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Following the general managers meetings in Orlando, Ryan on November 18 told the Wall Street Journal and New York's Daily News that the Rangers weren't the frontrunners for Lee, but he downplays the comments the following day. "They didn't indicate that we had the upper hand," Ryan says. "They certainly are going to be receptive to anyone that wants to come over and visit with them, and they're prepared to go through the process. I don't think that surprised any of us."
Although the Washington Nationals have expressed interest in signing Lee and the small group of other teams with the money to afford Lee's sticker price can't be counted out, Stanford University sports economist Dr. Roger Noll says the Yankees are possibly the only team feared by the Rangers, because they're "capable of outbidding anybody."
Yet Noll claims that relatively few athletes take the highest offer and instead choose from among the top offers, selecting the one that maximizes their wealth over the long term. Unfortunately for the Rangers, that only widens the financial divide between the two clubs.
Texas does have an advantage because of its lack of a state income tax. However, Noll says because a portion of state taxes can be deducted on federal tax returns and Lee's likely to use "creative accountancy" to minimize the damage, he estimates that on a contract between $20 to $25 million per year the net tax burden would add up to around $1 million annually, which could easily be the gap between the Yankees' and Rangers' offers.
Even assuming both offers are equal, Noll says Lee stands to make millions more in endorsements by playing in a media capital. "Cliff is about to become a company," he says, and Lee will be "cashing in big time on other things than just playing baseball" if he pitches well for the Yankees.
Noll says the Yankees also offer him the best probability at winning a World Series ring. "As much as I hate it, it's true. They're always in it, and that's because they take in so much money—twice as much money as the team that's in second place."
Despite the New York's clear economic advantage, Noll says athletes consider several other factors when signing a new contract, such as their plans after retiring, coaching staffs, the weather and where they live. While it's unknown exactly what Lee's considering, the 40-minute flight to Little Rock is a clear plus for the Rangers. Will that be enough to overcome the extra cash that New York's likely to toss his way?
Tim Dierkes, founder of MLBtraderumors.com, which attracts more than a million daily page views from visitors seeking the latest scoop on signings and trades during the winter meetings, predicts that Lee's contract will be at least six years for around $23 to $25 million annually. He gives a team other than the Yankees or Rangers no more than a 10 percent chance of signing him, although he expects the Nationals to make a legitimate offer exceeding $100 million.
"If I was Lee's agent, my target would be seven years, $162 million," he says. "Then I could say that I got the biggest deal a pitcher's ever got, and I did it with a guy who's significantly older than Sabathia when he signed his contract."
If Lee does in fact sign somewhere else, Ryan says the club will adjust by signing another free agent, trading for a replacement or installing a young pitcher from within the organization into the rotation. Unfortunately, the level of talent among the free-agent pool drops off steeply after Lee. Only one upper-tier pitcher is likely to be had on the trade market, and the Rangers' best internal option doesn't appear to be ready to assume a rotation spot just yet.
With Ted Lilly, Hiroki Kuroda, Jorge De La Rosa and Jake Westbrook already re-signing with their former teams and Javier Vazquez and Jon Garland agreeing to one-year deals elsewhere, the rest of the free-agent pitchers available include Carl Pavano, Jeremy Bonderman and Brad Penny. Andy Pettitte is on the market as well, but he's likely to either retire or return to the Yankees. There's also a group of pitchers coming back from injuries that features former NL Cy Young winner Brandon Webb, Erik Bedard, Jeff Francis and Chris Young. "Whoever doesn't get Cliff Lee isn't going to find a comparable replacement on the free-agent market," Dierkes says.
Another option for the Rangers is 2009 AL Cy Young winner Zack Greinke, who recently turned 27 and has two years left on his contract. Kansas City Royals general manager Dayton Moore told the Kansas City Star on October 18 that "it's going to make sense" to trade Greinke at some point if they can't work out a contract extension.
John Manuel, co-editor in chief of Baseball America, expects the Rangers to be aggressive in their pursuit of Greinke, although a trade for him could deplete Texas' farm system. "[The Rangers are] relevant, and I think they like the idea of being relevant, and I would too. I think they'll do what they need to do to be relevant, and you can rebuild a farm system easier than you can rebuild a major league team."