From Yahoo's Tim Brown:
One source mentioned a potential three-way deal that would send outfielder Hideki Matsui from the New York Yankees to the Seattle Mariners for a pitching prospect, perhaps Ryan Rowland-Smith. The Yankees would package the prospect with second baseman Robinson Cano and another young player to the Rockies for Matt Holliday.
Matsui has a full no-trade clause. He's owed $13MM next year, the last of his deal. He hit .294/.370/.424 this year in 378 plate appearances, missing much of the season with knee problems. He now has two surgically repaired knees, so he's questionable to play the outfield.
At any rate, it doesn't seem like the Yankees would seriously explore a Holliday trade unless Mark Teixeira signs elsewhere first. And does it make sense for the Mariners to give up a young pitcher and take on a risky DH like Matsui?
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