

    Give him $5 mil a year guaranteed, with performance incentives where he could earn up to $35mil a year

  • Report this Comment On September 29, 2013, at 6:18 PM, MomentousMariano wrote:

    Thanks, Mr. Bleeker, for paying respect to the New York Yankees' 27 World Championships. But you have also given more credit than is due to the Bronx Bombers. They have not made "19 straight playoff appearances." They missed the playoffs in 2008, the last season in the "old" Yankee Stadium and Joe Girardi's first season as manager of the Yankees. But General Joe guided his pinstriped players to the World Series trophy the next season.

  • Report this Comment On September 29, 2013, at 6:25 PM, TMFRhino wrote:

    Momentus,

    Thank you for catching that. Will get the article updated!

    Best,

    Eric

  • Report this Comment On September 29, 2013, at 6:38 PM, Job48 wrote:

    31 and $300 mill? Can he pitch, play the other 7 positons? Even the Yankees aren't that crazy. Rodriquez wasn't worth the money either, considering what the Yanks got out of the deal.

  • Report this Comment On September 29, 2013, at 6:39 PM, YeahYeah22 wrote:

    Terribly sorry, but the Yankees haven't made the playoffs for the last 19 years straight. You have conveniently forgotten 2008 when they finished in 3rd, 8 games back of the Rays and 6 back of the Red Sox.

    That being said, I think everybody knows that Cano won't get $30 million. I doubt he'll get $25 million. It's a different time than when those huge contracts were being signed, and teams are smarter than they used to be. It's just not worth $30 million to get Cano-type performance when you can get 15-20 HR, .260-.280 type hitting for a fraction of the cost elsewhere.

  • Report this Comment On September 29, 2013, at 7:42 PM, strifle wrote:

    No

  • Report this Comment On September 29, 2013, at 8:46 PM, terrifick wrote:

    i don;t think any player is worth this kinda $unless they can play all 9 positions,,u could probably get 6or7 players that can do what he does..if he gets that kinda money i hope the yankees never ever get to the world series again..lol..good nite,,

  • Report this Comment On September 29, 2013, at 8:55 PM, johnrh1958 wrote:

    Love Cano but no one can afford to give any player $300+MM over ten years. get three players for $100MM over five....

  • Report this Comment On September 29, 2013, at 9:12 PM, VinceKlortho wrote:

    There is another error in this. The Dodgers finished at 0.568 and won their division so they WILL be going to the playoffs.

  • Report this Comment On September 29, 2013, at 9:21 PM, JoeDom80 wrote:

    Dumb question, signing this guy to a 10/300 million deal would be the equivalent of franchise suicide. Yes they will be better next year and the year after(still probably not that good) but what about the last 6-7 years of the contract when Cano hits his mid-30's and his numbers become pedestrian? It's reality check time for the Yankees. Time to put the wallet away for a couple years and rebuild. Let the A-Rod and Teixeira deals expire then make a splash in the free agent market. Around this time the Yankees should have some real nice young player up from the minors. Mainly Heatcott, Williams, and Austin, who will join the likes of Gardner, Nunez, Nova, and Pineda.

  • Report this Comment On September 29, 2013, at 11:07 PM, TMFRhino wrote:

    Vince,

    The Dodgers aren't mentioned in the article. The Angles are.

    -Eric

  • Report this Comment On September 29, 2013, at 11:22 PM, wayneagee wrote:

    Sure, pay him $300 million so you can charge the fans $12.00 for a beer and $10.00 for a hot dog.... just absurd....

  • Report this Comment On September 30, 2013, at 10:55 AM, gskinner75006 wrote:

    Lol! And you complain about CEO pay?

  • Report this Comment On September 30, 2013, at 10:59 AM, FourthStooge wrote:

    It's interesting to see how the media (whoever that may be) are trying to anchor us on a $305,000,000 figure.

    Why don't the Yankees negotiate a contract that aligns both parties' interests? Offer a lower base salary, but create incentives that, if the Yankees win 4 World Series & Cano finishes in the top 5 for HR, hits, RBI, SLG% & fielding on average for the next 10 years, he gets paid >$350,000,000.

    What's the brand value of Cano wearing a Yankees uniform versus another uniform? Winning as a Yankee is probably worth a lot more than winning as anybody else. The Yanks should be able to get some value out of this. Does Cano want to become a Met or Dodger?

  • Report this Comment On September 30, 2013, at 11:43 AM, CluckChicken wrote:

    Cano is good but there are better players and there is no team out there that will come even close to offering 300 over 10yrs. Heck there is no team that will offer him 10 yrs. The chance of him getting a contract that is even a few years at 30 million outside of NY are extremely slim, talking slimmer than Moss.

    Detroit - sure their 2B isnt as good as Cano but he is good and they have a 22yr old 2B hitting very well in the high minors.

    Baltimore - will not spend that type of money on anybody and they have more important holes to fill first.

    KC - This is the only other team others think may have an interest in Cano but here again like Baltimore they are not going to spend that type of money on anybody and they too have more important holes to fill.

    Cano is going to sign with the Yankees, he isn't going to get 10 years and he isn't going to get 30 million. My guess would be 5 years 100.

  • Report this Comment On September 30, 2013, at 12:39 PM, XXF wrote:

    Those big productivity fall offs are really terrible, like how Votto's BA went up 5 points or how his OBP went up 20. Or how Tulowitski's BA fell an entire 1 point. Like how Votto's WAR was 4.5 in 2009 and 6.2 today or Tulowitski's was 5.5 in 2009 and 5.6 today. Your contention that not a single long term contract works out is based on cherry picked, dishonest stats (which I am not a fan of).

    That said, overall, most of them do not work out, and for most teams the risk isn't worth it because of limited payroll, and leading up to the two most successful recent deals, Tulowitski and Votto, I would have told both mid-market teams not to do it. The Yankees are another animal all together and whether or not they want to spend the money on Cano the Steinbrenners will definitely not be listening the the opinions of us lesser beings.

  • Report this Comment On September 30, 2013, at 2:35 PM, FoolishLonghorn wrote:

    Cano is probably worth $30 mil a year right now. Given his offensive production for a 2nd baseman, I am not sure that there is a better offensive player in baseball. He certainly is in top 10.

    Votto is also a great player. But will he still be playing at 40? If so, will he still be great? or even reasonably good? Probably not. And he is signed through age 40.

    The problem is that the average major league player's performance peaks at age 29, and the average player retires at 35. Great players play longer, of course, but very few players are good enough to play past 40. There are only 10 players currently on rosters that are 40 or older, and most of them are pitchers.

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