Yankees Free Agent Rumors: Starter Phil Hughes Will Be A Free Agent In 2014, But Will New York Re-Sign Him?

The 26-year-old may be in line for a major contract extension when his current deal expires at the end of the 2013 season. According to the New York Post, a strong season from Hughes could mean a very lucrative contract -- just not from New York.

The Yankees have significantly tightened their belts this offseason to avoid the luxury tax and may take the same approach next year, even if Hughes becomes a 20-game winner. The Yankees want to keep payroll below the $189 million luxury tax threshold, and retaining an improved Hughes could put them well over it.

During the offseason, the Yankees failed to re-sign outfielder Nick Swisher, starting catcher Russell Martin, and even playoff hero Raul Ibanez -- all in the name of short-term and less bloated contracts.

General Manager Brian Cashman has showed he isn’t going to splurge, even for top pitching. Back in November, the Yankees came to terms with starter Hiroki Kuroda on a one-year deal worth $15 million, plus incentives. In previous offseasons, the Yankees may have pursued a high-profile starter like Zack Grienke, but instead chose a less risky option in Kuroda.

The Yankees may not have to worry about offering a huge deal to Hughes. He has yet to pitch 200 innings in a season, and is not considered a legitimate No.2 starter for a team competing for a title.

When the Yankees originally drafted Hughes in the first round of the 2004 amateur draft, he was lauded as the next great New York starter, but over the last three seasons his results have been mixed.

Hughes’s best season may have been 2010, when he went 18-8 in 31 starts with a 4.19 ERA, and earned his first and only All-Star selection. However he followed up that year with an injury-riddled 2011. Hughes suffered from arm fatigue and only made 14 starts, missing two months.

Last season, Hughes went 16-13 in 32 starts with a 4.23 ERA, but posted a career-high 165 strikeouts. He made $3.2 million in 2012, but stands to make far more should he over-acheive in 2013.

Hughes may need a healthy season in 2013 to attract serious long-term offers in the offseason. The right-hander will be in a free-agent class that includes Josh Johnson, Tim Lincecum, and Jason Vargas.