Edwin Encarnacion's Extension

The Jays signed EE to a 3-year, $27million deal, with a team option for a 4^th year priced at $10million. If they don’t take the team option, then they have to buy him out for $2million, so he’s guaranteed $29million. This seems like a pretty fair deal for both sides.

EE is making $3.5million this season, and the Jays are getting a LOT of bang for their buck. So far, he’s “earned” roughly $13million by virtue of 2.8fWAR, and we’re only at the all-star break. However, this is also by far the best season he’s ever had, he can’t play defense, and he’s 29 years old.

EE would’ve become an unrestricted free agent this off season, and assuming he doesn’t fall of a cliff in the second half, he probably would’ve been a fairly hot commodity. He’s always had a good bat, with flashes of potential for more, and in 2012 he’s putting it together. His 111 career wRC+ suggests a hitter who is about 11% better than the average MLB hitter, but a good deal of that value is destroyed by his porous defense, mostly at third base. His days at the hot corner are almost certainly behind him, but he’s becoming passable at first base, and seems comfortable hitting as a DH (many players’ stats suffer when they DH as opposed to playing a position in the field, for whatever reason). Additionally, he has reportedly made swing changes, which appear to be helping him with pitches on the outer-half of the plate.

It’s safe to assume that his position and defense combination will “cost” him and his team approximately 15 runs per 150-game season. Translate that to WAR, and it results in negative 1.5 wins. Any player who gets 600 plate appearances (PA) is automatically given 20 runs (league average run production, or generally the number of runs you’re expected to contribute above what a replacement-level player would contribute), or 2.0 WAR, and it’s up to him to destroy or build upon that.

In EE’s case, because of the defense and position woes, he’s starting with 0.5 wins (5 runs), assuming he gets to the 600 PA threshold. In order to be a league average player, he’ll have to produce 15 weighted runs above average (wRAA) per 600 plate appearances. For his career, EE has averaged 12.3 wRAA per 600 PA, per Fangraphs. However, the Jays are clearly banking on the fact that his production in 2012 is more indicative than his career norms (his 2010 season was also productive in limited plate appearances). If they’re wrong, and he reverts back to his career average production, then they probably overpaid him a little. If they’re right, and he keeps hitting at this clip, then he’s a bargain and picking up the 4^th year option will be a no-brainer.

Assuming $4.75million per win this season, and 2.5% inflation (both conservative estimates), EE merely needs to generate the aforementioned, league-average, 2.0 WAR to “earn” his contract. That means he needs to put up an average line something like this:

600 Plate Appearances

55 Walks

100 Strikeouts

150 Hits

25 Doubles

1 Triple

20 Home Runs

5 Stolen Bases

2 Caught Stealing

5 Hit By Pitch

5 Sacrifice Hits/Flies

.280 Batting Average (AVG)

.350 On Base Percentage (OBP)

.443 Slugging Percentage (SLG)

.310 Batting Average on Balls in Play (BABIP)

From the Jays’ perspective, in 2012 he’s already surpassed those numbers, and even with notable regression from his outstanding first half, he’ll still earn the contract. It isn’t so much money that they can’t eat it if it turns disastrous, and it’s not overly long-term, so it’s tradeable too. Plus, from 30-32, most players show signs of age, but few drop off a cliff.

From EE’s perspective it makes him a rich man, gives him a chance to earn $40million total, and still lets him have another crack at free agency when he’s 34 (maybe he can eek out another 1-3 year deal).