Discussions have reportedly stalled between Damon and the Yankees, and because of that, the two-time All-Star told the New York Post on Tuesday that he is ready to begin exploring other alternatives.
"I am going to start looking around," Damon told the newspaper. "Teams are getting better, and there are teams interested. I can't wait forever, and I am sure [the Yankees] are trying to figure things out. I have to be ready."
The Yankees do have interest in retaining Damon, but only at their price. The New York Daily News reported on Sunday that the Yankees hadn't made an offer to Damon because his agent, Scott Boras, informed them not to bother unless it was for at least three years and no less than the $13 million he made in 2009.
New York would utilize Damon as playing a mixture of left field and designated hitter, but its idea of an acceptable contract for the 36-year-old is approximately in the range of two years and $18 to $19 million.
Yankees general manager Brian Cashman acknowledged last week at the Winter Meetings in Indianapolis that there was nothing necessarily close with Damon or any other free agent.
"I am definitely not in a position right now where I feel like I'm ready to do anything," Cashman said. "The next step isn't ready to happen now, based on my conversations. There shouldn't be another shoe to drop immediately."
Damon told the Post he's paying close attention to what happens to the top free-agent outfielders, Matt Holliday and Jason Bay, saying, "The stuff on [Holliday] is starting to pick up. And wherever Bay doesn't end up will open a door for me."
Last week's acquisition of Curtis Granderson from the Tigers in a three-team, seven-player trade has allowed Cashman to take more of a hard-line stance on Damon. Granderson is owed $23.75 million over the next three seasons and has a club option for 2013, an affordable contract in the Yankees' eyes.
The Yankees are also focused on adding at least one more starting pitcher, as secondary free agents like Joel Pineiro, Jason Marquis, Ben Sheets and Erik Bedard remain after John Lackey agreed to a five-year deal with the Red Sox on Wednesday.
Hideki Matsui, meanwhile, finalized a one-year contract with the Angels on Wednesday, deciding not to wait to see how Damon's situation would be resolved. The Yankees had minimal interest in retaining Matsui and made Damon more of a priority, sending the World Series MVP looking for other alternatives.
While Damon could help fill the void at designated hitter, Cashman said last week that he wouldn't be against trying out left-handed slugger Juan Miranda, a first-base prospect from Cuba who batted .290 with 19 homers and 82 RBIs this season for Triple-A Scranton/Wilkes-Barre.
Manager Joe Girardi has expressed fondness for a "revolving door" designated-hitter slot as well, which would allow hitters like Derek Jeter, Jorge Posada, Alex Rodriguez and Mark Teixeira to take days off from playing the field while keeping their bats in the lineup.
Damon hit .282 with 24 homers, 82 RBIs and 12 stolen bases this year, serving primarily as the Yankees' No. 2 hitter throughout his fourth season in New York after shifting from the leadoff spot in Spring Training.
Bryan Hoch is a reporter for MLB.com. This story was not subject to the approval of Major League Baseball or its clubs.