The New York Yankees cut ties with Jason Giambi and Carl Pavano, declining contract options on both players and allowing them to become free agents.

Giambi, whose seven-year stint in New York was marred by suspicion and later his admission that he used performance- enhancing drugs, batted .247 and hit 32 home runs last season. The Yankees chose not to exercise a $22 million option on the 37-year-old first baseman.

Pavano won just nine games for the Yankees after the team signed him to a four-year, $40 million deal in 2004. The right- hander was plagued by a series of injuries to his arm, shoulder, back, rib and buttocks. New York had a $13 million option on the 32-year-old pitcher.

New York is freeing up money to add starting pitchers in a bid to return to the playoffs. The Yankees missed the postseason this year after 13 straight appearances. New York began 2008 with a $209 million payroll, the highest in Major League Baseball, and the team is moving into a new stadium next year that will boost revenue with triple the number of luxury suites and $2,500 front-row tickets.

Pitcher CC Sabathia and first baseman Mark Teixeira are among the free agents the Yankees may target in the offseason.

New York signed Giambi to a $120 million contract in 2001. He hit more than 30 home runs in five of his seven years, though he revealed in last year's Mitchell Report on baseball drug use that he began using steroids in 2001 and stopped at the 2003 All-Star break.

Giambi also told a federal grand jury in December 2003 that he used performance-enhancing drugs, and two years later apologized to fans and teammates for creating distractions. In 2007, he told USA Today that he was wrong for "doing that stuff" and asked to cooperate with former Senator George Mitchell in his steroids investigation.