Originally Posted by
ohms_law
If his market value is ~$4m, that means that he's being paid $12m for his on field performance. For the Yankees, $12 mil is a bargain.
There's the whole rest of the chapter about this in Diamond Dollars that makes it pretty clear. Suffice it to say that the Yankees are probably underpaying Jeter, and will continue to do so even in 2011. For one thing, his marquee value increases every year despite possible performance declines. The Yankee's brand value also increases every year, and is set to increase dramatically next year with the opening of New Yankee Stadium, which also increases Jeter's value.
Based only on his on field performance he's certainly being over paid, but that ignores a whole aspect of his value. Jeter (and Pujoles, who actually has a higher marquee value) sells tickets and eyeballs, and more importantly builds the team brand.