MLB

Incentive-laden contract would end impasse between Yankees, Jeter

It is Thanksgiving weekend, time for peace and coming together. So as a holiday gift to those nouveau enemies — the Yankees and Derek Jeter — I have come to broker a truce.

Ultimately, the sides are going to reunite at some point — unless you really see the possibility of Jeter as a San Francisco Giant or the 2011 Yankees lining up with Eduardo Nunez as the starting shortstop. Maybe it is too late to salvage an ideal union because Jeter, in particular, tends to be unforgiving of those he feels have slighted him. So we might, for example, see the passive-aggressive Jeter emotionally detach himself from some of the day-to-day elements that he has taken on previously as Yankees captain and icon.

For now, though, this is a negotiation, and when done best both sides give a little and get a little to forge a settlement. The end result is that neither party looks like a loser publicly and that both sides can curry favor with the fans by showing how they budged to preserve a worthwhile marriage.

POLL: WHO’S TO BLAME IN JETER/YANKEES CONTRACT STANDOFF?

At this point, we know the Yankees have most of the leverage, notably because they recognize Jeter does not want to go anywhere else for a variety of reasons, including his appeal now and post-career to corporate America is in being a Yankee for life. Jeter’s leverage was damaged further by having his worst season in 2010 and because he turns 37 next year. Aside from Honus Wagner and Luke Appling, no shortstops in big league history have excelled at that age or older.

Conversely, Jeter’s case is built around emotion: Do the Yankees really want to mistreat a player who has so ideally personified their brand for the past 15 years? Do they want to risk scaring off players who might think: “If they get tough with Derek Jeter, what will they do with me?” Do they want to gamble that alienating Jeter can damage the relationship to such an extent that it hurts in the organizational pocketbook because selling history is so central to the Yankees’ business model?

Frankly, I think the Yankees are fine here. Their three-year, $45 million offer is probably way more than any other team would bid. Therefore, every additional penny proposed represents bidding against themselves. I believe Hal Steinbrenner feels similarly. Because no way — none
— does general manager Brian Cashman deliver the bold, acerbic comments he has made recently unless they have been, at the very least, blessed by Steinbrenner and, at the most, written by the owner.

Nevertheless, Steinbrenner is in charge of protecting more than the organizational coffers. He is in charge of the legacy, as well, and disillusioning Jeter to save a few dollars might be penny wise, and pinstripe foolish for the son of George.

So how can both sides move toward each other? Here is the Thanksgiving gift: The Yankees give Jeter a six-year, $75 million contract that breaks down as $20 million a year from 2011-13 and $5 million a year from 2014-16. The twist is that each $5 million year becomes a $20 million season if Jeter reaches 500 plate appearances in the previous campaign. Thus, for example, if Jeter remains a full-timer in 2013 and totals at least 500 plate appearances, then he would make $20 million in 2014 rather than $5 million.

WHY WOULD JETER DO THIS?
He is paid in the first three years of this deal the way he believes his star power deserves, and then he gambles on himself that he remains an asset through age 42. If he does, Jeter would max out this contract at six years, $120 million, which actually would make his second long-term deal with the Yankees worth more on annual average ($20 million) than his first ($18.9 million). At worst, he is guaranteeing he spends his whole career as a Yankee and is paid through his age-42 season, just like his fre nemy, Alex Rodriguez.

WHY WOULD THE YANKEES DO THIS?
The average annual value of six years at $75 million is $12.5 million. That is significant because luxury tax is com puted based on annual av erage value of multi-year contracts. So at the 40-percent tax they are paying now that would be an additional $5 mil lion a season. Thus between base pay and tax, the Yankees would be spending $25 million a year on Jeter, down from the $26.46 they were paying at the end on his last contract (this is assuming the tax stays the same in the next Collective Bargaining Agreement).

Between base pay and tax on their three-year, $45 million offer, the Yankees would pay $21 million a year for three years. On the six-year, $75 million offer, the Yankees would pay an average of $17.5M.

Now if any of those $5 million seasons vests, the Yankees would pay tax on $20 million in that year rather than on $12.5 million. But the Yankees would be happy to do that because that would mean Jeter was still a full-time, productive player.

In many ways this is still a three-year contract with the big money up front over that period. If Jeter is done as an effective player after three years, then the Yankees would be giving a $15 million buyout spread over 2014-16.

Considering that they pay Kei Igawa $5 million a season not to play, that seems like an acceptable poison pill with Jeter.

joel.sherman@nypost.com