As Wongdoer noted below, the Yankees exchanged one cork-armed centerfielder for another by signing Johnny Damon for four years and $52M, pending passing a physical exam. That's a big hunk of dough for the Raggedy-Andy-armed Damon, and makes the Yankee outfield a parade of $13M men (salaries of Matsui, Sheff and Caveman). So the risks are high and The Monk's preference for younger, cheaper and faster will not be satisfied.
Nonetheless, the potential benefits to having Damon are hard to ignore. First, Damon helped make the RedSawx go -- now he's gone.
Second, Damon will be the Yanks' first full-time true leadoff hitter since Chuck Knoblauch fit that bill in 1999 (in 2000, Knobby missed 60 games and didn't start the road games in the Series). Don't underestimate the potential effects.
Before the 1998 season, the Yankees' brass wondered what was missing from the '97 team that could make the difference between a solid 96-win squad and a World Series champion. David Cone provided the answer: Chuck Knoblauch. Get the leadoff hitter and the rest will work. And to some degree, Cone was right. Knobby is known for his infamously bad throwing and defensive problems, but at the plate he performed fairly well: 237 runs scored in '98-'99 when Jeter had his career high RBI totals of 84 and 102. Even though his '98-'99 totals were far from his 1995-96 levels of excellence, Knobby reached base (.361 and .390 OBP) and set the table for a lineup that included solid hitters but no neo-Ruthian bangers -- Williams, Martinez, O'Neill. Those teams are the last Yankees' squads to score 900 runs in a season.
The '99 team is the last great Yankee team that won the World Series -- the '02 and '03 incarnations were both very good but didn't win; the 2001 team was not a great team, just the tail-end of the dynasty; the 2000 champs are the worst Yankee team (87-74) to win the World Series. The Yanks have had players bat leadoff (Jeter, Soriano, Lofton) but no lead-off hitter at the top of his game who could bat lead-off AND would not be better somewhere else (the Jeter dilemma).
That changes on opening day in 2006. Damon is a pure lead-off hitter -- a player who walks a decent amount (about 60/year), doesn't strike out much (about 70/year), has some pop and can hit for average (career .290). Adding Damon takes Jeter out of the lead-off slot, where he still managed 78 and 70 RBI in the past two years. And Damon will also be covered by big-time bangers -- Sheff, Arod, Matsui, Giambi. When Robinson Cano is the probable #8 or #9 hitter, the lineup is pretty stacked.
So the Yanks upgraded defensively because Damon can chase the ball better than Bernie; they upgraded offensively by getting a player still within his peak; they cut some waste (Brown, Williams, Karsay, F-Rod) and may still swing a deal to salvage the Pavano situation. Plus, they'll re-sign Chacon, have Randy Johnson better in year two (look at the second-year-in-pinstripes trend -- Clemens, Cone, Wells all improved; only Mooooooooose slipped) and hopefully Wang and Moooooooooose will be healthy. All good reasons to feel decent about 2006.
As former Yankee beat writer Buster Olney indicates in the article linked in the title of this post, the Yanks set specific limits to their negotiations and waited for Damon to fit within their parameters -- four years, no more. As Damon's demands dropped from seven to six to five-plus-vesting-option to five to four, the Yanks waited while the RedSawx stayed at a proposal of 4 years, $40M. When Damon got to four years, the Yanks jumped in with a higher bid and told him to sign ASAP. He did. And the Yanks' off-season seems to be a success.