The defending champs are expected to decline arbitration on a group of veterans including outfielders Johnny Damon and Hideki Matsui and pitcher Andy Pettitte.

As the New York Post's Joel Sherman first reported Tuesday morning, the Yankees do not want to pay the expensive salaries that would come from arbitration, but the Bronx Bombers are still interested in having Damon, Pettitte and Matsui return for 2010. Damon and Matsui both made $13 million each in 2009 so the Yankees don't want to go into arbitration, where they'll likely have to pay them $15 million each.

Pettitte bagged roughly $11 million this past season, his 12th with the Yankees.

The Yankees are also set to decline arbitration on outfielder Xavier Nady and catcher Jose Molina.