The Yankees seem to be quietly negotiating with Robinson Cano for a long term contract extension. This is a mistake. I'm not against a Cano extension per se, but I am against a Cano extension, which let's say will cost something like 8 years / $200 million, before the end of the 2013 season. I don't doubt that Cano will hit very well this season, be an MVP candidate, and project to be a strong player for at least the medium term. However, the Yankees do not have sufficient information yet to determine whether or not they can afford to sign him to that kind of mega deal. They need two very key sets of information: First, how do Mark Teixeira, CC Sabathia, and Alex Rodriguez play in 2013? And second, how does the Yankee farm system collectively perform?
The former is important because it will reveal a lot about how the Yankees can expect their assets to perform over the next few years. Under the best case scenario, Teixeira returns to 5+ WAR, very-good-for-a-first-baseman form, CC Sabathia is himself, and Alex Rodriguez proves he can be a productive player post surgery. In this case, resigning Cano makes sense. The Yankee roster is in good health, and won't need many high-priced additions other than Cano in order to compete. And should Cano's career take a quick turn for the worst, they won't immediately have four zombie contracts, just one.
But under the worst case scenario? Teixeira continues to slide into mediocrity, Sabathia's arm continues to show its career workload, and the Yankees fail to get out from under Alex Rodriguez's contract in the middle of a truly terrible performance. All of the sudden, the Yankees' $189 million salary cap starts looking more like $100 million, plus three albatross contracts, without a ton of hope on the roster. At that point, the Yankees need to start thinking about a medium-term strategy that looks a lot more like a rebuilding mid-market club than a traditional Yankee offseason. Cano's contract becomes a deadly risk, where the Yankees are one injury to their star 2nd baseman away from a majority-zombie payroll.
Just as important will be progress on the farm system. If things go well in 2013--meaning Gary Sanchez and two of the outfield crop continue to be great prospects and move up the ranks, Adams and/or Joseph start looking like a Cano backup plan and there is some pitching good news from Hensley, Campos, Ramirez, and Montgomery--the Yankees will have a lot of 2014 options. They can plan a roster with or without Cano based on this extra information. Michael Pineda is also in this category.
Again, I'd argue that good news here makes it easier to sign Cano to a huge contract. If you are more confident that the Yankees can count on the farm for 2-3 lineup spots and a pitcher or two, plus Michael Pineda, they know that they will need fewer dollars allocated to sign mid-level free agents to fill the roster out. They'll have a fairly robust roster even while concentrating their payroll in fewer and fewer players. If there is more bad news on the farm, you start having to spread the free agent dollars out to more positions, instead of spending it all on Cano.
And let's be honest: is there any real benefit to locking Cano up early? He is unlikely to give the Yankees much, if any, discount. If anything, Brian Cashman has shown that he tends to get screwed when negotiating against his own stars and no other team. I can't imagine that even an MVP-caliber repeat of 2012 would change his asking much. The smart decision is to wait and see, and then possibly make an offer to Cano in November, or let him walk.