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Cashman: Yanks will not increase current offer to Cliff Lee

Dec 12, 2010, 4:24 PM EDT

Rangers' Lee throws against the Giants during Game 1 of Major League Baseball's World Series in San Francisco

It’s hard to put a real finger on why, but things seem to be trending toward the Rangers today on the Cliff Lee rumor front.

Maybe that’s natural.  Since the Winter Meetings began, and even before that, the Yankees have seemed like the favorite to land the ace left-hander.  Perhaps these optimistic Rangers bits are working as a kind of media-driven balancing act.  Like a run of hey, they’re nice too stories.

Or maybe it’s all for real and the Rangers are going to win this thing.  Listen to this:

Yankees general manager Brian Cashman told George King III of the New York Post Sunday that he will not improve the club’s current seven-year proposal to Lee, thought to be worth close to $161 million.  They’re done adding years and money.

As far as we know, the Rangers have only been willing to offer a six-year contract and will probably not move north of that unless it’s in the form of a seventh year club option.  That means Texas is offering less total guaranteed money, no matter what the average annual salaries look like.

But, as we touched on earlier today, there are reasons a guy like Lee might turn down the extra millions to remain in the Dallas area.

His Arkansas home is not far from Arlington, he has a strong relationship with pitching coach Mike Maddux, and it’s not like the Rangers are offering chump change.  He can still retire on a big ranch in Montana, buy a penthouse in Miami, custom order an 80-foot yacht, or whatever else filthy rich athletes do.

Maybe Lee will take Texas’ six-year deal, confident in his ability to make that seventh year happen.

  1. uyf1950 - Dec 12, 2010 at 5:21 PM

    Good for Cashman & the Yankees. If he decides to play for the Yankees good, if not I wish the Rangers and their fans luck. It’s a lot of years and a lot of money each of the teams are will to commit to him. Let the chips fall where they may.

    • pisano - Dec 12, 2010 at 5:29 PM

      Ditto, but I hope he stays in Texas we could do alot with the money saved and through trades. Good luck Cliff, but I hope you choose the Rangers.

      • uyf1950 - Dec 12, 2010 at 5:41 PM

        It does free up a lot of money for the Yankees. I wouldn’t be the least bit surprised if Cashman already has a deal or two lined up for as soon as he hears something on Lee. At the very least I can see Cashman working a trade for a good #2 by packaging Joba and one of the catching prospects and if need be the always popular PTBNL. Of course this does put a little more pressure for the Yankees to convince Andy to come back for 1 more year. Also the Yankees can work on signing Wood and finalizing their catching situation.

  2. thatcherlight - Dec 12, 2010 at 6:57 PM

    Let’s not forget the tax differential, which evens the playing field/bidding war very considerably. New York tax rate for top income bracket is a whopping 52%. I don’t know the precise number, but do know that the Texas rate is a small fraction of that figure.

    • Ari Collins - Dec 12, 2010 at 7:04 PM

      As a couple people have pointed out, at that level of rich, people don’t tend to care about how much they’ll be taxed. They don’t care about how much of the money they get to spend. They just care about earning more than the next guy. Lee will be happy with the highest ever AAV in a long-term pitcher contract. State income tax only matters if you care about spending the money, not earning it.

    • pisano - Dec 12, 2010 at 7:10 PM

      To uyf1950… I like your thinking, Ive been praying for Joba to be traded and if it meant getting Wood back I’m really in heaven. Why not offer Pettitte a little more than last year rather than throw all this money at Lee. I hope they get Russell Martin because with all this speed the Sox and the Rays are going to have the Yankees will need a catcher that can throw. They can’t count on Cervelli or Montero.

    • paperlions - Dec 12, 2010 at 7:10 PM

      Players pay taxes to the states they work in, meaning that only about 1/2 of Lees games would be in NY or Texas.

      Also, the STATE income tax rate in NY is 6.85% for everyone that makes > $20K. In Texas, they make up for not having income tax with increased sales and property taxes. In other words, the effect of the state tax thing really isn’t that big a deal, and you can forget it, because it won’t affect Lee’s decision.

      • thatcherlight - Dec 12, 2010 at 7:17 PM

        You must not be rich and are, perhaps, presuming how you would feel if you were. (Hey, neither am I…FAR from it!) But if what you say was so, why do the rich fight for and enjoy the best tax rates as a percentage of their income? And also use every loophole and tactic they can find to hide money and pay even less? Hmmm?

      • thatcherlight - Dec 12, 2010 at 7:21 PM

        Not at all sure you’re right about how he would be taxed. Yes, he plays 1/2 of his games away, but is employed by a New York team and receives every check in New York. I doubt that New York allows what you posit to be the case. Also, you are not factoring all sources of taxation that New York imposses. They have layers of taxation all the way down to city taxes that end up amounting to a total tax load of 52% at that income bracket.

      • Reflex - Dec 13, 2010 at 2:06 AM

        Its called the Jock Tax and yes thats exactly how it works. Look it up. Only half of his salary would be taxed as income by the state he is calling home.

    • aggieband - Dec 13, 2010 at 3:28 AM

      There is NO state income tax in Texas, which is a HUGE savings. The sales tax in Arlington runs about 8.25%. Other surrounding cities have slightly lower rates, but 8.00% is about the lowest in the area. Another huge difference between the Rangers and Yankees is that the Dallas/Fort Worth area has some of the lowest real estate prices in the USA. Most things in Texas (schools, hospitals, municipal government, etc.) are financed through property taxes, which are fairly high by national standards, but since the value of the real estate property is less for what you get and there is no income tax, he would still be far ahead in terms of take-home pay.

  3. rick1922 - Dec 12, 2010 at 7:38 PM

    I say good luck and goodby to him save the money and get someone younger and WANTS TO BE A YANKEE.He is not worth half the money he;s asking for.I say move on an let mister greedy be a RANGER .I don;t think he could make it in NY anyway.

    • paperlions - Dec 12, 2010 at 7:44 PM

      Funny coming from a Yankee fan. Most players don’t want to be a Yankee, per se; they want the most money, and it just happens to be the Yankees that are offering it.

    • ieatpilgrims - Dec 12, 2010 at 8:42 PM

      Is this a joke? “let mister greedy be a RANGER “? If he signs with the Rangers, he’d be taking less money; isn’t that the opposite of greedy?

  4. bradwins - Dec 12, 2010 at 8:04 PM

    You people know nothing about taxes. Everything said in this comment thread is at least partially incorrect. Tax codes can be incredibly complicated, so I won’t try to explain all of the tax consequences at play here. But suffice to say, Lee will be getting better advice than what is offered here, and it definitely will be a factor in his decision.

  5. Ranjit - Dec 12, 2010 at 8:26 PM

    thatcherlite – That 52% tax figure you cited appears to include federal tax, at the top rate of 35%. Even then it’s too high; whoever came up with it probably was figuring on the top rate being returned to 39.6% sometime soon. The 6.85% state tax rate that paperlions cited looks correct for a few years ago; according to a Google search, the top rate (for incomes over $500K) went up last year to almost 9%. The New York City tax rate is a bit under 4%, so the total state/city take is 13%. Those taxes apply only to residents anyway, and I doubt most Yankees live in NYC itself. Lee’s marginal tax rate would be about 9% if he lived in a NYS suburb and still less if he lived in Connecticut or New Jersey.

    From Wikipedia:
    ‘…some states allow cities and/or counties to impose income taxes above and beyond the federal and state income taxes. An example is New York City, where there is both a state income tax of up to 6.85%[4], (8.97% for 2010)[5] and a city income tax, up to 3.648%[6]. The maximum rate in the city limits of New York City (as of 2007[update]) including federal, state, and city taxes is therefore 45.498%, or 1.3 times the 35.0% rate inside “federal income tax only” cities such as Seattle, Houston, Dallas, and Miami.’

  6. richm1023 - Dec 12, 2010 at 8:50 PM

    Throwing all this money at a guy who was 12-9 last year and lost two games in the world series. Let him stay in Texas.

  7. uyf1950 - Dec 12, 2010 at 9:01 PM

    Gentlemen, I have to agree with bradwins comments. Also there was a article not that long ago that basically said the difference between Texas and NY (state & City) taxes would amount to about 10% of the total contract over the life of the contract. So figuring the Yankees offered $150M the Rangers would have to offer $135M to have a comparable offer. It also stated that would be more then offset in NY by endorsement offers in the NY market. So forget the difference in the tax rates it’s not going to be an issue in the long run. Also consider that any person Lee included making that kind of money is going to have Tax Lawyers and Accountants that are going to find every nook and cranny they can to shelter money and minimize his taxes. That’s just the way it is.

    • gt929 - Dec 12, 2010 at 9:22 PM

      Heya, UYF. I’m sure we’re all just ready for an answer. I don’t think either team is doomed if they do or don’t sign him. Both need to know though, so they can get on with building the rest of their teams.

      I may be wrong, cuz I don’t know him, but Cliff Lee doesn’t seem like the kind who would do many endorsements, if any.

      • uyf1950 - Dec 12, 2010 at 9:30 PM

        I agree GT929. He wouldn’t have to do many. For Example: Jeter has 3 primary endorsements and earns approximately $10M per year from those 3. Like I said in an earlier post several days ago it’s not about quantity it’s about quality.
        Regardless, both teams deserve some answer soon so they can move on with business. And your right neither team is doomed, I just want it to be over. Period.

    • aggieband - Dec 13, 2010 at 3:40 AM

      Logically, I understand your endorsement comments and agree with the basic tax differences. However, Cliff Lee is from Arkansas and has a fairly strong southern accent, which will not endear him to New York fans in terms of TV/radio commercials. Here in Texas, he would sound like everyone else and would be welcome as a spokeman for virtually anything. I think in his specific case, he might actually have a bigger endorsement market in the D/FW area than in NYC.

      There is also the advantage that because the Rangers are the only MLB team from north Texas all the way to Atlanta to the east, St. Louis to the north and Denver to the west, the fan base is extensive in the surrounding states (including Arkansas) and his endorsement appeal would likewise extend far beyond the local TV and media market. The Rangers games are carried on television throughout a seven state area and a lot of Ranger fans come from outside the local commuting area once school gets out.

      In Texas, he is the face of the franchise (along with Josh Hamilton) while in New York, he isn’t even the best pitcher on the team! The Rangers have not had a pitcher of his stature since Kenny Rogers, who was never well-liked by the fans. Nolan Ryan was the last pitcher here to have generated this type of interest.

  8. mtner77 - Dec 13, 2010 at 4:20 AM

    I am laughing. Now the Yankee faithful DOES NOT want Cliff Lee? LMAO. How dare another team even offer him a contract like that. They just don’t understand how buisness is done in MLB. The Yankee’s simply point at a player, and say “yes we will sign him next year. We do not care the cost.”

    Finally, you have Nolan down in Texas. He refuses to take the Yankee crap, so he makes a huge couter-offer.

    Wait until tomorrow when Lee signs with Yankees’.. I can’t wait to read these same fools singing his praises. It will be the best “Yankee Thing” yet.

    • uyf1950 - Dec 13, 2010 at 4:51 AM

      I’m impressed by your knowledge or should I say lack of knowledge about Yankee fans and the “Yankee faithful”. First there are many of us and several differing views on Cliff Lee. Second, most Yankee fans would like/love to have him, but the issue is at what cost. Third, Yankee fans want players that want to be Yankees. If Lee doesn’t want to be a Yankee there is nothing wrong with that, that’s his right. Let him play for the Rangers or the “mysterious” 3rd team. Lastly your comment about Nolan, I think you have your facts mistaken. I like Ryan, was a great pitcher and has been a great executive for the time he has been. But you comment about “him” making a huge counter offer is mistaken. He wasn’t even involved in the last Ranger group that made the trip to Little Rock to visit Lee. Was he involved in the process I hope so, but obviously the final decision on what to offer Lee this past week was in someone else’s hands.
      Of course should Lee ultimately choose the Yankees, most Yankee fans will embrace him and the signing. Some will have reservations that’s human nature.

  9. yankees1996 - Dec 13, 2010 at 10:19 AM

    It is time to move on, nevermind Lee. The Yankees should begin talking to the Rays about Garza before it is too late.

  10. gt929 - Dec 13, 2010 at 10:25 AM

    Probably the same sentiment among Ranger fans, UYF. I mentioned here the other day that there was a DMN poll asking fans ‘if it took a 7 year contract to land Lee, do we still want the Rangers go for him?’ At first it was running at 75% against, now it is down to 54.25% against.

    • uyf1950 - Dec 13, 2010 at 10:31 AM

      gt929, I just wish this was over with. Enough is enough. Both teams need to address other issues and this is hampering that.

  11. scrunchify - Dec 13, 2010 at 10:43 AM

    as uyf1950 suggests, there are several differing views on lee among yankee fans. i would like to
    see him sign but i don’t think that it spells doom if he doesn’t. as a matter of fact, regardless of where
    he goes, the real winner won’t be known for a few years. the ego driven auction mentality always
    seems to result in players being overpaid and , as good as he is, lee is flesh and blood and his
    record last year was 12-9 not 19-2. i think the waiting game by the braunecker/lee team means they
    are looking for another sweetener.i hope the yankees resist that temptation and let the chips fall where
    they may. i don’t have a clue ( or opinion) on where he winds up but if he was so enamored of the
    texas lifestyle and his teammates, what is holding him up? the rangers have obviously made a sig-
    nificant financial offer and if that is where his heart is ( i’m not convinced ), he should have been gone
    by now. i just hope it ends quickly so the other dominos can start to fall.

  12. rick1922 - Dec 13, 2010 at 10:45 AM

    I think it’s time to take the offer off the table the Yankees would be making mistake to give Lee that many years and that much money.Time to move on.

  13. scrunchify - Dec 13, 2010 at 1:28 PM

    the lee image as this down home arkansas boy who jest wants to
    do a little huntin’ with the guys is taking a big hit at this point. texas
    made a legit offer and his agent has him holding on and actually
    called the yankees this morning to raise the ante. the feeling is that
    he is now using the yankees to extract the last dollar he can from
    the rangers.
    i agree with rick. the offer comes off the table if he doesn’t commit
    today. let the rangers overpay and go to option B.

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