Pirates Bet on Gregory Polanco with Contract Extension

If you made it to Opening Day and wondered why there hadn’t been a greater number of contract extensions signed this spring, you weren’t alone. Just a few days ago, Dave Cameron wondered that very thing, noting that Kolten Wong was the only player to sign an extension, opting for the promise of guaranteed money rather than betting on the arbitration process and hitting free agency. Over the weekend the number of recent extensions doubled, or increased by one, as Gregory Polanco and the Pirates came to terms on a contract extension worth $35 million over five years — with two team options for another $25 million total — according to Ken Rosenthal after Jeff Passan first reported the deal. Polanco only has one year of service time, and with the extension not kicking in until next year so this contract has the potential to buy out three free-agent seasons, but given Polanco’s lack of production thus far, the team is making a bet that Polanco will be better than what he has shown.

The past few springs have seen quite a few contract extensions, and this year is certainly a down year in that regard. Here are position-player extensions from the past few years, including Polanco and Wong. The statistics included here are those produced during the player’s last season prior to the extension.

About a month ago, I discussed potential contract-extension candidates this year, and I mentioned both Polanco and Wong. In terms of quality and career production, Wong was near the middle of players who’d recorded at least two years of service time. Polanco, on the other hand, sat near the bottom of the list of players who’d recorded between one and two years of service time. Players like Mookie Betts and George Springer headlined that list, but Polanco was also behind Kevin Pillar, Matt Duffy, David Peralta and Rougned Odor in terms of production. It’s possible we are seeing a bit of a trend in players and teams failing to agree to extensions that buy out free-agent years, but there could be a trend in terms of the declining quality of players who have been locked up.

Gregory Polanco is certainly a talented player. He was ranked between 10 and 25 on most prospect lists heading into the 2014 season. That 2014 season was ultimately a disappointing one, however, which included Polanco losing his job to Travis Snider and a demotion to Triple-A. Last season, Polanco was better, using a slightly below-average batting line of .256/.320/.381, along with good base-running, to make himself a roughly average offensive player. We don’t have enough information to make a complete evaluation of his defense, but playing from a corner, it can be difficult to provide a ton of positive value defensively. The result last season for Polanco was a roughly average 2.3 WAR with projections for this season suggesting much of the same.

Given that they play similar positions for the same team, it might be easy to draw comparisons to the deal Starling Marte signed two years ago. The guaranteed money is roughly the same — and perhaps nearly identical with inflation — and the Pirates receive potentially three free-agent seasons in total from both contracts. However, as the chart above shows, Marte was a much better player at the time of the contract. Last year, when the Marlins were locking up Christian Yelich, a much more similar situation to Marte’s, the Marlins had to guarantee an extra year and nearly $20 million more to get the same number of controlled seasons. It has become harder to lock up higher-end players, so teams are forced to go to younger, less-proven players to sign an extension. Kolten Wong has been roughly an average player in the big-leagues and Polanco is very much in the same vein.

Thirty-five million dollars is a lot of money to guarantee an average player when the team already has control over the player’s next five seasons. The appeal of a deal like this for Polanco is easy to see. Polanco was set to make the major-league minimum for 2016 and 2017, followed by three non-guaranteed years of arbitration. He will now receive a guaranteed $35 million for those seasons plus the first year of free agency. There are two “worst” case scenarios for Polanco, depending on how you look at it. Both scenarios are pretty appealing. Either (a) Polanco gets hurt or gets bad (the worst) and he gets $35 million despite failing to deliver on his promise or (b) Polanco plays very well, Pittsburgh exercises his options and his free agency is delayed three years (the “worst”) and Polanco heads to free agency with $60 million having just finished his age-31 season. Polanco turned down an extension before reaching the majors, but this deal presumably has a higher guarantee after Polanco bet on himself even if he has not reached the level expected of him at that time.

For the Pirates, the team adds another cost-controlled piece for their future. They successfully extended Andrew McCutchen and Starling Marte — and while they also extended Jose Tabata, that deal didn’t work out as well. In terms of risk and reward, this deal is somewhere in between Marte and Tabata. The guarantee to Polanco is double the amount offered to Tabata, but Polanco has shown considerably more promise than Tabata did at that time. Polanco has not proven himself as much Marte, but Polanco is younger and might have some untapped power potential given his size, his minor league ISO (.176) and decent patience (8.9% MLB walk rate) relative to his strikeout rate (18.6%).

If Polanco does not get better, and his base-running and defensive numbers decline into his late 20s, there is the potential for this deal to look a lot like the one signed by Jedd Gyorko, who was traded with cash to St. Louis this offseason. For the Pirates to do well in this deal, Polanco needs to post better numbers to make those free-agent seasons worth buying out. The Pirates are clearly betting on improvement, and if Polanco does improve, the team will have its third bargain in the outfield after the success of Andrew McCutchen and Starling Marte.