What is Gregory Polanco Worth?

Gregory Polanco is one of the very best prospects still in the minor leagues. He’s currently hitting .395/.444/.613 as a 22-year-old in Triple-A, and he was a consensus top prospect before he lit up the highest level of minor league pitching. The Pirates have a hole in right field, and Polanco could easily fill it, but he remains in the minor leagues instead.

GM Neal Huntington told Jon Heyman last week that the Pirates will call Polanco up when they deem that he’s ready for the big leagues, and are determined not to rush him too quickly.

“Our evaluation of a player’s readiness mentally, physically, fundamentally and personally to compete and thrive is what drives the decision to call that player up or not,” Huntington said. “My job is to do everything in my power to help our people succeed. It is my hope that most will understand that those within an organization will have a better feel for a player’s readiness than someone in the media who likely has a limited background with the player whom he is voicing an opinion or some scout who works for a different organization and sees the player for five days a week and proclaims the player ‘ready.'”

Huntington added, “I trust our people and when we deem a player is ready, we will look to promote that player.”

One could reasonably argue either side of Polanco’s readiness. On the one hand, ZIPS projected him to be a +3 WAR player before the season even started, and his ridiculous performance in Triple-A would only improve the forecast, but on the other hand, he has less than 150 plate Triple-A plate appearances, and he only racked up 286 at Double-A last year. We’re talking about less than a full season’s worth of playing time above A-ball, and while the talent and performances are obvious, the Pirates haven’t exactly slow-tracked his development. Getting a few hundred more at-bats in the minors probably won’t hurt his development.

Of course, while the Pirates will downplay this aspect of the decision, there’s a financial consideration to his lack of presence in the Major Leagues right now. If the Pirates promoted Gregory Polanco tomorrow, he’d finish the season with approximately 140 days of service, and would likely qualify as a Super-Two arbitration player after the 2016 season, granting him four trips through the arbitration process rather than the standard three. If the Pirates wait another three weeks or so and get his service time below 120 days for this year, they’ll likely avoid that extra arbitration trip and potentially save some real money over the next seven years.

The Pirates were willing to avoid this entire waiting game, however, as they offered Polanco a long-term deal during Spring Training, a deal that would have covered his first seven years of team control and given the Pirates team options for each of his first three years of potential free agency. According to reports from Jeff Passan and Jon Heyman, the guaranteed portion of the deal was worth about $25 million, while the total value of the deal could have risen to $50 or $60 million if all three options were exercised. Polanco passed on the offer, and so he remains in the minors; it is likely that if he had taken the deal, he would already be in Pittsburgh, as the Pirates would have reduced incentives to keep him off the roster.

Rather than rehash the argument over whether or not teams should manipulate service time this way — people will do what they are incentivized to do, and the rules incentivize teams to do this — I’m interested in the valuation that the Pirates put on Polanco’s first seven years. $20ish million seems to be roughly the current standard offer for a player’s pre-arbitration and arb. years if they sign with very low levels of service time: Chris Archer ($20M guaranteed, two team options), Yan Gomes ($23M guaranteed, two team options), and Jose Quintana ($21M guaranteed, two team options) all signed for something in this range at the end of Spring Training, while fellow top prospect George Springer reportedly turned down $23 million from the Astros on a similar kind of offer to the one the Pirates made Polanco. This is basically the template guarantee from teams to low service time players right now.

But is it a match for, or at least close to, what Polanco should expect to earn during his arbitration years? Predicting future salaries is difficult, as you not only have to predict future performance but also how the arbitration market is going to go, and how much inflation we might see in the future. So, instead of looking forward and making guesses, let’s look backwards and see what other prospects in Polanco’s range made during their first seven years of team control.

Using Baseball America’s All-Time Top 100 list, I looked for three prospects ranked essentially in the same spot as Polanco over the five year period from 2003 to 2007. Polanco ranked #10 on their pre-season list this year, so to look for similar level of prospects, I pulled the first seven year earnings (from Baseball-Reference) for the #9, #10, and #11 prospects in those five years, dropping down to #12 in a few cases where a player would have otherwise been double counted. This gives us 15 similarly rated prospects who have finished out their years of team control, and we can look at their earnings to get an idea of what a prospect of this stature has earned recently. Here are those 15 players, and their earnings during their first seven years.

Player Season Rank First 7 Years
Justin Upton 2007 9 $36,721,666
Andrew Miller 2007 10 $10,880,219
Tim Lincecum 2007 11 $81,055,000
Lastings Milledge 2006 9 $2,189,500
Matt Cain 2006 10 $31,744,666
Prince Fielder 2006 11 $57,914,500
Andy Marte 2005 9 $1,601,500
Hanley Ramirez 2005 10 $39,668,000
Dallas McPherson 2005 12 $382,500
Grady Sizemore 2004 9 $23,101,631
Scott Kazmir 2004 12 $30,897,000
Adam Loewen 2004 13 $1,783,000
Gavin Floyd 2003 9 $16,546,000
Francisco Rodriguez 2003 10 $31,069,166
Miguel Cabrera 2003 12 $54,410,623
Average     $27,997,665
Median     $30,897,000

Note that Andrew Miller and Adam Loewen’s totals were slightly inflated due to MLB contracts signed out of the draft, which guaranteed them higher-than-minimum pre-arb payments.

Overall, this is a pretty successful group. Milledge, Marte, McPherson, and Loewen busted, but there are some pretty impressive names on the successful side of the ledger, and some serious money was made by the guys who didn’t bust. Lincecum’s $80 million in earnings is basically unheard of, as he got four trips through arbitration and set records all the way through, but even the other more reasonable outcomes still show the earning potential of a prospect of this stature. The average earnings for the group was $28 million; the median was $31 million.

So, that’s where these $20Mish offers are coming from, right? Take the average earnings of comparable players, then knock a few dollars off because of the fact that the team is guaranteeing the money up front, taking on greater risk than if they went year to year. There are a few issues, though.

For one, we’re comparing 2003 to 2007 dollars to 2014 dollars. MLB is swimming in money, and there has been some serious inflation in MLB over the last decade. That Grady Sizemore earned $23 million does not mean that we should expect Gregory Polanco to earn $23 million; we have to adjust these totals upwards to account for the shifting pay scale. If we inflate the $28 million average/$31 million median at five percent per year over the last seven years, the new average would be $39 million, and the median would be $43 million, and that’s just today’s dollars, not accounting for even future inflation in the arbitration market before Polanco gets there.

Realistically, given Polanco’s pedigree, he should probably be forecasting his team controlled earnings in the range of $40 million, and if he develops into what prospect analysts and forecasting systems think he could be, he’s probably looking at something north of $20 million per year for his free agent years. In other words, if he goes year to year, a reasonable forecast for his income over the 10 years the Pirates sought to buy out is in the $100 million range. The Pirates offered him half of that, basically, with only the first half of that half guaranteed.

Certainly, a player signing a long-term deal shouldn’t get the full value of his expected future salaries, as he is selling a lot of personal risk, and the value of the first few million to a player is substantially higher than the value of the 70th or 80th million, but the discount the Pirates were asking for here is nutty. $25 million for the team controlled years is a pretty decent discount in and of itself; adding three team options is just being greedy.

Of course, getting the free agent years is the reason why teams do these kinds of deals, and basically every player who signs long term has to give up some free agent rights in order to get early guaranteed money. But the price the Pirates were offering justified delaying free agency by maybe a year or two; the third is noxious, and would serve to delay Polanco’s first bite at free agency until after his age-32 season.

Teams are venturing into new territory with these long term offers to players with no major league experience, and certainly, it’s a significant risk to give guaranteed money to a guy you’ve never even seen face big league pitching. But let’s not overstate the risk of players with Polanco’s pedigree; the majority of similar prospects have turned into quality big league players, and failure is the exception, not the norm. Polanco is worth more than $25 million. If the Pirates bring him up and let him show what he can do, he’s only going to get more expensive. Lose the third year option, or give him $10 or $15 million more in guaranteed money; the Pirates will still come out ahead. Don’t pinch pennies when it comes to keeping franchise talents. Once Polanco starts accruing service time, the Pirates will be wishing they had him signed.

Dave is the Managing Editor of FanGraphs.

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Shawn Young
9 years ago

Nice work.

To the part glossed over “people will do what they are incentivized to do, and the rules incentivize teams to [delay service time]”: you’ve written that well, better than many people might at first realize, and I’d like to talk about that. Yes, teams are incentivized to leave guys down, but I’ve never understood why GMs do it. If I’m Neal Huntington (or any GM), I would absolutely love to get hauled onto my owner’s Lear Jet and get screamed at because we paid Gregory Polanco (or some player) say an extra $25M because we called him up too early. What preceded this conversation?

–Gregory Polanco panned out fully and completely into Andrew McCutchen Part Deux
–The owner’s season ticket holders treated the franchise with respect because We Did Everything We Could To Win
–Seven years after I promoted the kid, I still have the coolest job in baseball.

Aren’t people, that is the front office, actually incentivized in their own careers to get MLB-ready talent to the show ASAP?

On a point of copy-editing: Mid paragraph 4 when you write: “… and would likely qualify as a Super-Two arbitration player after the 2016 season,” should that be “2015” season? Or am I confused?

9 years ago
Reply to  Shawn Young

Super Two applies only to players with greater than two years of service, but less than three years. (Specifically, those in the top 22% of this pool by service time.) If Polanco were called up tomorrow, he would end the 2014 season with approximately 140 days of service.

If he played through all of 2015 on the MLB roster, he’d have 1 year, 140 days. Thus, he wouldn’t meet the Super Two threshold until the end of the 2016 season, when he would have 2 years, 140 days.

Shawn Young
9 years ago
Reply to  dcoffell

Thank you one and all.

Matthew Murphy
9 years ago
Reply to  Shawn Young

After 2016 is correct. As Dave mentioned, if he were promoted today, he would accrue about 140 days of major league service time in 2014. By the end of 2015, he would be at 1.140, and then at the end of 2016 he would be at 2.140. The super 2 cutoff has been between 2.122 and 2.146 each of the past five years, so Polanco would likely be eligible at the end of 2016 (at 2.140). If the pirates wait another 20 days, they all but guarantee that he’ll be under the cutoff.

John Elway
9 years ago
Reply to  Dave Cameron

Life in a world without a salary cap. Don’t envy MLB GMs.

John Elway's OtherSelf
9 years ago
Reply to  John Elway


John Elway
9 years ago
Reply to  John Elway


Shawn Young
9 years ago
Reply to  Dave Cameron

I’ll play along inside a rational GM’s mind.

“Today is Opening Day. There’s this thing called WAR and Dave Cameron says that ZIPS says that Polanco is worth three extra wins this year. We squeaked into the playoffs last year. If we start this Polanco kid, either he’s crap and he’s in AA by Memorial Day, he’s ho-hum and in Indianapolis by 4th of July, or he’s a stud.

“If he’s a stud we might sell an extra thousand tickets a game this year because of the excitement surrounding him and those three extra wins. We’re more likely to go to the playoffs. We’re more likely to go deep in the playoffs, selling more tickets and more merch. How about $10M in the owner’s hand today? Maybe the owner pays out more later, maybe not. Maybe, just maybe, We Are Family.

“And me, well I might be Exec of the Year. I can stick around here and do the Billy Beane thing or maybe I’ll move to Hollywood. I have to remember to take the job from the team part-owned by the creepy basketball player turned failed talk-show host, and not the job with the psycho owner who meddles, but either team is willing to pay plenty for talent.

“Actually, forget it. We’ll bring him up in June. It’s not like we’ll be looking up at everybody but the Cubs, 7.5 back of the Brewers on May 8. Right?”

9 years ago
Reply to  Shawn Young

The thing though is that is 1/3 of a season of a 3 WAR player really worth the $10MM++ extra that that 3rd year of arbitration brings? You are looking at 1 WAR, and the gap is actually often smaller, because often the players that you will have filling the holes should be at least 1 WAR.

9 years ago
Reply to  Dave Cameron

Well, if the GM were smarter he would have promoted him in April and responded:

“What you’ve read isn’t quite right. Super-2 status does tend to increase a player’s value — but only if the player pans out. Since Super-2 is a moving target we’d have to wait until late June to guarantee that he doesn’t make Super-2 status, so we’re talking more like a difference two-three months than three weeks. Based on Polanco’s projections he’d be worth about 1.5 wins during that time, which has a value of several million dollars. So basically what we’re doing is realizing a few million of value now, keeping fans happy, and maximizing our pennant hopes, in exchange for a possibility that if we get lucky and Polanco turns out to be great, we’ll have to pay him in two years rather than three.”

9 years ago
Reply to  AF


9 years ago
Reply to  Dave Cameron

Dave – interesting conversation going on over the the Pirates blog, Bucs Dugout, claiming major flaws in your analysis here. My first pass it all seemed to make sense, so maybe I’m not getting the criticism. Here’s a couple sample comments from bloggers over there:

“His conclusion is based on improper calculations!”

“But Cameron makes a huge mistake, which is that he includes a year of FA in his totals for “first seven years.”

“I am not interpreting Cameron’s thoughts; I’m just looking critically at what he did. What he did was wrong, and we shouldn’t be using it as part of our discussion about the merits of the proposed Polanco extension.”

And “we have to get away from the conclusions Cameron has made, because he’s made them in error”

I guess I’m not getting the criticism and the article made sense to me, but it would be helpful to have Dave himself opine (if he cares) by looking at the specific criticisms and weighing in.


9 years ago
Reply to  GP

It’s clear that the people at the Pirates blog didn’t read the article to which Dave linked entitled “the myth of 6 years of team control.” The 7 years comes from the fact that teams leave prospects like Polanco down at AAA until June or so, enabling them to get the last 3-4 months of this season PLUS 6 more from their top prospects. It’s not really 7 years, of course, but it is at least 6 1/2. The fact that teams do this should be pretty obvious to anyone who follows baseball closely and Polanco is just one example of a team using this strategy to help control costs.

If people over at some Pirates blog want to say that Dave’s made some critical error in his calculation as a result, it’s clear that they didn’t read the article to which Dave linked and that they don’t understand that teams keep players down 2-3 months in order to get that extra year of team control. It’s not an unusual occurrence so I’m a little surprised that people who supposedly follow baseball closely don’t grasp it.

I don’t get the criticism either.

9 years ago
Reply to  GP

I guess what they are saying over at BD is that Dave included 8 years of player salaries in his analysis instead of 7. For instance, Tim Lincecum will have made $81 Mil+ between 2007 and 2014, but that is 8 years, and the team would only have controlled him for 7 years had he not signed the extension.

9 years ago
Reply to  Shawn Young

Future potential employers would likely frown upon this, and with the average tenure of a GM being so short, I’m sure that current GMs are well aware of the fact that they will likely be looking for a new job sooner or later. It is a good point though.

9 years ago
Reply to  Shawn Young

Also, that is assuming money grows on trees (which it might look like given the exploding revenues), but paying an extra $25MM sacrifices the opportunity to buy 4Wins.

By starting his arbitration clock earlier you also could lose a year of team control and I’m going to bet on average prospect WAR in year 7 (6 and change) of team control > WAR in full first year of team control.

9 years ago
Reply to  Shawn Young

Shawn, it’s not just the players who pan out that matter. Look at someone like Ike Davis. He was terrible last year – so bad that he got sent to the minors – but he made over $3MM because of Super 2, instead of making closer to the minimum. This year he’s making $3.5MM. So in two years, he’s making close to $7MM for playing subpar baseball. If he was called up after the Super 2 deadline, he would have made, what, $2MM for both years?

It’s not a $25MM overpay, but for a team on the budget (like the Pirates, or somehow the Mets), you don’t want to just throw that money away.

Also, it gives an extra year before you have to consider non-tendering the player. If he plays like Justin Upton, then he’s worth the money. If he plays like Lastings Milledge, then you have to decide a year earlier whether you pay him $3-4MM in arbitration, or whether you non-tender him.