UPDATE: The New York Times' Michael S. Schmidt (I wish I was a sportswriter with the name of a hall of famer) says that according to two knowledgeable sourses about the matter, the Yanks want to sign Teixeira, but don't want to pay him more than $160mm/8 years. That seems smart on the part of the Yanks. But, you can bet Boras will do everything he can to get an offer from the Yankees, and a higher one than $160mm. If the Yanks really won't go past $160mm then I don't see why he would sign with them, especially when he has/will have higher offers than that from Anaheim, Washington, Boston, and possibly Baltimore.
I know that we've seen a lot of articles on Tex recently, but his signing will affect lots of teams, including the Yanks. Kat O'Brien from Newsday writes that the Yanks are "on the periphery of the bidding." Apparently Scott Boras, the super-agent, initiated a conversation with Cashman about the parameters of a deal with Tex. She claims that a source said that the Yanks would have to give a 8 year deal with a total of $180mm to $185mm. She says that Boras claims the ESPN report saying that he told the Red Sox that it would require a $195mm contract was incorrect. Follow all the reports at MLBTR.
I still think he'll be a National. They will offer the most money, and for a Boras client that matters the most. Remember when A-Rod signed with the Rangers? Tex won't make the Nats competitive, and I don't really see him bringing in a lot of fans, so I'm confused as to why they would make that kind of investment for him. However, that is what Ted Lerner wants to do, and that is what he will do. I think if he wants to get nation-wide attention and put fans in the seats his best decisions would be Randy Johnson and Manny Ramirez. Randy is going to get his 300th win next year, which means every start he makes with 299 wins under his belt will sell out. Manny brings a media circus with him everywhere, and all publicity is good publicity. Signing one of those guys to get the Nats on the national radar (no pun intended) would be a smarter decision because they would only require short term deals, freeing future payroll for locking up young players. However, Lerner is set on Tex and that's why he'll get him.