Cashman says Yankees aren't in panic mode

The Yankees are not, Brian Cashman insisted, in panic mode. He used another "p'' word instead.

"Our Plan B is patience," the general manager said Tuesday.

Cliff Lee stunned much of baseball late Monday night, forgoing more money from both the Rangers and the Yankees to sign a five-year deal, worth $120 million according to The Associated Press, with the Phillies.

The Yankees, who were prepared to spend in excess of $150 million on Lee, now can spread the wealth. They need rotation and bullpen help, although Cashman said he would be cautious in the trade and free-agent markets. His message to disappointed Yankees fans: "We're not down and out at all."

A team official said although there was disappointment over not getting Lee, it was still "very early" in the offseason and that the Yankees are "sitting here with some of the best prospects in baseball and the most money. I think there's a lot of opportunities coming our way."

Exactly what those might be, and how he would prioritize his needs, Cashman didn't say, but the area most in need of an upgrade is the rotation.

The Yankees did make two moves Tuesday, agreeing to terms with catcher Russell Martin and, an industry source confirmed, signing Mark Prior, 30, to a minor-league deal. The former Cub, who hasn't pitched in the majors since 2006 because of right shoulder problems, will reunite with pitching coach Larry Rothschild. Prior will go to camp to compete for a bullpen spot.

Cashman said even without Lee the unit was a good one, mentioning CC Sabathia, Phil Hughes' growth, Ivan Nova's potential and, yes, A.J. Burnett, who is coming off a career-worst season.

The return of Andy Pettitte, whose leverage increased dramatically when Lee chose the Phillies, becomes more critical. The 38-year-old called Cashman last week but they haven't spoken since. Pettitte hasn't made a decision, but friends have said he has his family's blessing to return for a final season and is leaning that way.

It is not known, however, how Lee's decision might affect Pettitte. A friend who spoke to Pettitte last week said the lefty told him if the Yankees were to get Lee, he would come back. If not, he'd stay home.

"He's in the position where he has to decide if he wants to play or not," Cashman said. "That has to come first."

As currently constituted, does Cashman believe his rotation is championship-caliber?

"I think so," he said. "I think A.J. Burnett's going to turn it around for us. I don't think you're going to see him have another year like that. CC's an ace for any rotation; Phil Hughes, my God, this guy's done nothing but rocket through.''

But Cashman, who said all the fixes might not take place this winter, acknowledged the obvious.

"We will look to plug the holes that remain in this rotation," he said. "It's certainly not impossible. I have the makings of a terrific rotation as it is . . . Is it perfect? No. Can it be improved upon? Yes. Are we up for that? Yes."

He said he figures teams and agents probably "sense blood in the water" because the Yankees missed out on Lee, and was careful not to give off an air of desperation.

The next best free-agent pitcher is Carl Pavano - there's about zero chance of a reunion there - and the Mariners' Felix Hernandez and the Marlins' Josh Johnson aren't thought to be available. The Royals' Zack Greinke is available, but the Yankees don't think he'd be a good fit in New York.

Cashman mentioned Manny Banuelos, Dellin Betances and Andrew Brackman as examples of his pitching-rich farm system, but none is quite major-league ready. "We have a great situation here," he said. "We have a terrific future and a tremendous present."

But the Yankees, who also are in the market for a lefthanded reliever - they could use a righthander, too - will have to get creative, put in this position as a result of a rare rebuke by a top free agent.

"I'm not angry,'' Cashman said. "Cliff made a difficult decision I'm sure was not easy. I appreciate being able to participate in the process. Unfortunately, we were not able to pull him out and bring him here. We move forward."

With Ken Davidoff