Lugo, while not in the class of Adam Everett or Jack Wilson with the glove at SS, would be an improvement over Jeter.
Then you move Jeter to 2B in 2007. And, you can either trade Cano (who would be a legit trading chip – given his age and contract) or move Cano to the OF in 2007. (With Sheffield – assuming they extend him – becoming the full-time DH in 2007.) Cano goes to LF and you move Matsui to RF.
Giambi would love to play 1B all the time anyway.
Or, as a Plan B, you just eat Jeter’s glove for another season after this year, then go with Ramiro Pena at SS in 2008, move Jeter to 2B, and figure out what to do with Cano.
I know that many are thinking now “What about A-Rod at SS?” While that might make some sense, I don’t see Jeter moving off SS for Alex. Yes, it’s an ego thing. Think Derek doesn’t have an ego? He might move for a new free agent or a kid coming up, but, with A-Rod, that’s an admission of “He’s better than me” that I think Jeter would have a hard time accepting.
Plus, who can say for sure that Alex, given his size, age, and time off the positon can move back to SS and do a good job?
When you look around the Yankees team, and their contracts, there’s not a lot of positions to move Jeter to – and if they sign a RF after this season, that’s one less moving part to play with in the shuffle.
It’s either move Jeter to 2B in the next couple of years, or the OF (which he doesn’t seem to want) next year, or run out of options soon.