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.