The Fascinating Jason Heyward Contract

On Friday, the Cubs won the bidding for Jason Heyward, convincing the outfielder to come to Chicago despite offers for more guaranteed money from the Nationals, the Cardinals, and reportedly one other team, perhaps the Angels. While Chicago’s offer of $184 million over eight years is certainly a substantial amount, he apparently could have taken $200 million guaranteed by going with one of the other offers. Instead he chose the Cubs, and along with putting him on baseball’s best team in 2016, the fascinating structure of the contract Chicago gave him may end up making this deal a big win for both sides.

The case for the contract being a big win for the Cubs is easy; Heyward is a very good player who will be paid like a decent one during his time in Chicago. To this point, Heyward has put up +28 WAR in six years in the majors; for the Cubs to break even on the total guaranteed money in this deal, Heyward would have to only put up about +20 WAR over the next eight years. This is essentially the kind of performance the Cubs are paying for with this deal.

Jason Heyward’s Contract Estimate — 8 yr / $181.9 M
Year Age WAR $/WAR Est. Value
2016 26 3.3 $8.0 M $26.4 M
2017 27 3.5 $8.4 M $29.8 M
2018 28 3.3 $8.8 M $29.1 M
2019 29 3.0 $9.3 M $28.2 M
2020 30 2.8 $9.7 M $27.2 M
2021 31 2.0 $10.2 M $20.9 M
2022 32 1.3 $10.7 M $13.9 M
2023 33 0.5 $11.3 M $6.2 M
Totals 19.9 $181.9 M
Assumptions
Value: $8M/WAR with 5.0% inflation
Aging Curve: +0.25 WAR/yr (18-27), -0.25 WAR/yr (28-30),-0.75 WAR/yr (31-37),-1 WAR/yr (> 37)

To get that number out of the contract estimating tool, I had to start Heyward at +3.3 WAR and choose the pessimistic aging curve, and that’s about as dim a view as one could possibly have of his overall value. Even if you eliminated 100% of his defensive value, projecting him as an average defensive right fielder going forward, he’d still project as a +3.5 WAR player, given his offensive production and quality baserunning. Forget regressing defensive value; for him to be worth only $184 million over the next eight years requires the type of analysis that concludes that defense is completely irrelevant beyond the position a player takes on the field.

Of course, that’s not a particularly rational belief, and every piece of available information suggests that Heyward adds a good amount of value in the field. Based on what they’re paying him, the Cubs are basically getting that value for free, and barring an injury, they’re very likely to come out with a significant bargain during the time Heyward is in Chicago. $23 million a year for a player of Heyward’s value is a very nice value, especially for a team in a competitive division, where the value of adding marginal wins is very high.

But, of course, this contract isn’t a straight eight year, $184 million commitment from both sides. That’s the amount the Cubs guaranteed Heyward as a floor, but because his representatives at Excel negotiated two opt-out clauses into the deal, the likely outcome is that he’s going to end up getting a much better deal than that over the long-term. It was long assumed that Heyward would get an opt-out clause in whatever contract he ended up signing — Excel has a history of getting them included for their clients, and Heyward is the kind of player where getting another crack at free agency has the most upside — with most speculation suggesting it would come halfway through the expected nine or ten year deal he would sign.

Instead, Heyward took a slightly shorter contract, and in doing so, moved up his chances to get back on the market. Since the Cubs gave him opt-outs after the 2018 and 2019 seasons, from his perspective, this is really a three year contract with a one year player option, followed by a four year player option after that. Assuming a normal payout structure with a slight increase in salaries over the life of the deal, this deal is probably going to end up paying Heyward something like $65 million over three years or $88 million over four years before he hits the free agent market again.

At that point, Heyward will probably not be as good of a player as he is now, as we shouldn’t expect him to retain all of his early-career defensive value, and he’s approaching the point where we shouldn’t expect the offense to improve dramatically. If he loses roughly half his defensive value over the next three years, he’d be looking at hitting the market again as a 29 year old who projected as about a +3.5 WAR player. The most recent comparison of a left-handed hitting corner outfielder with big platoon splits selling his decline phase was Shin-Soo Choo, and he got $130 million over seven years from the Rangers for his age 31-37 seasons. Heyward will be two years younger than Choo was when he landed his deal, and that point, there will have been five years of inflation in MLB since Choo’s deal was signed.

Choo’s deal is probably something like the floor for Heyward’s next contract — again, assuming he stays healthy, which is the primary variable in whether he’ll opt-out or not — and he’d probably only take that deal after the second option, as he’d probably prefer a one year, $23 million pillow contract by picking up his first option to try and have a better walk-year if his 2018 season wasn’t very good. So if we gave him the 7/$130M that Choo got and add that to the roughly $90 million that he’ll get from the Cubs in the first four years of the deal, that puts him right around 11/$220M.

But Choo’s deal is going to be ancient history by the time Heyward actually reaches free agency, and inflation is going to make it likely that he lands a much larger deal than Choo’s deal in a few years. When Choo signed his deal, teams were paying roughly $6 to $7 million per win; when Heyward is deciding whether to use his first opt-out or not, the market will probably be closer to $9 million per win. Here’s what a +3.5 WAR outfielder, selling his age-29 to age-35 seasons, would expect to get in that kind of market.

Jason Heyward’s Contract Estimate — 7 yr / $171.6 M
Year Age WAR $/WAR Est. Value
2019 29 3.5 $9.0 M $31.5 M
2020 30 3.5 $9.5 M $33.1 M
2021 31 3.0 $9.9 M $29.8 M
2022 32 2.5 $10.4 M $26.0 M
2023 33 2.0 $10.9 M $21.9 M
2024 34 1.5 $11.5 M $17.2 M
2025 35 1.0 $12.1 M $12.1 M
Totals 17.0 $171.6 M
Assumptions
Value: $9M/WAR with 5.0% inflation
Aging Curve: +0.25 WAR/yr (18-27), 0 WAR/yr (28-30),-0.5 WAR/yr (31-37),-0.75 WAR/yr (> 37)

If he collects roughly $70 million before the first opt-out, then sees a market where his fair value is around 7/$170M, it’d probably be a pretty easy call for him to hit the market and reset his salaries. At that point, the contract would end up paying Heyward something like $240 million over ten years, or right in line with the mega-contracts that Albert Pujols and Robinson Cano commanded. And this is assuming Heyward declines from a roughly +5 WAR player now to a +3.5 WAR player over the next three years. A total payday of 10/$240M for Heyward isn’t even the optimistic scenario, as he’d probably be able to get another deal worth $200 million deal if he still projected as a +4 WAR player going into his age-29 season.

These opt-outs are why Heyward took only $184 million. As Eno noted after the David Price signing, the opt-out was probably worth something like $10-$15 million for Price, an older pitcher with a significantly higher chance of collapse. For Heyward, each opt-out is probably worth more, and by doubling up on the chances to hit the free agent market again while he’s still in his prime, he’s put himself in a position to end up with something like $250 million over his remaining productive years.

So, yes, the Cubs got a really good value by signing Heyward for 8/$184M, but given that he’s now got a floor of $184 million with a more likely outcome of something like $240 or $250 million, this deal should work out just fine for Heyward as well. He might have left a little bit of guaranteed money on the table, but getting the 2018 opt-out probably should outweigh the value of getting a few million more per year during the part of the contract that is likely to get voided anyway.

While opt-outs are always going to be player friendly clauses, this contract is a perfect example of how including an opt-out in a deal can make a contract a win for both sides. The Cubs get a really good player at a bargain price for the first three or four years of the deal, and as long as Heyward stays healthy, he’ll get another nice contract in a few years. For both the Cubs and Heyward, this is a win-win contract; the losers in this deal are the rest of the teams in the NL Central, who are going to have to figure out how to contend with a juggernaut for the foreseeable future.

We hoped you liked reading The Fascinating Jason Heyward Contract by Dave Cameron!

Please support FanGraphs by becoming a member. We publish thousands of articles a year, host multiple podcasts, and have an ever growing database of baseball stats.

FanGraphs does not have a paywall. With your membership, we can continue to offer the content you've come to rely on and add to our unique baseball coverage.

Support FanGraphs




Dave is the Managing Editor of FanGraphs.

newest oldest most voted
20longyears
Guest
20longyears

…”the losers in this deal are the rest of the teams in the NL Central, who are going to have to figure out how to contend with a juggernaut for the foreseeable future.”

I wonder if part of the Pirates’ plan is to have more lefties in the rotation. Morton is out and Niese is in, and that money saved on Morton is going somewhere… perhaps Kazmir?

If you look at the splits, the Cubs and Cards both fare worse against lefties. If the Bucs do land Kazmir, their rotation to start the year would be four lefties and Cole. At the very least, I’m guessing that his struggles vs. lefties explain why they jettisoned Morton.

Terry
Guest
Terry

LOL at the pirates spending the money it will take to get Kazmir. They’ll probably sign Jerome Williams and call it an off-season.

20longyears
Guest
20longyears

Dave predicted 3/$42 million for Kazmir. Last year the Pirates signed Liriano for 3/$39.

Terry
Guest
Terry

Which was the pirate’s biggest contract ever handed out in free agency. And Liriano > Kazmir so I don’t see it as being likely at all that they’ll pony up 3 years and 42 mil for Kazmir.

Shane
Member
Member
Shane

Some Pirates magic would be great for Jerome Williams

Buns
Guest
Buns

Cubs should be fine vs. Lefties as their young righty core gets some more looks. All Cubs RHH rookies were better vs. RHP last year. They have been considering slider RHP their biggest weakness.

Or maybe those guys will have reverse splits.

rjbiii
Guest
rjbiii

I’m not sure if I buy into this Cubs juggernaut narrative that is taking hold. Is the gap between them and the cardinals and pirates really that large? Pirates, for example, seem to have some easy routes to upgrade (SP and 1B in particular) and some very good options in the minors to fill them about ready. Cardinals may already have outfield upgrades in place despite pessimistic protections. Cubs have caught up to them, certainty, but are they really that far beyond that they are the new NL Central juggernaut? Not convinced.

stan
Guest
stan

The Cubs have no pitching depth and only one starting pitcher on the right side of 30. They were extremely lucky with injuries last year and that luck can’t hold forever. That said, their line-up is going to be tremendous and they still have prospects to deal for pitching if they need them.

David
Guest
David

No pitching depth?

Arrieta, Lester, Lackey, Hendricks, Hammel is a very solid 5, and Warren is a very good 6th/swingman. Very few teams are that good 1-6.

And, hell, as a 7th guy in line, Travis Wood is no slouch either.

Keith
Guest
Keith

Travis Wood is every bit of a slouch, and Hammel can’t get past 100 innings without blowing a tire. Lackey’s got numbers to suggest he can’t be trusted–age, K rate, BB rate, FIP, probably more, if you want to look a tad harder.

davhern
Member
davhern

Travis Wood is a slouch if he’s in your rotation, maybe. As the 7th guy on the depth chart, he’s far from it.

Hammel’s second half issues may or may not be real (last year he was pitching through a hamstring injury in the second half that didn’t help at all), but either way, his overall production is more than adequate as a 5th starter. I’m not sure where people get the impression that teams are lining up above average starters or something 1-5, but, particularly with the additions of Lackey and Warren, the Cubs are in very good shape 1-6.

Steamer Projections
Guest
Steamer Projections

The Cubs project as a ~99 win true talent team.

Yes, the gap is enormous. 51.6 2016 projected WAR vs. 40.3 for St. Louis and 39.5 for Pittsburgh. They are 2 standard deviations of WAR ahead in that division, barring injuries.

Shauna
Guest
Shauna

Sounds like the stuff they said about the 2015 Nationals

davhern
Member
davhern

The Nationals weren’t even projecting as high as the Dodgers last year, IIRC. They may have been, but neither team was projecting higher than the low-mid 90’s, from what I recall. Projections and talking head predictions aren’t the same thing.

davhern
Member
davhern

That said, St. Louis still should be expected to make some moves. I’m not sure what the Pirates are going to do to fill out the back of their rotation, but reports are they aren’t willing to spend even $10M in AAV there, so we’ll see how they fill that out. They do seem to have some pitching pixie dust.

Nats =/= Cubs
Guest
Nats =/= Cubs

The Nationals roster projected well because of their (on-paper) elite pitching and position players with injury histories.

The starters got hurt (Strasburg) or turned awful (Fister) and the position players got hurt (Rendon).

The Cubs don’t have a ton of guys with long injury histories and their team is extremely young. Injury risk is real for everyone, but this refrain “OH LOOK AT THE 2015 NATIONALS” isn’t an accurate comparison. And even if it was, a 2 standard deviation outcome happening once doesn’t mean that it is more likely to happen again.

Keith
Guest
Keith

Granted, you basically explained the Cardinals’ offense as well. Perlata, Carpenter, Holliday, Molina, that offensive core is old. Oh, and don’t forget that the STL rotation will be led by a 34-year-old who has blown out his elbow and Achilles. It’s then followed by 3 guys under 30 who didn’t make it through the season healthy.

Against the Pirates, I’d say it’s a ceiling matter. The PIT rotation might be a couple of years younger, on average, but it’s a lot of “blech” stuff. Niese and Locke? I’d take the higher-age Lackey and Hammel, and I hate Hammel. Their offense is a good OF and an infield of questions–Kang’s health, Harrison’s consistent ability, Mercer’s ability, Morse’s negative-WAR production.

Consider that FG has the Cubs 11 wins over the Cardinals and 12 wins over the Pirates. Whether you agree with projections entirely (I don’t blindly accept them, and can probably find several holes in those ones), those are massive win total differences. The WAR gap from the Cubs (1st) to the Cardinals (6th) is the same as from the Cardinals (6th) to roughly where the Orioles project (24th). The Pirates’ (9th) projection WAR gap would settle between the Padres (26th) and Brewers (27th).

Maybe you find the gap to be much smaller, but if you accept a premise that those numbers are reasonable, as yourself if there’s a big gap between the Cardinals and the Orioles. How about the Pirates and the Brewers?

rjbiii
Guest
rjbiii

Certainly the Cubs are going to be a very strong team in 2016 and beyond. But a “juggernaut” in NL Central (i.e. the team set up to consistently blow everyone away)? Steamer predicts a 10 WAR gap. But that is easily narrowed if you think about error bars. It could be just 10% over on the Cubs and 10% under on the Cardinals or Pirates or both and you have parity today. Long-term the Pirates and the Cubs both seem to be in good shape with a young quality core either in the majors or about to be there. The Cardinals I definitely take your point. But it’s the Cardinals… Just can’t see years in the wilderness subsumed by a Cubs “juggernaut” for them.

Seems like every year a new juggernaut is proclaimed (Dodgers in NL West, Nationals in NL East, for instance). And it doesn’t really shake out that way. Strong teams with a good chance of winning. But nothing like a team that ends up owning a division for years. Lots of parity in MLB these days…

esdrtfyu
Guest
esdrtfyu

There is absolutely no change whatsoever in how the Phillies are run.

Bill Giles put the ownership group together with people who think like him 35 years ago. Guess what? Bill Giles is still there. He took part in the hiring of MacPhail and Klentak both. He was at the press conference announcing the hiring of Klentak.

35 Years.

Jim Thome and Cliff Lee

That’s it.

35 Years.

Carlos Ruiz and Maikel Franco, the only two starting quality players signed out of Latin America. Ruiz was signed out of Panama for eight thousand dollars. Need that in numerical form? $8,000- Eight Stacks.

Maikel Franco was signed for $100,000- That’s one hundred thousand American dollars. One hundred Stacks.

The Red Sox paid $63 million to sign Yoan Moncada. The Phillies paid $108,000- to sign both Carlos Ruiz and Maikel Franco.

Two real free agents and two starting position players from Latin America signed for nothing.

The Phillies Way is unchanged. They will sit in the cellar until they collect enough free talent in the MLB Plantation Slave Auction held every June. These young slave/intern players will be exploited to the max by the Phillies bloodsucking ownership cabal. For seven years they will make these bloodsucking criminals massive profits. If a few become fan favorites and the crowds are still huge as they near free agency then they will be signed to short, team friendly deals. If any have slipped through their screening process and turn out to be normal players seeking long contracts they will be demonized and booted out the door.

The Phillies after telling lies to their fan base from 2012 onward finally admitted they were “rebuilding”. The truth of the matter is they are already planning their next rebuild as they conduct this one.

THAT is The Phillies Way.

Google: Kevin Maitan FREE_AEC
………