In recent days the Red Sox and Phillies have improved their chances of stopping the Yankees from defending their championship. The Phillies came within two wins of winning the World Series in 2009 and by adding Roy Halladay, while losing Cliff Lee, have made the top of their rotation stronger. John Lackey gives the Red Sox one of the best and deepest rotations in baseball, while the signing of Mark Cameron helps offset the almost certain loss of Jason Bay; and Marco Scutaro will be a big upgrade at shortstop. Dumping Mike Lowell will also help the team. It seems likely that the Red Sox are not quite done yet this off-season and may add another corner infield bat. Other teams, notably the Seattle Mariners have made some big moves, in the Mariners case the acquisition of Cliff Lee and Chone Figgins, that may allow them to emerge as a strong contender in 2010.

The Phillies and Red Sox occupy the comfortable second tier of baseball payrolls. They play in big enough markets and spend enough money to contend every year, but are clearly one tier down from the Yankees who consistently outspend both teams by more than $50 million a year. Thus, the Red Sox and Phillies can spend money more or less as needed while conveniently deflecting any criticism of payroll inequities to the Yankees.

Nonetheless, this inequity is real as the Yankees have shown this post-season. The Yankees have made three moves this post-season, two of which, while perhaps not explicitly, have been made possible because of their willingness to spend money. First, the Yankees resigned Andy Pettitte to a $11.75 million dollar one year contract. Retaining Pettitte was more of a relief than a surprise to the Yankees and their fans, but the Yankees paid a great deal of money for a solid, if unspectacular, pitcher. The Yankees lack of pitching depth, and Pettitte’s impressive post-season put Pettitte in a strong bargaining position, but that did not seem to bother Brian Cashman or the Steinbrenners.

The second Yankee move is a little more perplexing. They let another post-season hero, Hideki Matsui, sign with the Angels for $6.5 million dollars. There are two explanations for this. The first is that Matsui got angry at how slowly the Yankees were moving and went elsewhere. If that is the case, the Yankees made a big mistake, but the second possible explanation is that the Yankees have other plans which have not yet been made clear.

The decision to let Matsui go is related to the biggest off-season move the Yankees have made, the acquisition of former Tiger center fielder Curtis Granderson. Granderson cost the Yankees Phil Coke, Austin Jackson and Ian Kennedy. This was, in many respects, a good grade for the Yankees. Gaining the certainty of Granderson while still under a modest contract seems to offset losing Austin Jackson who is a good, but not great prospect. It is true that in a few years Jackson may be better than Granderson, but the Yankee resources allow them to play for the present and trade away prospects like Jackson.

With regards to talent exchanged, the Granderson trade is not bad for the Yankees, but the real impact of the trade will be determined by how they use Granderson. Currently, the Yankees have no DH or left fielder. If the Yankees see acquiring Granderson as giving them the freedom to move Melky Cabrera to left and rotate aging hitters through the DH slot, this trade will have been a mistake.

Johnny Damon, who is still unsigned, and Hideki Matsui were both better hitters than Granderson last year. It will be difficult for Granderson to replace the production of one of those players, but to replace both will be almost impossible. The Yankees need to add at least one more bat, but their resources gives them enormous flexibility here. One strategy would be to resign Damon, perhaps even overpaying him for two years, but not committing to more than that. Damon wants a four year contract, but it is unlikely he will keep hitting for that long. In addition to Damon, the Yankees could also go after a Nick Johnson type hitter to replace Matsui at DH. In this scenario the at bats that went to Cabrera and Matsui last year would go to Granderson and Johnson this year which would be an upgrade for the Yankees but probably a wash on salary even when Damon’s new contract is figured in.

If Damon is able to get a long term deal elsewhere, it is almost certain he would take it. This, on the surface, would be the worst case scenario for the Yankees, because Cabrera would be stuck in left and players like Francisco Cervelli or Ramiro Pena would get a lot of at bats when they filled in for position players like A-Rod, Jorge Posada and others as they took their turns at DH. However, Damon’s departure would also free up enough money for the Yankees to go after one of the major free agent stars like Matt Holliday or Jason Bay. Adding that bat in left would make it possible for the DH spot to be split between some combination of Cabrera, Brett Gardner, Juan Miranda as well as A-Rod, Posada and other aging starting players. The Yankees could pay one of these players an annual salary of $20 million while still not having to increase payroll for the DH and LF position from 2009. Damon and Matsui combined to make $26 million in 2009, while a star free agent, at $20 million, and Granderson will make $5.5 million in 2010.

It is not at all clear which path the Yankees will pursue it is clear that while the Red Sox, Mariners and Phillies were the winners this week, the Yankees still have a few more cards to play.

Lincoln Mitchell