The Nationals’ Bryce Harper quandary

WASHINGTON — If you haven’t already heard, the Washington Nationals are
facing something of a dilemma in regards to one of their brightest young
players, one that will come to a head this month.

Thanks to a years-old dispute over Bryce Harper’s rookie contract, the
outfielder and the team that drafted him are at odds over a clause that could
affect millions of dollars of salary, both this year and in the future. The
issue has been simmering on the back burner ever since 2010, but it will be
resolved this month — one way or the other — and could alter the
organization’s other plans.

How we got here

When Harper was drafted, his agent — the notorious Scott Boras — dragged
negotiations down to literally the last 30 seconds before the signing
deadline. As Ken
Rosenthal reports
, that meant that some provisions of the
deal were agreed upon verbally, rather than in the written contract submitted
to MLB under the wire.

One of those provisions would allow Harper to opt out of his
current $1 million 2015 contract (with additional roster bonuses of up to
$500,000) and enter arbitration for the first time as a Super Two player. This
would mean he would have four seasons of arbitration, rather than a set salary
this year followed by three seasons of higher pay.

The two sides have yet to come to a resolution, and Boras and the Harper
family actually refused to sign the original written contract. As a result,
MLB and the MLBPA decided that if Harper qualified for arbitration before the
end of the deal (which he does), a grievance hearing would be held in December
2014 to determine whether he should be able to opt out.

Harper’s most similar comparable through age 21, according to Baseball Reference,
is Justin Upton. Upton signed an extension with the Arizona Diamondbacks that
bought out his arbitration years, but was paid $4.46 million in 2011, his
fourth league-season — the one Harper is moving into now. An arbitration
figure around $5 million sounds about right for Harper, based on Upton’s
contract and production.

Using that number as a guideline, the difference in Harper’s salary for 2015
would only be $4 million from what he is set to earn — not backbreaking for
the
Nats. But by entering arbitration a year early, Harper would then be able to
build upon what he had earned each year over the following three seasons. He
could earn an additional several million each of those seasons as well,
eventually costing the team upwards of $10 million, and potentially closer to
$20 million, depending on his performance. Needless to say, this is what the
Nationals are trying to avoid.

The options

The Nationals’ chief
internal legal counsel, Damon Jones, is well known for winning arbitration
cases. From a pure winning-vs.-losing standpoint, the team should feel pretty
confident in its representation. But these types of hearings can get personal
— after all, a team is essentially telling a player and his
agent to their faces why they don’t deserve more money. Why would the
Nationals want to alienate their young star, who is at the center of the
team’s ad campaigns and public marketing?

The Nats could offer Harper a long-term extension, but there are two major
issues there. First, the fact that the club’s near- and long-term payroll
situations are very much up in the air, due to
their impending future free agents and the MASN situation
(more on that
later). The second is Boras’ general unwillingness to allow his clients to
make such deals, knowing the potential for massive contracts on the
open free agent market. And with the recent eye-popping deal for Marlins’ star
Giancarlo Stanton upping the ante on such deals, the cost may well be outside
Washington’s bounds.

Instead, they could offer Harper a contract that takes him through his four
remaining years of control, essentially splitting the difference on the two
ends of what Harper is expected to make. It would be like buying an insurance
policy, appeasing the star and his agent now while worrying about his free
agent years later.

HarperHR

Bryce HR

Of the nine Hall of Fame eligible players to hit 50+ home runs before age 22, seven are enshrined in the HOF. (WTOP/Noah Frank — info per Baseball Reference)

Finally, they could trade Harper. It seems unlikely, though, that a team
would be willing to give up the massive haul that General Manager Mike Rizzo
and company would no doubt want in return. With a contract that ranks sixth
among all major league players in Jonah Keri’s MLB Trade Value rankings,
that would figure to be quite a return.

After all, whatever you think of Harper’s disposition or his failure to live
up to superhuman, Mike Trout-like standards thus far at the major league
level, his
production through age 21 puts him in rarified air in MLB history. There is
every reason to believe that, if healthy, he could put up enormous numbers as
he enters the beginning of his prime years.

Through the same age season as Harper’s in 2014,
Jayson Werth had just finished up a year split between High-A and Double-A
that saw him slash .240/.358/.362 with just seven home runs. Ian Desmond
played his entire age-21 season at High-A Potomac, hitting 13 home runs while
slashing .264/.357/.432. New fan favorite Anthony Rendon? He had a monster
age-21 season…as a junior at Rice University.

All of these players have become well-above average major league
starters, which just reminds you how high Harper’s ceiling may be. As you can
see, peak range for star hitters appears to be from age 23-27, with some
sustaining through their age-29 season, but almost universally entering a
marked decline by age 30.

It would serve the Nationals well to remember that, because even if they are
unable to hold onto Harper long-term, it would behoove them to keep him happy
and
hungry to help for the next four years, rather than counting down the clock to
free agency.

The payroll dilemma

Earlier this week, the Nationals decided to tender offers to all 10 of their
arbitration-eligible players. While some of those decisions were no-brainers,
there was speculation that the organization might cut ties with Danny Espinosa
and Ross Detwiler, due roughly $2 and $3 million respectively this year. By
not doing so, Washington is now on the hook for an additional $5 million in
salary this season, barring any trade of either player that might clear some
of that money.

FanGraphs

Harper FanGraphs

A plot from a 2011 FanGraphs article shows the peak years for great hitters are usually 23-27. (FanGraphs)

We know their payroll is essentially stretched to its limit for this season.
But an investment of just a few million dollars (which they could even defer
to the back end of a four-year deal) wouldn’t exactly break the bank. Besides,
Harper is being paid far less than his open market value.
As Lewie Pollis’ detailed study showed, a win on the open
market was worth roughly $7 million this season. Dave Cameron’s research put the value at roughly $6 million. For the purposes of this
exercise, we’ll split the difference and call it $6.5 million.

While he struggled with injuries last year, Harper posted just 1.0 Wins Above
Replacement (WAR), but has amassed 9.6 WAR over the past three seasons,
despite averaging just 119 games per year. Even if he simply continued to
produce at that rate (3.2 WAR per season) and only played that same number of
games each of the next four years, his open market value would be somewhere
around $20.8 million in 2015, rising with the market each season. That puts
his four-year open market value — again, with no tangible improvement — at
around $90 million.

This does not mean the Nationals should overpay for Harper. They have him
under team control for the next four years, so they don’t have to pay open
market value. But by recognizing how much he is worth, versus the relative
difference in what they want to pay him, working out an agreement that keeps
both sides satisfied (if not happy) seems like a wise investment.

Considering that Washington is likely to lose most (if not all) of the four
big-contract players who will hit free agency after this season — Desmond,
Doug Fister, Denard Span and Jordan Zimmermann — Harper becomes that much
more important to their ability to extend their competitive window.

If the Nats need any additional motivation to get this situation sorted out
quickly, NatsFest is a week from Saturday, with Harper slated to attend. If
they don’t want every question to be about his contract status, it would be
wise to have the query answered before then.

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