What Does Josh Harrison Need to Do to Justify His Contract?

The Pittsburgh Pirates signed Josh Harrison to an extension today, buying out control of three free agent years, while also guaranteeing his contract through the 2018 season. This comes after Harrison put up a 5.0 WAR in 2014, which earned him the starting third base role this year.

I don’t think anyone expects Harrison to repeat that WAR going forward. A lot of that was fueled by his offense, with a .315/.347/.490 line in 550 plate appearances. The average was fueled by a .353 BABIP, which is much higher than his career .314 number. That number is more in line with what Harrison had in the minors. He saw an increase in power, which might have been due to the fact that he had a career best line drive percentage, along with lowering his ground ball rates and raising his fly ball rates from 2013 to 2014.

It’s possible that Harrison could still put up good numbers going forward, but expecting last year as the norm is probably a bad idea. That said, what would Harrison need to justify his deal?

The current deal works out to $27.3 M guaranteed over four years. That includes his $1 M signing bonus, and the $1 M buyout. That averages out to just under $7 M per year. A win on the open market has been worth at least $6 M in recent years. That means Harrison needs to put up a 1.15 WAR each year to justify his contract.

That shouldn’t be a hard thing for Harrison to do. He was excellent defensively at third base last year, with a 7.0 UZR/150. The defense alone should give him the bulk of the value needed to justify this deal. If he winds up somewhere in the middle of his 2014 offensive performance, and his 2011-13 numbers, then he will be worth the yearly price. In terms of his yearly contributions, he’d need to be worth a maximum of 1.7 WAR in 2018 to justify the $10 M payment.

If Harrison settles in at a 2.0 WAR going forward, then he will more than justify this deal. He would even be worth the option years in 2019 and 2020 with that production. And with his strong defense at third base, it should be easy for him to reach those levels, even if the bat does regress going forward.

  • He doesn’t have to do anything to ‘justify’ his contract. He signed it, and that was the last step.

  • pilbobuggins
    April 9, 2015 4:09 am

    Why should josh not be expected to be as good as he was last year? Greatness is not given it is earned. Maybe jhay does not put up the #s he did last year, then again no one expected him too put up the #s he did last year he earned every bit of his playing time eventually working himself into a starting gig and a nice contract. Whether jhay puts up the numbers he did last year is yet to be seen, not expecting him to is unfair to josh until he proves otherwise he deserves the benefit of the doubt.

    • His insanely high BABIP?

      • pilbobuggins
        April 9, 2015 1:51 pm

        His insanely huge heart,hustle and will too succeed are what should be focused on. I get extremely tired of a humans being condensed down into a string of numbers on paper. Stats are tools not life.

  • The Pirates are paying for about 1.5 WAR per season here. The standard arb rate is 40% of market for year one, 60% for year two, and 80% for year three. So if you assume open-market value is $6M/win and you assume 5% inflation, the win-values for Harrison’s next four years are 2.4M, 3.8M, 5.3M, and 6.9M. They’re paying him 3.8 (including bonus), 5, 7.5, and 11 (including buyout), so they’re paying for 1.6, 1.3, 1.4, and 1.6 wins, respectively, over the next four years – 5.9 wins total, about 1.5 WAR per season.

    Harrison projects for about 3 WAR in 2015 at age 27/28. Assume a 10% yearly decrease in production as he ages, and the next four years would be 3, 2.7, 2.4, and 2.2, which should cost 7.2M, 10.3M, 12.7M, and 15.2M, $45.4M total. So the Pirates are buying $18M worth of value for the four guaranteed years. Harrison projects for 2.0 and 1.8 wins, respectively, in the option years, which would be worth 14.6M and 13.9M according to our prior assumptions ($6M/win, 5% inflation). They’ll pay an extra 20.5M for those years if they exercise both options, so that’s another $8M of value.

    Altogether, it’s about $26M worth of value, for which they paid $24.5M (the 27.3M guarantee minus the 2.8M they’d already agreed to pay Harrison in 2015). I’m not totally sure it makes sense to think that the amount of the guarantee should equal the amount of expected surplus value, but it seems reasonable, in which case this is a perfectly fair deal, give or take a percentage point or a decimal here or there.

  • Love the deal, but imagine how Neil Walker feels about this contract extension…also check out my predictions for the 2015 Pirates season on:

    https://beyondpittsburgh.wordpress.com/2015/04/08/2015-pirates-prediction/

    Thanks to all.

    • I’d almost guarantee if Neil Walker was willing to give up three free agent years for about $10m each he’d have been locked up two winters ago. Neil can be a part of this club past 2016 if he wants to.

      • Not sure Pirates want to go that many years guaranteed to Neil given his age and injury history. His back may be ok now but once a bad back always a bad back. Will get worse with age. Don’t get me wrong, Neil is good for the Pirates and love watching him play. Have assumed they will not sign him long term guaranteed for a couple of years. Like Martin, someone will overpay when he hits the market and I hope Neil gets it. Never will I begrudge a guy if he gets big money. That is the nature of the beast.

  • Open market $/WAR is not the best way to evaluate an in house extension.

  • KauaiCoffee
    April 8, 2015 4:19 pm

    Harrison will provide 1 WAR per year just with his defense. If he hits even reasonably well (e.g. 10 HR, 15 SB, .330 OBP) he will provide tremendous excess value over this contract.
    This is a good deal for the Bucs. $30 million does not buy much these days in baseball. This is a VERY team-friendly deal.

  • There are two different values for WAR. Dave Cameron’s number is the WAR for free agents. But for in-house guys, still under team control, the average value of a WAR is about $2.5 million. So this contract realistically values Josh as a 3 WAR player. I think he will do better than that in 3 of the 4 years of the contract.

    But anyway, it couldn’t happen to a better guy. Congratulations, Josh, and I hope you continue to produce at the ML level for a long time. I hope you realize that there aren’t more than a few hundred people in the Pittsburgh area that will make more money in their lifetimes than you will in the next 4 years. And I hope you invest a big portion of it wisely.

    • KauaiCoffee
      April 8, 2015 4:21 pm

      The $ per WAR estimates I have seen have been between $6 million and $7.5 million per WAR. I have not seen anything lower than $6m/ in years.
      The Bucs will be paying Harrsion for roughly 1.5 WAR per season. He will provide that with his defense alone.

      • Arik Florimonte
        April 8, 2015 5:20 pm

        I agree with rburgh’s math, and I want to point out also that the Pirates can’t afford to pay $6M/WAR. Their average needs to be around $2M / WAR given their current salary budget. So this contract is probably about right… it doesn’t significantly increase the average they are paying per win, but it should provide stable value for its length. And it could be a huge bargain if JayHay continues to play like the next Bill Madlock 🙂

        They will still have to get a lot of value out of their cheap guys in order to stay competitive.

    • r: For a person just barely into WAR and it’s use in modern baseball, from where does the $2.5 mil figure come? Is it on a graduated scale such as with 4 years of control one number for WAR, such as $1.0 mil would be used, and then that number increases each year as the player nears Free Agency and the $7 mil number? It is an interesting concept, but one that I think could fluctuate wildly based on the specific conditions applying to a particular ballclub and the player/position involved.

  • This was obviously back-of-the envelope math, but we can get a little more accurate if we break it down a bit. His arbitration totals for 2016 & 2017 could vary depending on his performance, but would probably been around $10-14MM. It’s unlikely that he would be non-tenderred, but the Pirates do lose the flexibility to walk away if there’s an injury or serious decline over any of the next 3 seasons. That has a small amount of value.

    The real break even point would be about 1.75 WAR per season assuming a $/WAR of 6, best guesses at Arbitration earnings, and constant production.

    Ext. No-Ext

    Year Cost Value Surplus Cost Value Surplus
    2015 3.8 10.5 6.7 2.8 10.5 7.7
    2016 5 10.5 5.5 5 10.5 5.5
    2017 7.5 10.5 3 7.5 10.5 3
    2018 10 10.5 .5
    2019 10.5 10.5 0
    2020 .5 0 -.5
    Total 37.3 52.5 15.2 15.3 36 15.2

    So my best guess is that Josh would have to average 1.75 WAR to justify the contract (with all of these assumptions). Seems like a good bet to me.

    • Without working it out myself, I agree the 1.15 WAR number seems too low, Harrison wasn’t getting open market rates in 16 and 17.

      The Pirates hedged against any further power growth however unlikely, that would shoot the arbitration numbers up but the break-even point needs to be higher because they only bought one free agent year.

      • Also defense isn’t paid in arbitration so if we are getting technical Harrison needs to hit.

        • Absolutely. Club doesn’t stand to gain a thing until his free agent years, ages 31-33.

          Also don’t really risk that much, either. He was going to be on the club through arb one way or another given how much they like him.

  • Straight up WAR is one way of looking at it. Another way is Harrison needs to outproduce the year-by-year numbers that would have led to arbitration-year salaries of $5M and $7.5M. And then free agent year salaries of $10-11.5M.

    Using a 40-60-80 model, this could mean about 2.0 WAR for the Pirates to have “won” in the deal . Factor in the risk that the money is guaranteed, and one might conclude that 2.5 WAR is needed.

    All very subjective. But interesting nonetheless.

  • Like the deal. Batting leadoff every day means 620 ABs, and playing only third means an even better glove. That will help negate any big regression.
    The next 4 years will be great for Harrison and the Bucs!!

  • Darkstone42
    April 8, 2015 2:41 pm

    I think I read Dave Cameron valued a win this year closer to $7 million, and it inflates over time, so this deal looks even better based on that.

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