NEW YORK -- In order to get the two-year contract he coveted, David Cone would have had to cut the New York Yankees out of the negotiations.

Unwilling to leave baseball's best team, Cone settled for taking as much of George Steinbrenner's money as possible.

	Cone

Cone signed a $12 million, one-year deal with the Yankees on Monday, beating a deadline that would have ended his career with the team. He passed up a chance to seek a two-year contract elsewhere.

Cone, who has pitched for 10 years in New York -- 5½ seasons with the Mets and 4½ with the Yankees -- had stated his preference was to stay with the Yankees.

"A lot of teams didn't take me seriously because they knew I loved playing with the Yankees," Cone said. "The only way to get taken seriously was to cut off the Yankees. I wasn't prepared to do that. ... The Yankees were only going to offer one year, but they would do a top-dollar contract. They did."

Left-hander Allen Watson signed a $3 million, two-year contract with the Yankees on Tuesday.

Cone's salary is the fourth-highest for a pitcher, trailing only the averages of Kevin Brown ($15 million), Randy Johnson ($13.1 million) and Pedro Martinez ($12.5 million).

Cone, 36, made $9.5 million last season, in which he was 12-9 with a 3.44 ERA, second-best in the American League. He pitched a perfect game July 18 against Montreal.

While the Yankees were unwilling to give Cone the second year, they did give him an approximately $2.5 million raise.

"You can't overstate what David Cone has meant to the success of the New York Yankees in the '90s," general manager Brian Cashman said. "We have been in the postseason every year since he was acquired in 1995, with three world championships in the last four seasons. David is a proven winner and an outstanding leader. We are extremely happy he will be back in 2000."

A clause in Cone's expired contract gave the right-hander the right to prohibit the team from offering him salary arbitration. If Cone had exercised that right and didn't sign with the Yankees by Tuesday, New York would have been unable to re-sign him before May 1.

"The Yankees made it perfectly clear that they weren't going to budge off their one-year offer," Cone said. "I was faced with a deadline to decide whether to cut off the Yankees or not. It was a tough choice."

Cone was 9-4 with a 2.86 ERA at the All-Star break, but struggled in the second half, going 3-5 with a 4.28 ERA. Yankees manager Joe Torre was forced to give Cone extra rest down the stretch. That move paid off in the postseason as Cone rebounded to go 2-0 with a 1.29 ERA in two starts.

Cone had an aneurysm in his right shoulder in 1996 and had arthroscopic surgery to repair the shoulder following the 1997 season. Dr. James Andrews examined MRIs, X-rays and stress tests done on Cone's right arm and gave him a clean bill of health.

"It reaffirmed what I felt. I'm not a time bomb," Cone said. "I do have normal wear and tear in the shoulder. If you go looking for something wrong, you can find it. But I just gave normal wear and tear and I can go on and pitch for a number of years."

He went 20-7 with a 3.55 ERA in 1998, prompting New York to sign him to an $8 million, one-year contract with $1.5 million in performance bonuses, all of which he earned. Cone has the same bonus clauses in the new deal: $100,000 per start from 15-31.

Watson, 29, went 4-1 with a 2.89 ERA in 24 games this year for the Yankees, who signed him after Seattle released him. His new deal calls for a $200,000 signing bonus, $1.2 million next year and $1.6 million in 2001.

"Allen has shown the ability to pitch effectively in a variety of roles," Cashman said. "He is a quality left-hander who can pitch long, middle and short relief with the background to start a game if necessary."

Meanwhile, the Yankees have made four members of their baseball operations staff vice presidents: director of major league scouting Gene Michael, director of scouting Lin Garrett, director of international scouting Gordon Blakeley and director of player personnel Billy Connors.