In the past few years, the RedSawx have used their large budget more effectively than the Yanks have utilized the best revenue stream in baseball. The results make this obvious; one reason is that the RedSawx are more willing to reload from within than to continue paying their players. It's a difference between the Yankee family and RedSawx family -- the Yanks like to keep theirs intact far more, but the RedSawx are wiser about when to cut ties. Thus, the Sawx let the best pitcher in the AL during his tenure (1998-2004) leave as a free agent because they feared Pedro Martinez was about to breakdown . . . which he has. Thus, they let Johnny Damon go to the Yanks for more money because they didn't want to pay for the downside of his career, which they estimated would begin shortly whilst the Yanks banked on a longer delay.
By contrast, the Yanks gave Mussina two more years in the 2006 offseason and he's now an albatross; the Yanks gave Giambi far too many years during the 2001 offseason, and are stuck with him for one more year. The Giambi situation was a classic good move getting offset by a corresponding choice that turned out badly -- Giambi replaced Tino, who the Yanks rightly believed was heading to the end of his good years.
This year, the Yanks and RedSux have encountered questions of what to do with key free agents: the Sawx are balking at giving Mike Lowell four years guaranteed even though he's a top-class individual, built for the dump the team plays in, and one of the better fielders at his position because they don't want to pay for his lack of productivity in 2010-11. The Yanks took another route on two free agents: A-Rod is a tremendous talent and has a Jordanesque work ethic, so a 10-year bet on him is not necessarily bad; Posada is younger than a typical 36-year old catcher because he is a convert to the position, which has probably saved him 2 years behind the plate and he can be transitioned to first base or DH in 2010, so a four-year deal for him is fine (especially because he's a .380+ OBP guy and switch-hitter with pop). Remember, Jorge's production last year put him so far beyond what any catcher had achieved at age 36, it's remarkable. Consider: Berra at 36 had these stats 119 G, 22 HR, 61 RBI, .271 BA, .330 OBP; Bench = retired at 35 after four seasons of decline; Carter at 34-36 had fewer RBI in three seasons than Jorge in '07.
Rivera is different -- he's a few months older than Wongdoer and I (his birthday is 11-29-69) and would be 41 throughout the fourth season he wants the Yanks to guarantee. He's the greatest closer in baseball history, but if he's throwing 88-91, he sucks (see April 2005, April 2007). By the time he's 41, that won't be aberrant early season velocity, but will probably be his typical ability. Indeed, he's had some minor physical problems that have limited the Yanks' use of him in 2002 and 2006, so his durability may decrease too. Should the Yanks then pay $15,000,000 for a glorified Joe Borowski? The question answers itself.