The Yankees announced that have re-signed shortstop Derek Jeter to a one-year deal worth $12MM. Jeter, who is represented by Casey Close of Excel Sports Management, had a $9.5MM player option on his previous contract, but this deal will override that option.

The long-time Yankee Captain will turn 40 next June and appeared in just 17 games this season, making the decision to give him a $2.5MM raise on his option a curious one. However, by agreeing to a new deal, Jeter is no longer on his old contract, the average annual value (AAV) of which counted against the luxury tax. By exercising a $9.5MM option on a three-year, $51MM contract, Jeter would've locked in his AAV at $15.125MM. Instead, his $12MM contract will be the number that counts against the luxury tax, thereby actually saving the Yankees $3.125MM relative to the luxury tax.