First Pitch: Why a Gregory Polanco Extension Might Not Make Sense in 2016

Andrew McCutchen signed his extension after his second full season in the majors.

Starling Marte signed his extension after his first full season in the majors.

It wasn’t the best extension, but Jose Tabata signed his deal in the middle of his first full season in the majors.

Looking at those examples, it’s easy to see that we’re just now entering the time period where it makes sense for an extension for Gregory Polanco. This is all despite the fact that an extension seems hopeless, since the extension topic has surrounded Polanco since before he arrived in the majors. The truth is that we’re just now in the early stages for when you’d usually expect an extension.

And it’s not just the Pirates examples that point this out, but other examples around the league. There have been five contract extensions since 2011 with players who have less than a year of service time. During that same time, there have been 22 extensions for players with between one and two years of service time (including Tabata and Marte), and 33 extensions with players between two and three years of service time.

So Polanco is now entering the time where it makes sense for an extension. The only problem with that is it might not make sense for Polanco to sign an extension right now.

Polanco said today that he hasn’t heard from the Pirates, and that he’s still open to a deal. That was the extent of the conversation on his extension (speaking as the person who asked him if he’s still open to an extension), so what I’m about to follow with is pure speculation and opinion based analysis of the deal.

Right now, an extension for Polanco would be difficult. You look at Marte, and he was coming off a very good season where he posted a 4.8 WAR. He also came at a discount at $31 M guaranteed. By comparison, Christian Yelich had a 4.4 WAR in his first full season, and followed that by signing a $49.6 M guaranteed deal.

Polanco isn’t like Marte or Yelich. The upside is definitely there, and I could see a scenario where Polanco could be better than those guys. But he’s still an unknown. His first full season had a 2.3 WAR, which isn’t horrible, but about half of what Yelich and Marte put up. His season included a poor first half and a stronger second half. It included a high percentage of hard hit balls that went for outs. It included a nagging knee injury that might have played an impact on his performance.

If I’m Polanco, I’m not signing a deal right now, when there could be so much more guaranteed money available next year with a breakout 2016 season.

If I’m the Pirates, I try to get a deal done now by “overpaying” a bit for his current production, banking on the possibility that he does have the breakout season in 2016, and that “overpayment” would look like a value in a year. This comes with the disclaimer that I think Polanco will break out, and have been a huge fan of his upside for pretty much his whole career.

But you have to wonder the implications of giving Polanco such a deal. Let’s say that the Yelich deal is an “overpay”, since Yelich got that deal with much better production than Polanco had. That deal would guarantee Polanco more than Marte, even though Marte did more to deserve his deal. It would guarantee Polanco nearly as much as McCutchen was guaranteed. McCutchen had a 3.4 WAR his rookie season, followed by a 3.5 WAR his first full season, and a 5.5 WAR the year before his extension.

You’d have to think that it would send a bad message that Polanco was paid so much more than Marte, and about the same as McCutchen, for much less upside. So far, all of the deals we’ve heard about that have been turned down have been low in guaranteed money, but would pay Polanco if he is productive. And that seems about right at this stage in the game, before Polanco has that breakout campaign.

When two sides are open to an extension this early, the extension tends to get finished. But I’d be surprised if an extension for Polanco comes this early. It doesn’t seem to make sense for Polanco, because the potential risk far outweighs the potential reward if he has a breakout season. And if the Pirates paid him what they’d need to pay him to negate that reality, then they’d be taking on a ton of risk and giving him a high guarantee, which isn’t an approach they took with their other two outfielders. I feel like that wouldn’t go over well for them, if not for the other two outfielders, then for any future negotiations with high upside guys who want to be paid for that upside.

The good news is that Polanco is under team control through the 2020 season, so there is plenty of time for an extension. I wouldn’t be concerned about the lack of a deal until Polanco is eligible for arbitration. Until then, I could see there being road blocks to a deal until Polanco has his breakout season.

**Had some issues with the site last night, which some of you may have noticed with some weird error messages. I was able to get the error messages removed pretty quickly for you guys, although we had issues where we couldn’t post articles. Those were fixed overnight after an update to one of our plugins, which is why you are getting this First Pitch at 7:30 AM. We’ll have full coverage today of the arbitration deadline now that the site is working again.

**Pirates Avoid Arbitration With Jeff Locke. The first of the pre-arb agreements. There could be more today with Mark Melancon, Tony Watson, Francisco Cervelli, Jared Hughes, and Jordy Mercer eligible for arbitration. The Pirates like to reach deals before the deadline for arbitration filing, and go to arbitration no matter what once the numbers are filed.

**Chris Stewart Reportedly Agrees to Contract Extension. Another pre-arb agreement. I wrote why this move makes sense in the article. The summary: Stewart has been one of the best backup catchers in the league the last few years, and you can never have too much catching.

**Gregory Polanco Still Open to Extension With the Pirates. Polanco met with reporters yesterday at Pirate City and discussed being open to an extension, his hard hit ball data, his knee, and his stronger second half in 2015.

**Pirates Have the Top Rated Outfield in Baseball. Remember last year with the Pirates vs Marlins debate? It looks like the Pirates are leading that debate for now.

**Andrew McCutchen Drops Slightly in Center Field Rankings. The overall outfield rankings are good, but McCutchen dropped in a separate ranking of individual center fielders.

**Third Time Could Be the Charm For Jameson Taillon Arriving in the Majors. From Wednesday, Jameson Taillon is finally healthy and looking to make the jump to the majors, finally, after a few years of waiting.

  • If Polanco doesn’t sign an extension he will be a free agent at 28. Being a FA before the age of 30 is a big deal. If he is as good as Heyward he could get a 125-175m contract at that point.

  • I think if I were Polanco, I would look at players like Mercer, Alvarez, and Walker. I would then assume that I will make:
    -$500,000 in 2016
    -$500,000 in 2017
    -$3,000,000 in 2018
    -$6,500,000 in 2020
    -$10,000,000 in 2021
    -$15,000,000 in 2022 as a free agent
    -$15,000,000 in 2023 as a free agent
    That is a total of $50,500,000 that he can very reasonably assume to make. (I don’t know this for sure but my guess is that professional MLB players have the ability to get insurance to cover lost wages if they can’t play again. This would give him some security if he doesn’t accept the offer.) I would also assume that he’s pretty much locked into the $20,000,000 non-free agent years. So in that case, he would not consider $30,000,000 a remotely reasonable offer. It almost suggests he will be a complete failure by his free agent years.

  • “And if the Pirates paid him what they’d need to pay him to negate that reality, then they’d be taking on a ton of risk and giving him a high guarantee, which isn’t an approach they took with their other two outfielders. I feel like that wouldn’t go over well for them, if not for the other two outfielders, then for any future negotiations with high upside guys who want to be paid for that upside.”

    I don’t disagree with the conclusion, but the Pirates can most likely forget about extending young players if the above logic holds.

    Not only are the Cutch/Marte deals already obsolete due to basic salary inflation with piles of money flowing into the game, but the market has seemed to correct itself away from uber team-friendly deals. Players are demanding higher guarantees for the privilege of keeping them past six years of control, and I’m not sure that’s worth the risk for the Pirates.

    I think in order to extend guys now, they’ll have to do what they *tried* previously with Polanco. It’ll just take the right player to pull the trigger.

  • But the risk of NOT signing now could be massive. If he has an injury and doesn’t improve at the plate, he might never land a big contract.

    He’s made less than $1M in his life, so if he’s looking at $30M guaranteed with the potential for more, it’d be hard to turn down (though he might).

  • If I were Polanco I would agree to a longer term contract at below market value. A person only has to get rich once to be financially secure. If he outperforms the contract, he has his whole career to get his big contract. The risk- reward of waiting to maximize his opportunity is not good.
    When Jose Tabata signed his long term deal with the Pirates, he was criticized for selling his services well below what he actually should have received. At the time of the signing Neal Huntington was congratuated for making a shrewd financial move. Jose Tabata seems pretty smart with his decision now.

    • This is true, get the guaranteed money a and sell out two years of FA. If you’re polanco, best case scenario you make 30+ million and hit the open market still in your prime, sign a giant contracy and only be a little less filthy rich than if you would have been if you went through arbitration, worst case scenario, he blows out his ACL, can never play again and still has 30+ million dollars. On paper I get why guys wait sometimes, but I personally can’t fathom risking losing out on 30 million dollars just because there’s a decent chance I might get 50 million dollars.

  • As I stated earlier Polanco would be foolish to sign an extension with an early buyout. He will be more than comfortable making the league minimum and his resulting payoff down the road will be considerable. I always take issue with “years of control”. This club will not pay market rates for a player in the last year or two of control. Cole will not finish out his years of control because his arbitration salary will be immense. This team moved on from Walker and it may move on from Melancon due to the arbitration awards. Cole’s and if Polanco’s (assuming he attains star status) will each be getting huge arbitration payoffs. Salaries will not stay static but will be dynamic with an amazing amount of upward pressure.

  • I see the Pirates has having a ton of leverage concerning Polanco. First, he didn’t earn a big signing bonus. Second, he hasn’t broken out yet. Third, Pirates have two high upside OF prospects starting the year in Altoona.

    If I were Polanco, I’d take the first decent offer the Pirates put out there. Probably why he has stated he’s open to an extension.

    • How did that work out for Cutch?

      • Cutch has stated signing his extension helped him reach his ceiling. The financial security it provided allowed him to play worry free.

        • He left a boat load of money on the table. I am not taking any sides on this issue but if you are counseling someone you would need to bring up the potential for future cash streams. Cutch is very well paid and his children and grandchildren should be taken care but the fact that his contract is now considered a steal I doubt if many others would follow. Walker I believe turned down 3 years at $27 m. That tells me that no agent is going to allow their client to pursue a below market contract for years of control. You are betting on yourself and most professional players would take the bet.

          • McCutchen and Walker are successful MLB players, Polanco is not. That’s the chance the player and the club take

          • So you’re using the Walker example as a broad brush for what every agent will advise their client to do? What about Marte, Yellich, Dee Gordon, etc…. ?

          • Looking back at it now, it’s clear he did, but back then it wasn’t as lopsided of a deal as it is now. He made the decision he thought was best for him, and by all accounts has no regrets about his decision.

          • Its a bit revisionist to say he left a boatload on the table.

            Remember, he didnt break out until after the extension. So while yes, he did leave some on the table it wasnt a massive amount since he was not near an MVP level talent. His deal was nice to the team, but in the area of fair.

            • I think that’s exactly the point though, isn’t it?

              Cutch can’t go back and change that decision, but you can damn sure bet other players at similar stages of their career see how that turned out. They *can* adjust their expectations, and you’re seeing that with higher guarantees.

              • I certainly thinks its a factor, but as far as it altering players a ton im not sure. Its not like that logic (i might break out after signing a good deal that isnt great) wasnt there prior to Cutch. Cutch seems to feel his deal was a factor why he was able to focus on just his game.

                I think its always a factor for a player who hasnt “hit his peak” to worry he’s signing for less, but thats the gamble i suppose. The guarantees is a market change, but also not something i think extended players are clearly getting each time. Time will tell if players getting extensions all start getting the same level of guaranteed money as FA types.

          • The agents work for the players, not the other way around. McCutchen did what he wanted to do, and it’s totally possible others will too. It’s also possible Polanco will hold out for free agency.

            Marte and Cutch are examples of team-friendly contracts, but if Polanco still has Tabata’s number, I’d bet he’d tell him take the money sooner.

          • Potential cash streams vs. the chance of injury and your career being over. – Polanco just got PRI in his knee this off-season, you think he isn’t thinking about what happens if his wheels are gone?

            • At the end of the day- financial security is worth more than the difference in your life 7 million dollars a year is to 10 million dollars in year in terms of your lifestyle. – 2 million now vs. a few hundred grand makes a WORLD of difference.

      • Are we worried about the team or the players? I’m not worried about a guy who’s going to have made 55 million+ dollars by the time he’s 32. He seems okay with it as well. He knew what he was doing.

        • And I’m not worried about a billionaire owner and his rich buddies possibly losing a couple bucks in a given season.

          See how this works?

          • Scott Kliesen
            January 15, 2016 7:50 pm

            Yeah, let’s root for Nutting to lose money so we can return to the good old days of Kevin McClatchey.

    • The game and the contracts have changed since the McCutchen extension. Using that as an example or model is foolish in my opinion.

      • The correlation is trading future potential earnings for sure-fire financial security. This decision is as relevant today as the day Cutch signed his extension.

        • Then why are a lot of the new contracts being signed include player opt outs?

          • Yes, but those are not extensions, those are with guys who are already FA’s.

            • Theres a difference?

              • Age would be a minor difference i think, since a big reason for opt outs is guys hitting FA again before the hit an age that dents FA.

                If Polanco got a good but not elite deal that set him up for another FA run at roughly age 30 its tempting. Guaranteed money now, while not handicapping himself later. Any opt out wont make any sense for PGH, and he’d be losing money now if he waited for that.

                Which isnt to say he signs the deal, but that he’d see more value in a regular deal (regular as in without an opt out after 2 years) than a 28 year old player who sees an opt out as a must.

            • http://mlb.mlb.com/pa/info/cba.jsp

              And fwiw, this thing expires in 2016. That may factor in a little bit too.

              • I read a great article can’t remember where now to save my life. But pretty much laid out why the Pirates specifically Nutting isn’t spending big money on players now. The CBA is a huge reason and the deal w Root Sports is about to expire. The article pretty much said they didn’t want spend now, and not know what will happen w the CBA. If there is more or less shared money, possible salary cap, heaven forbid another strike. I would assume Polanco and Cole are the #1&2 priorities to sign or hang onto has long as possible, then trade.

                Me personally I wouldn’t sign Polanco now, until we figured out what we are doing w Mark M. A 10 mil closer on a team w a 100 mil pay roll is a lot. Is the shark leaves Polanco will get a big chunk of his money.

                • I believe it brother. That’s what a good businessman does.

                  If Bernie Sanders had his way, Polanco wouldn’t get 20%. 🙂

                  • I really wish baseball would enforce some sort of minnium spending for clubs. It really isn’t fair to the fans, when a team like Cincy who was good for a few years says time to blow it up. The Reds won’t lower ticket, beer, food or parking when they suck. And you look at the Buccos now, 100 mil if they spent another 40 mil this year they could sign Chris Davis, even to a one year deal and better pitcher than VS. But that will never happen, but in the same breath if Nutting want another 2.5 mil fans to come to PNC he better spend some of his money. 5th richest owner in baseball and he is cheap.

          • Other other than Stanton, who under team control for multiple years has signed an extension w an opt out clause? Usually it’s for those in FA.

            • But it’s not exclusive.

              If Polancos agent is worth a damn, he knows the Pirates TV deal expires right around the time his client is supposed to walk. So more money is available to GP.

              Not to mention the CBA possibly changing next year.

    • Pirates have no leverage, as they can’t afford to pay the going prices these days. They need to sign their young guys to early extensions….

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