The Science of the CC Free Agency

The key to any negotiation is to have leverage. Enter CC Sabathia.

Over the past few days, the Yankees' bid for CC is being greeted with skepticism and panic. "Where is CC?" "Why hasn't he signed yet?" "He wants to hit and play in California?" "Money isnt important to him." "He hates New York."
Sheep, all of us, sheep.

Let's look at this whole thing in terms of leverage and rationality.

The Yankees have been telegraphing this move since last year when they wouldn't trade for Johan Santana. It was well known then that they would need to sign Sabathia. Forget the kids, even if Hughes and IPK dazzled last year, the Yanks were still going to go after Sabathia, and hard.

The Yanks clearly had zero leverage. Sabathia knows this. During the season, Cleveland knew this. After failed attempts to sign him to an extension, the Indians traded CC to Milwaukee for whatever return they could get; knowing they would not get a hometown discount versus the Yankees. Milwaukee made the deal for the short-term, they were not expecting to outbid the Yankees or retain CC's services. Instead, they were looking to make the playoffs for the first time in ages and hopefully bring life to a near dead franchise.

Milwaukee threw an offer of 5 yrs./$100M in good faith to show that they would like to have CC back, but that they knew it wouldn't be enough to outbid the Yankees. The Yankees have already shown their hand, and are expected to make a bid early in the offseason. On the first day, they make a 6 yr/ $140M offer, big enough (they hope) to scare the other teams away. The reasoning is simple, if nobody else bids on CC, he has no leverage and will come to NY on their first offer.

CC and his agent knows this. So the most obvious step in this 'business equation' , is to figure out how to regain leverage to receive a maximum return. The way to do this is to remain quiet, and wait for other offers to come in. Make the Yankees think that while their offer may be the highest, there are other factors involved. Make them wait, make them sweat, make them doubt their offer, make the media go crazy, make New Yorkers think there will be no Christmas without CC. Make the Yankees bid against themselves.

The rest of baseball knows this as well. Does anyone else find it odd that no team has made an offer to Sabathia since the Yankees? This is the #1 free agent on the market with a huge offer already in front of him, and while teams are interested, none of them have made an offer. Obviously they know something that we don't, that the longer they make the Yankees wait for CC, the less competition they will get from the Yankees on other free agents. In addition, there are a number of other free agent pitchers available, they cannot afford to let the Yankees set the market on pitching. If they do, the Yankees can pick and choose whoever they'd like.

While money has never been an object in New York, $140 million dollars is a lot and whether or not CC signs with the Yankees will have a huge impact on how they progress in this free agent period. The plan in New York is simple, sign CC and go from there.

On a side note, for those who are convinced that CC will sign with the Dodgers or Giants on a hometown discount, remember this: he didn't sign an extension with Cleveland on a hometown discount, and he didn't respond to the Brewers' offer either. This is a 28 year old pitcher with the world in the palm of his hands. This may be the last contract he ever signs, he needs to think about the rest of his life, the rest of his children's lives, there is no doubt that the lure of the new stadium and the megamillion dollar endorsement contracts in New York can help him settle in California six years later than he would have liked. In 2008, in this economy, you don't leave $40M on the table, and you certainly don't sign for $140M if you think you can hold out for $150M.

CC will be a Yankee. This isn't because I'm a Yankee fan who believes that every player wants to be a Yankee. He will be a Yankee for the same reason that other prime aged free agents have signed with the Yankees. Money, Money, and more Money.