6:01pm: The Yankees have not made Lee an offer and the Yahoo report below is inaccurate, according to Mark Feinsand of the New York Daily News (on Twitter).
12:29pm: An industry source told Yahoo's Tim Brown yesterday that the Yankees offered Cliff Lee "nearly $140MM over six years, but Lee continues to hold out for a seventh year." Brown does not appear to have full confidence in the source, as the item was placed low in the column and he notes that he was unable to confirm the offer with the Yankees or Lee's agent. We found the link via Joe Pawlikowski of River Ave. Blues, who has a good take on the rumor.
On Sunday, Nick Cafardo of the Boston Globe wrote, "Word is the Yankees are in the $115 million-$120 million range for five years."
It seems likely that the Yankees are willing to give Lee a $23-24MM salary, allowing him to top C.C. Sabathia and own that record for a while, not counting Roger Clemens' pro-rated $28MM in 2007. But if Lee wants to beat or match Sabathia's $161MM for the highest total contract ever given to a pitcher, he needs that seventh year despite being four years older than Sabathia was when he signed. Lee's agent Darek Braunecker could also attempt to duplicate Sabathia's opt-out clause. Braunecker famously negotiated such a clause into A.J. Burnett's five-year, $55MM deal with the Blue Jays.