Derek Jeter is a free agent after this season. We know this because we've read countless stories about his impending free agency ever since he reported to camp, every one of which says the same thing: Jeter wants to and expects to remain in New York. The Yankees don't dispute this; it's unimaginable that the Yankees wouldn't re-sign him. But even though all parties are on the same page, Jeter won't sign before the end of the season, because the Yankees won't discuss a new contract with a player until his old one has expired. It's team policy, and it's one that only they could get away with.
It's been their policy for long enough that it's generally just accepted — by players and by fans. No one bats an eye when they won't even make an exception for the Great Jeter (or the Great Rivera), because, hey, policy's policy. Cashman was asked yesterday about why exactly this policy exists, and he explained that he didn't really want to go into it, but that he had multiple reasons and didn't need to justify it publicly. It's not hard to see why the Yankees (or any team) would like it: It gives them another year to evaluate a player, and it covers them in case of an injury or diminishing stats. Could it burn them if someone plays himself into a higher tax bracket? Sure. But the Yankees are the only team in a position to take that chance. They don't have to worry about their players hitting the open market because they control the market.
Jeter's not a good example of this, because he won't really be on the open market. But the Twins need to sign Joe Mauer now because if they don't, the Yankees would just outbid them next year. The Marlins gave a four-year extension to Josh Johnson, who won 15 games last year but who's also had Tommy John surgery to repair his elbow, because they had to. Sometimes it works out. And sometimes you pay Dontrelle Willis $10 million a year. The Yankees have the ability to wait until they have all the data — every at-bat or every pitch of that original contract — before they need to make a decision. And if it backfires, and the player has a good year in the last year of his deal, they'll still get their man. It just might cost them more.