As per Joel Sherman via RAB, the Yankees have declined to offer any of their free agents -- Andy Pettitte, Johnny Damon, Hideki Matsui, Xavier Nady and Jose Molina -- arbitration.
I have no problem with this move -- while it may have made some sense for someone like Pettitte who made about $10 million or so last year, it seems silly to potentially overpay for one year of Matsui and/or Damon. Of course, now the Yankees forfeit potential draft picks should any of these guys sign elsewhere, but that shouldn't be the driving force behind offering a player arbitration.
Bottom line, if Damon and/or Matsui are looking to return to New York, it looks like they'll be doing so with a pay cut. And, perhaps most importantly, we have finally reached the end of the Jose Molina era.