The extent of the Yankees' interest in Sheets and Cruz is not known, but even after adding CC Sabathia, A.J. Burnett and re-signing Damaso Marte, the team continues to explore the markets for both starters and relievers.

Both Sheets and Cruz are Type A free agents who were offered salary arbitration, but they would cost the Yankees only fourth- and fifth-round draft picks. The Yankees already have signed three higher-ranking free agents — Mark Teixeira, Sabathia and Burnett.

Sheets, while a physical risk, could be the Yankees' answer to Brad Penny and John Smoltz, both of whom signed with the Red Sox for relatively low base salaries with the chance to earn significantly more through incentives.

Cruz, on the other hand, makes more sense for the Yankees than he does for any other club. Teams are reluctant to forfeit a first-round pick for a setup reliever. But an aggressive spender such as the Yankees, because of a flaw in the compensation system, gives up a lower-round draft pick with each Type A free agent that it signs.

The Yankees' priority, however, remains free-agent lefty Andy Pettitte, who rejected an offer of a one-year, $10 million contract yet appears to have no other alternatives.

SI.com, citing a baseball source, reported Tuesday that Pettitte is weighing a lesser offer to return to the Astros. However, Astros GM Ed Wade told FOXSports.com, "I haven't had any discussions with Andy or any of his representatives at all. We're up against our (budget) number right now."

The possibility of the Yankees re-signing Pettitte cannot be dismissed until the team fills his spot in the rotation. But Sheets and Cruz combined probably would not cost the Yankees much more than $10 million.

At the moment, the Yankees are committed to paying $187.975 million to 17 players, according to salary information compiled from the Cot's Baseball Contracts web site.

That number would climb above $190 million if the Yankees spent $10 million more on pitching and followed through on their plan to trade Xavier Nady or Nick Swisher. But the payroll still would be below last season's Opening Day figure of $209 million.

The question, then, is which pitchers the Yankees will choose — and whether they will sign another catcher to protect against the possibility that Jorge Posada recovers slowly from shoulder surgery.