The Giants made a big splash when they signed their right handed pitcher Matt Cain to a five-year $112.5 million extension on Monday. Believe it or not, that signing affects the Yankees pretty significantly.
First of all, the signing is a sign of the days. The gap between the rich teams and poor teams has shrunk to the point where teams are able to retain their players at a much higher rate than even 10 years ago. The Giants have never exactly been a poor team, but it shows how well things are that even after they sunk a ton of money into Barry Zito they are still flush enough to make 7-figure offers. There is also talk that they could extend Tim Lincecum next.
That weakens the Yankees biggest strength – being able to outbid everyone – because the caliber of players available to them on the market is going to be worse. There are also more teams with cash to bid against them so there will be more Cliff Lee scenarios where teams are able to keep up with them in free agent bidding.
However, how the Cain signing really affects the Yankees is because he now set the market. He is very similar in production to Cole Hamels and Zack Greinke. Hamels, being a lefty and a former World Series MVP, could potentially earn more money. Greinke’s past mental health issues could scare some teams away from bidding on him and lower his price slightly (although as a former Cy Young award winning, probably not too slightly).
This means that if Cain is worth roughly $22.5 million a year, Hamels can probably expect something in the $23-25 million range per year and, because he’s a lefty, maybe a year or two extra in length. Greinke could probably get himself the same average annual salary, but might struggle to get more than five years.
If one of these pitchers signs an extension before hitting the free agent market than the other could potentially leverage his situation as the lone man on the market into much more money.
Where this really changes things for the Yankees is their $189 million budget in 2014. The Yankees always crave big name pitchers and Hamels and Greinke are both that. However, if they are serious about reaching $189 million then they may well be forced to make a decision between bidding on these pitchers and being able to re-sign both Curtis Granderson and Robinson Cano.
With the very real possibility that the Yankees may be forced to pass on both Hamels and Greinke, it also makes Michael Pineda much more important. If the Yankees are going to be unable to make any big money offers to free agent pitchers, offers starting at $22.5 million per year, than their ability to develop young talent becomes even more important.
That’s part of the reason the Pineda/Jesus Montero trade is still important, the Yankees might be forced to develop their entire rotation from within. Considering the volatility of young pitching, getting even two of the three out of Pineda, Manny Banuelos, and Dellin Betances to be successful members of the rotation would take a near miracle. When it comes to prospects, the only way to guarantee to get a good one is to get a lot of them.
So by Matt Cain removing himself as an option from next year’s free agent class, setting the market high (no hometown discount here), and potentially even pricing the Yankees out of the bidding for the other two big name free agents, a huge importance has been put on the Yankees young pitching.