One Year of Mike Trout: The Results

Yesterday, I posed a thought experiment that had recently been posed to me: if Mike Trout were to become a free agent but declare that he would only sign a one year contract, how much would you offer him for the 2014 season alone? 2,800 people submitted answers — well, a little north of 2,800 now, but I had to dump the data into Excel at some point — and the results are pretty interesting. Let’s get right to them.

Trout2014

As you can see, the most common answer was $40 million, but the distribution around that number skews to the left a bit, so the actual average of all the entries was $38.8 million and the median was $39 million. There are also notable spikes at every interval of $5 million, which just goes to show we have all been conditioned to think in terms of zeros and fives, and while not materially relevant to the study, I find that kind of fascinating. And, while the data isn’t normally distributed, the standard deviation was $7.6 million, for those who are into standard deviations on non-normal distributions of data.

I think the easiest way to look at the data is this: 70% of the respondents chose a number between $25M and $40M, with only 30% choosing a number between $40M and $60M. Essentially, the promise of having the game’s very best player with no long term risk was only worth about a $14 million premium over the established annual salary that is paid to most star free agents on long term deals right now. Not only did the crowd not price in a higher rate of dollars per win for a superstar, they actually deflated it.

This is actually pretty consistent with how MLB teams have operated as well, and shows that perhaps there is something of a mental price ceiling that drives us back towards established norms in per year salary even if the object we are bidding on is vastly more valuable than the ones that established the market in the first place. With all due respect to the 154 people who entered $25 million in the poll, I don’t actually see a particularly credible argument for values that low.

If we project Trout’s overall value for 2014 to about +8 WAR — well below what he’s done the past two years, but we have to account for the risk of injury — then a $25 million payout would be paying approximately $3 million per win. If you can make a rational argument in the comments section about why you think the best player in the game should go for about 60% of last year’s market rate when he would also come with no long term risk, I’d love to see it. I honestly can’t think of one, beyond the idea that all baseball players are overpaid and you’d rather give the money to schoolteachers and firemen. The idea that you could do better by paying $18 million per year to Jacoby Ellsbury — on a long term deal that comes with lots of risk in the future — and then make up the gap with $7 million left over doesn’t really pass the smell test.

Even if you decided to just cut the money in half and go for two $12 million per year players, last year that would have bought you Torii Hunter and Adam LaRoche, or Shane Victorino and Michael Bourn, or Nick Swisher and Angel Pagan. Would anyone really trade Trout for one of those pairs? I just don’t see a realistic argument that you could spend $25 or even $30 million in 2014 salary and come away with an expectation of +8 WAR unless you seriously backloaded multiple contracts and borrowed heavily from your future in order to subsidize the 2014 payroll.

Really, I think anything shy of $35 million or so is probably too conservative for an +8 WAR player, but 27% of the respondents said they would top out at between $25-$34 million. I can understand an argument that the market price for free agents is inflated because of the risks of signing aging players with uncertain health, but I don’t know that I see a great case for why a 22-year-old superstar on a one year deal is less valuable than what the market has been paying mid-rotation starters and solid role players on multi-year contracts.

For me, the bidding would have to start at $40 million, and I’d probably be comfortable going up a bit from there. The injury risk is a real concern, but adding Trout to an 81-81 team would make his wins about as valuable as they could possibly be, given the team’s spot on the win curve and the potential revenues that come from a postseason berth. The marginal value of wins from 87-93 are enormous, and adding Trout would create an opportunity to push the team right into the sweet spot where each incremental addition would bring back the largest possible bang for the buck.

Additionally, I don’t think we can undersell the value of the one year commitment. While a team would probably prefer to have a player like Trout under contract for more than one season, the flexibility to walk away in case of an injury or unforeseen decline is essentially baseball’s version of insurance. We’re all willing to trade a little bit of money now to insure against huge losses in the future — see car insurance, homeowner’s insurance, health care premiums, etc… — and a one year contract would simply allow a team to eliminate the chance of sustaining huge future losses, and should come with a premium that prices in that risk avoidance.

Even if you only value long term risk avoidance at a few million, there has to be some transference of cash to Trout to account for the risk he’s carrying and the team is not. So, I’d argue that if there was to be a non-linear aspect of $/WAR pricing at some point, it would come on one year deals, which should require a larger price to performance ratio to offset the lack of risk being carried by the big league team beyond the single season.

That’s why I think I’d end up around $48 million before I bowed out and let him go elsewhere. Yeah, at $6 million per WAR, I wouldn’t be getting much of a bargain relative to the market rate, but turning those market dollars into the best player in baseball on a one year deal would be worth a premium over what I could get by spreading those dollars around on multi-year contracts. I believe in the value of depth, and I don’t really buy into stars-and-scrubs as an effective model for most teams, but given the parameters laid out — already a solid team in place, $60 million in payroll space, no future risk — a Trout-and-sidekicks roster would look pretty darn good.

Assuming I also spent the remaining $12 million effectively, I’d head into the 2014 season with a roughly 90-92 win team, but wouldn’t have sacrificed any of the farm system or future financial flexibility in order to make a playoff run. If you could spend that $60 million more effectively, I’d love to hear how. This will be a fun thread to look back at next spring, after all the free agents have signed and we know what players generally cost, so feel free to lay out your plans on how you’d spend the $60 million. I’d be especially interested to see how those who think Trout isn’t worth more than $35 million for one year would reallocate those funds and come up with a better roster than what they could get by giving him a big slice of the available pie.

To everyone, though, thanks for participating in this thought experiment with me. It was a fun exercise, and I enjoyed going through the results. And the next time that someone tells me that we’re crazy for continuing to model $/WAR on a linear scale, I’ll simply point them to this post. Even a perfectly linear $/WAR model is too aggressive for most of our readers, and the risk of total loss seems to be a much larger driving factor in determining salary than the potential of maximizing total production.



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Dave is the Managing Editor of FanGraphs.


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robert
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robert
2 years 11 months ago

It would be interesting to do this for Miguel Cabrera next week to compare the results.

Bryz
Guest
2 years 11 months ago

My only issue with doing this exercise again is that there will be a lot of bias present now. For example, I picked $30 M (didn’t really think hard about it, just picked a number that sounded reasonable to me), but if I was to do the same for Cabrera, I’m now more conscious of avoiding a number that ends in a 0 or 5 because Dave pointed that out.

snarknado
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snarknado
2 years 11 months ago

$30,000,001 for Cabrera, says this Tigers fan

Aggie E
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Aggie E
2 years 11 months ago

MikeTrout.com

Spunky
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Spunky
2 years 11 months ago

Stole my idea.

jruby
Member
Member
jruby
2 years 11 months ago

Honestly, why not just crowdsource this for the whole league? It would actually be pretty cool to add, on the “fan projection page” or the like, an option to rate the value of a one year contract for each particular player. I think it would be really interesting to see what kind of trends emerge.

Scott
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Scott
2 years 11 months ago

It’s been said too much in the past century, but this J Ruby gentleman seems like a pretty rational guy!

evo34
Member
evo34
2 years 11 months ago

Cameron is forgetting that there is some built-in insurance for long-term deals. It’s called the Yankees. Teams don’t sign guys to 10-year deals thinking they are going to pay out the whole contract. They know they’ll unload the guy after 6-7 years to some team that makes a living off of overpaying, like the Yankees and more recently the Dodgers. So any time you try to compare a long-term deal to a 1-year deal, it’s not really fair, as teams agree to long-term deals knowing there are sponge teams out there to absorb excess salary down the road.

BJsWorld
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BJsWorld
2 years 10 months ago

Pretty sure there are some really bad deals out there with players that cannot be moved for salary relief. See Vernon Wells (of a few years ago), Josh Hamilton, and Albert Pujols.

Tom
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Tom
2 years 10 months ago

But Vernon Wells did get moved, so he’s a direct counterpoint to your argument, BJ.

Rob
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Rob
2 years 10 months ago

Except that the Angels ate a ton of his contract so they basically continued to pay a large portion of the money owed to him just to get him off the roster.

Andre Dawson
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Andre Dawson
2 years 11 months ago

I say just give the kid a blank check and let him write his own salary.

me
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me
2 years 11 months ago

“a Trout-and-sidekicks roster would look pretty darn good.”

Arte Moreno never said.

Jeremy T
Guest
2 years 11 months ago

I put in $37m but in a real life situation I’d probably go higher, especially after reading through your logic. That fact right there is pretty good evidence why I am not and never will be an actual GM.

CORNFLAKE5000
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CORNFLAKE5000
2 years 11 months ago

The point of this was to imagine it was a real life situation. Why wouldn’t you put in what you’d pay? Your logic baffles me.

Drew
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Drew
2 years 11 months ago

I picked $27,000,000, just because I thought Mike would appreciate the gesture. Would be willing to go as high as $44 million though.

jorgesca
Member
jorgesca
2 years 11 months ago

I will probably pay him more(in average) for a 3-4 year deal than I would for a 1 year deal. There are many things that could potentially come up in one year than in a longer one could be compensated. I actually voted 29, but after reading this I think I could go a little higher, but I don’t think I could go higher than 33, being that 23 is the highest salary any non NY team is paying anyone.

Professor Ross Eforp
Member
Professor Ross Eforp
2 years 11 months ago

Somebody posted this about Evan Longoria in the other thread, so here is my verbatim response…

Why use Evan Longoria instead of Grady Sizemore? What kind of contract could have have goten in 2008 after a four year run of 26.9 WAR? He was 26 years old and arguably the best player in baseball.

Would you rather have signed him to that 1 year $40MM deal or a 5 year $150MM deal? Kind of a crazy question, too, because Sizemore on the free agent market would have been looking at something like 8 years $200MM minimum.

jorgesca
Member
jorgesca
2 years 11 months ago

I’d never be in favor of a 5+ year deal. Sizemore was just terrible luck for him, there are a lot of intangibles that a longer (3-4 years) helps you minimize with of course the added risk.

Bob M
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Bob M
2 years 11 months ago

As I wrote in your other comment, Sizemore was not “arguably the best player in baseball”. MVP Albert Pujols was 28, and coming off 6 seasons in which 7.8 WAR was the worst. Coincidentally, that was also Sizemore’s best.

There was also no way he was getting $25 million per season for 8 years.

Professor Ross Eforp
Member
Professor Ross Eforp
2 years 11 months ago

Did you go ahead and search for Sizmore? Or read my follow up posts? It isn’t my fault that you apparently weren’t watching baseball at the time, but the least you could do is use the website you’re on.

Pujols, and ARod, were likely still better players (which is why I used the word arguably), but Teixera getting $180MM over 8 years is pretty solid evidence that Sizemore would have been likely to get to $200MM. He was younger, and a good bit better, than Teixera.

munchtime
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munchtime
2 years 11 months ago

It isn’t my fault if you keep posting the same nonsense in multiple spots. Condescending comments or not, Sizemore wasn’t “arguably” better than Pujols. It isn’t particularly close either. If you would “use the website you’re on”.

And assuming that Sizemore would get more than a 10% bump over a different player “because I said so” is a big jump. One was a 20/20 outfielder for a mid-market team; the other was a 30/100 1B for the Yankees. Both the power numbers and their employers matter. A lot.

Professor Ross Eforp
Member
Professor Ross Eforp
2 years 11 months ago

Free agents don’t have employers. The original point was that a poster would pay more in AAV for multiple years because a younger player might miss one year or a big chunk of one year and you get no value. He used Longoria as an example, and I asked why not Sizemore?

He may not have been “the best”, but he was top five and that puts him in the conversation. He was the youngest player in that conversation as well and just entering his prime. He was better than Teixera, and younger to boot. Regardless of whether he would have gotten $200mm, or $150mm, it all would have been pissed away.

Amazing how I am the one using, “just because I said so,” yet neither of you have presented a shred of evidence.

DavidKB
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DavidKB
2 years 11 months ago

You bring up an interesting point. Paying a player for 1 year obviates most of the risk of long term, career ending injury. But you expose yourself to the risk of a 3-6 month injury that might have been averaged out over 3-5 years of mostly healthy play. This thought points to a possible “minimum risk” contract length that one could figure out based on typical injury rates and output vs. age. Perhaps you could come back with “shorter as better” as the rule of thumb, but perhaps not..

Tim
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Tim
2 years 11 months ago

This risk is actually minimized by the shortest possible contract. It can be emotionally annoying when it wipes out the whole contract, but mathematically you only make it worse by extending the length.

Professor Ross Eforp
Member
Professor Ross Eforp
2 years 11 months ago

A player that misses half the season (especially the latter half) loses a lot of leverage. If you signed Trout for $40mm for one year and he blows out his knee, then you are certainly going to be able to get him for that price (or less!) the nexy year. Paying more in AAV for more seasons is silly.

Bitter Beane
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Bitter Beane
2 years 11 months ago

I failed to appreciate the question’s setup, i.e., pretend to be one of the teams with $120 M budgeted, half of which is available. Who am I Jack Zduriencik?

Westside guy
Member
Member
Westside guy
2 years 11 months ago

Trout would probably ride the pine in deference to Raul, anyway

NATS Fan
Guest
NATS Fan
2 years 11 months ago

he would play over Michael Sanders for sure! Not to take anything away from Sanders.

Jacob
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Jacob
2 years 11 months ago

Why don’t teams make contracts in such a way that players get paid by the WAR. Let’s say for every win the player gets $5 million dollars. If Trout is worth 10 wins give him $50 million, if he’s worth 8 then give him $40. Who would say no to this kind of contract, Trout or the Angels?

jorgesca
Member
jorgesca
2 years 11 months ago

WAR is far far away from perfect

hildebeast21
Member
hildebeast21
2 years 11 months ago

How far? What makes you say that? What’s your more accurate measure?

Rex Manning Day
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Rex Manning Day
2 years 11 months ago

The absence of a more accurate measure doesn’t justify using an inherently imperfect statistic to determine how many millions of dollars someone is going to get paid.

As for WAR specifically, which WAR are we talking about? There are a couple versions of it, after all. Which fielding metrics do we trust more? Given that teams presumably have their own fielding (and other) metrics, would they prefer to use those to publicly available stats? To what degree do the player and his agent(s) trust the team’s proprietary metrics? And if the metrics remain proprietary, what is the mechanism for ensuring that the player is properly compensated? Who double-checks the team’s math?

Also, the various WAR formulas are intended to weigh each input (batting, fielding, baserunning) strictly according to how much it helps a team win. For example, fielding generally accounts for around 14-15% of WAR. Do these win-based valuations accurately represent the team’s financial valuation? Does fielding really account for 15% of a team’s valuation of a player? Or do teams value fielding less because things like slugging lead more directly to revenue? And, if WAR’s valuation doesn’t match the team’s monetary valuation, do we need a new WAR formula specifically for contract valuation? Is that formula going to be proprietary? Does each team need its own version?

If the WAR formula is proprietary to the original team, can the player be traded? Does he have a no-trade clause that allows him to veto any team whose WAR formula he doesn’t like?

jorgesca
Member
jorgesca
2 years 11 months ago

Yep, What Rex Manning Day said

Professor Ross Eforp
Member
Professor Ross Eforp
2 years 11 months ago

Because no person that has the leverage to get a guaranteed contract would ever sign one that requires them to perform well and not be injured.

jorgesca
Member
jorgesca
2 years 11 months ago

In my opinion, it is too subjective to what the author of the stat values himself. Besides that, defensive metrics hold it back for accuracy in a 1 year period.

Detroit Michael
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Detroit Michael
2 years 11 months ago

Because the collective bargaining agreement doesn’t permit this. There are restrictions on performance-related bonuses (e.g. “Games Finished” bonuses are allowed by “Saves” aren’t).

octelium
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octelium
2 years 11 months ago

Is win probability added allowed?

Jason B
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Jason B
2 years 11 months ago

It’s only restricted by (a) the prohibition on performance-related bonuses, and (b) common sense.

NATS Fan
Guest
NATS Fan
2 years 11 months ago

The Union and the Agents!

David
Guest
David
2 years 11 months ago

Each team has their own proprietary “WAR” that they use, the biggest difference between these and the publicly available “WARs” is that the proprietary defensive measurements are much more accurate (or at least their respective teams think so).

Seth
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Seth
2 years 11 months ago

In addition to what everybody else said, WAR is somewhat exponential. The difference between 5 WAR and 6 WAR is a lot bigger than the difference between 2 WAR and 3 WAR.

Retirenutting
Guest
2 years 11 months ago

Can’t we think through this quote a little, though?

“The injury risk is a real concern, but adding Trout to an 81-81 team would make his wins about as valuable as they could possibly be, given the team’s spot on the win curve and the potential revenues that come from a postseason berth.”

Trout is on the Angels. Here’s what Fangraphs writers predicted for the Angels: http://www.fangraphs.com/blogs/2013-fangraphs-staff-predictions/ — an AL Wildcard berth. They aren’t going to get one and Mike Trout plays for them. Couldn’t this reality be why teams wouldn’t want to bid $40+M for him?

Really?
Guest
Really?
2 years 11 months ago
Nick
Member
2 years 11 months ago

Their position players are actually 7th in MLB in WAR (19.3)

Of course, if you replace Trout (8.6) with an average player (~2 wins), they go down to 23rd.

Their pitchers, however, are 26th in the league with 6.6 WAR. Whoops.

Retirenutting
Guest
2 years 11 months ago

I don’t think you could have missed my point any more than you did. I know Trout’s not the problem. It’s just that there’s no sure thing.

BJsWorld
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BJsWorld
2 years 10 months ago

Dave isn’t suggesting that there is a sure thing. He’s simply stating that if a team has an expected 81/81 record, then adding Trout will most likely result pushing that team from an average team to playoff team. No guarantees of course. You are playing with probability.

yf223
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yf223
2 years 11 months ago

Because all of us were surely predicting that Pujols and Hamilton were going to combine for <2 WAR this year.

Lord BatCat
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Lord BatCat
2 years 11 months ago

Trout isn’t the problem (as is noted in the first reply to this) and nobody is saying otherwise. YET, the logic was immediately sound to me, as I was thinking the same thing reading the article, that I can’t refute any price tag for a guy with this unique of a skillset (within the current MLB market), but is his +8 WAR actually going to push your team into the playoffs??? I’d like to see a simulation of him playing for the Mariners, who have better *starting* pitching than the Angels, and see what happens. They still wouldn’t make the playoffs is my bet.

spencer d
Guest
spencer d
2 years 11 months ago

They might, but not simply because they would be better, but because the Angels would be that much worse.

NATS Fan
Guest
NATS Fan
2 years 11 months ago

Not sure I agree with Seattle having much better starting pitching. Felix is way better than any pitcher in LAA. but, SP3-5 the Angels have the edge right now.

Robert J. Baumann
Member
Member
2 years 11 months ago

Yes, but the Mariners weren’t an ~81-81 team to begin with (not according to any projections or expert opinions anyway), so you’re not abiding the original scenario that Dave Cameron laid out for this exercise. If you add Mike Trout to the Astros, they still wouldn’t even make it to .500, so there’s no reason for the Astros to bid on him.

Jeremy S
Guest
Jeremy S
2 years 11 months ago

Perhaps not all $/war is treated the same. I wonder if there’s diminishing marginal utility in terms of $/war when a player contributes a lot of wins. You touched on it a bit when you said it may be non-linear.

So maybe Trout is worth the market rate for $/war at a certain point. Team’s varying philosophies certainly plays a role.

David
Guest
David
2 years 11 months ago

It should be the opposite, when one player contributes a lot of wins over replacement, there is a gained opportunity. There are only a few players in the league who can contribute on the level of Trout, and getting that production from one lineup spot is extremely valuable. Consider a team entirely consisting of 3 WAR players, they would be a fairly good team, but their ability to improve would be severely limited due to the difficulty of upgrading any of their lineup spots. On the other hand, a team with the same team WAR but that earns it through only 3 of their roster spots has significant room for improvement. In order to have a truly elite team, as opposed to a good team, superstars have to exist.

Hank
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Hank
2 years 11 months ago

I think the question is…

How do you know you have an 81 win team to begin with? The variance on that is large so the inherent assumption that you are taking a .500 team to a playoff team is not a good one for two reasons:

1) There is probably a huge amount of uncertainty in the expected talent level pre-Trout.
2) On a .500 team, Trout is probably not teplacing a 0 WAR player. If he’s supplanting an averish player than instead of an 8 win upgrade it’s a 6 win upgrade.

Hank
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Hank
2 years 11 months ago

Oops – not sure why this went here

The Duke
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The Duke
2 years 11 months ago

What about $30 million guaranteed then $3 million bonus per WAR over a base of 5? So a 10 WAR season earns $45 million?

Yuniesky Betancourt
Guest
Yuniesky Betancourt
2 years 11 months ago

Sounds great. It’s a deal!

hildebeast21
Member
hildebeast21
2 years 11 months ago

There are 2 teams in baseball that wouldn’t replace their current CF with Trout–Pirates and Brewers. Trout is likely a defensive upgrade over every other CF out there who can hit a lick. Since this is a 1-year deal, the issues of him wearing down long-term don’t apply, but maybe he gets to DH every 8th game to rest his legs for the anticipated playoff run. That would mean roughly 0 positional value. Assume that another year of gained muscle and lost fast-twitchiness and some bad reads/paths in his (potentially) new stadium reduce his defensive abilities in CF to league average. Meaning, 0 fielding value added. Also assume 600 plate appearances, despite his being young and very healthy. Then depress (because regressing still wouldn’t drop his rates this low) his stats across the board so that he is something like a .300/.375/.500 hitter with ~30 stolen bases in ~37 attempts (3 stolen base runs added) and 7 other base running runs added. So that’s about 35 hitting runs, 3 stolen base runs, 7 base running runs, 0 positional runs, and 0 fielding runs, which gives 45 runs above replacement. Factor in the standard 20 replacement runs, and you have a 65 total run player, or 6.5 WAR. Then be ridiculously conservative with your WAR dollars and assume $5million per, and you have a $32.5 million value as his floor.
Now assume that the 22-year old continues to develop physically and mentally while avoiding injuries. You’re looking at a .340/.440/.570 guy and 65 batting runs, 5 stolen base runs, 10 base running runs, 2.5 positional runs, 7.5 fielding runs, and 20 replacement runs. There you have 11 WAR. Now assume WAR value is $6million per, and you have a $66million guy. Make it easy and split the difference, you have a $49.25million value.
Since nearly everyone prefers round numbers, that’s $50million.
I think the Toronto Blue Jays would gladly pay $50million to Mike Trout for one season.
I responded with $47, because I like prime numbers.

Kink
Member
Kink
2 years 11 months ago

I bet the Pirates would still pay big for him. Marte, McCutchen, and Trout would give you an outfield of 3 center field caliber defenders who can all hit and run the bases.

jorgesca
Member
jorgesca
2 years 11 months ago

Would they pay them all as the value they would be bringing in if they were playing CF? J/K but I think it’s a valid point to ask since there are a lot of players playing out of position which could make them earn more or less WAR if they were playing in their actual one.

Kink
Member
Kink
2 years 11 months ago

I think you’re right, but outfield is the area where specific position matters least. Center is the most important, it’s where the most balls get hit, and the most difficult, but the corners are similar enough that the transition isn’t that tough. And Trout has already shown that when he plays with one of the few guys in baseball who plays better defense than he does, Bourjos, he can shift to the corner and not lose much value.

B N
Guest
B N
2 years 11 months ago

It’s even worse than that. Only so many balls fall into the outfield. If you have 3 CF-quality outfielders, they’ll start cannibalizing the out of zone plays that UZR and most other formulas love. Or, in other words, adding a great CF has the most impact when all your outfielders have bad skills. You don’t get any “bonus points” for having two outfielders both able to reach the same fliner. Only one of them can catch it, after all.

Chris
Guest
Chris
2 years 11 months ago

Although you get less fielding value per fly ball out of them due to the redundancy, you could also purchase more fly ball pitchers as you know you will give up a very low BABIP on fly balls, netting out some of this… its unclear exactly what effect stacking like this will have…

AJB
Guest
AJB
2 years 11 months ago

I was right at the $35 million barrier, but my larger concern was adding any value there without knowing how the constructed team got to an 81 win mark. I know that runs are runs are runs, but without knowing what commodity I could buy and the relative price of that commodity as reflected in the prior free agent market.

For instance, if the market values the following in position players in descending order: power, on-base, avg, defense and my largest deficiency was a particular defensive position and I knew I could improve by 2 WAR by bringing in a good defender, I might be willing to spend more on Trout as I know that defense is relatively undervalued in the current marketplace. Whereas if I had a good defender who hit like Jeff Francoeur in RF, I might be concerned about finding an upgrade at a reasonable price making my bid for Trout smaller.

Spending any more than 35 million without that knowledge seemed to be ignoring the valuation that the market has placed on specific skills.

Baltar
Guest
Baltar
2 years 11 months ago

Yes, context beyond expected record and $ available is necessary to determine the amount Trout would be worth to a given team. One factor is that the player who would be replaced completely and the one who would become the 4th outfielder are rarely replacement players. For some teams, they would be pretty good and very good. Also, there must be a discount for risk, even for a one-year contract.
Considering these factors, $40 million would not be a reasonable number for most teams to pay, let alone $48 million.
Still, this was an interesting thought process.

spencer d
Guest
spencer d
2 years 11 months ago

So essentially you have to value trout less the value of the other outfielder, let’s say Rasmus (because I’m cards jays). So projecting Colby for maybe 2.5 wins at 10 (arbitrary because I’m going n my phone) vs trout at 8 and 45, trout is being valued at around 45/5.5 $\win or about 8.5, which is substantially above the market rate. Assuming Colby was under contract, could not play any other position, and that the revenue difference caused by trout was negligible then the blue jays should not sign trout. Point out any flaws, please.

Walter
Guest
Walter
2 years 11 months ago

Um, you used a backslash in math.
And Toronto’s third outfielder is Rajai Davis. I doubt Toronto would bench Colby Rasmus if they suddenly found themselves with Mike Trout.

spencer d
Guest
spencer d
2 years 11 months ago

That’s beside the point. Also, typing on a cellphone.

James
Guest
James
2 years 11 months ago

The argument for $25 million is you don’t think Mike Trout turns your team into a playoff team. (Angels)

Richard
Guest
Richard
2 years 11 months ago

Yeah, I’m sure its Trout that’s holding the Angels back…

Bryan
Guest
Bryan
2 years 11 months ago

Isn’t that the point? Baseball is a team sport. You might be better off with 3 great players, rather than one amazing player.

Travis L
Guest
Travis L
2 years 11 months ago

What are you expecting to pay for each of the 3 great players? To me, a great player is in the $20 million range… Are you saying 3x 20 million instead of 60 mil for trout?

Kink
Member
Kink
2 years 11 months ago

It seems to me that wouldn’t there be an issue with the fact that, on a .500 team, Trout would not be replacing a 0 win player. Most teams that good don’t have a total black hole in their outfield, so he’d be replacing a player who was worth something, say maybe 2 wins, which would cut into his value. Maybe I’m wrong, but isn’t how your roster currently stands a consideration? I.e. maybe a .500 team with a strong rotation and weak lineup is willing to pay more than one who already has a respectable cast of outfielders.

Mister
Guest
Mister
2 years 11 months ago

I think the counter argument to this would be that you could trade your 2-WAR outfielder and get some other value back in return. Most 81-81 teams have holes SOMEWHERE, and may be able to fill some of those holes by trading away a solid 2-WAR outfielder.

spencer d
Guest
spencer d
2 years 11 months ago

Cards. Wait…Kozma.

jorgesca
Member
jorgesca
2 years 11 months ago

Realistically, paying him anything more than $35m would create an inflation in salaries all over again.

Alvaro Pizza
Guest
2 years 11 months ago

I voted 40 million. But as D. Cameron said, I consider it a starting point. With 60 million available in cash for free agents, I’d try to convince Trout for a playoff ride and top up to 50 million, so I have 10 million left to cover potential or actual holes in the roster.

That’s another important point. Going the playoffs could give the team an aditional 20 million for every round, so those 60 million available in the offseason could be 80 to 100 million at the end of the season.

Can teams negotiate huge performance bonuses? How about a 15 million bonus if the team makes the postseason? The postseason revenue could pay the bonus.

If it can’t be done that way legally, I’d give the bonus under the table.

B N
Guest
B N
2 years 11 months ago

You can’t pay for performance. You can sometimes pay for awards, but I am not sure if that is even still legal. You do give bonuses for the post-season, but those are in the form of shares of a larger pie. I doubt Mike Trout would be very enthusiastic with a deal where he gets $5m for reaching the postseason, while all of his team-mates get $10k each. A-Rod might have taken that deal, however. With that said, I don’t think you can write the number of shares someone gets for post-season series into a contract. Which is probably best, as it would be not only unpopular, but an accounting nightmare (“We want to trade for Pujols, but we don’t have enough postseason shares to satisfy his contract. We’ll need to trade hypothetical postseason shares with some other team…” etc etc).

nd910
Guest
nd910
2 years 11 months ago

Bonuses on awards are legal

B N
Guest
B N
2 years 11 months ago

I was pretty sure that they were, but I wasn’t sure if that had been altered by the last collective bargaining agreement. So thanks for confirming it. Even so, the union and/or league would likely complain if any contract had a large amount of its salary loaded into an award.

tz
Guest
tz
2 years 11 months ago

I’d love to know how the answers might change if you could buy “injury insurance” on Trout.

For example, if you could buy a policy that would pay for any fraction of the season that Trout is on the DL above 20%, and the policy costs 10% of his salary, how much would you pay?

Chris
Guest
Chris
2 years 11 months ago

The issue I have with this analysis is that there’s a big difference between “what you’d be willing to spend” and “what Trout would get”. If all 30 teams were distributed like shown above, Trout would get $60 million because the one team willing to spend that much would win the bidding. It doesn’t matter in an open market what the median bid is, what matters is what the highest bid is. While I said I’d use $45 out of my hypothetical $60 million, I also thought that $45 million probably wouldn’t be enough compared to other teams. That high number is what should be used as the per-win value of his services.

snydeq
Guest
snydeq
2 years 11 months ago

Agreed. Segmenting the data differently in groups of ~100 to attempt to represent the 30 MLB teams might prove an interesting representation of how the auction for Mike Trout’s one-year services would play out.

70 percent (21 teams) would fall in the $25M-$40M range, and thus probably not even bother to pick up the phone. 15-20 percent (5 teams) would kick the tires feeling they might be somewhat reasonable, or have an intangible to offer in addition to salary, at $40M-$45M. 2 teams (~7 percent) would weigh in around $50M, and then the bidding war would be with the final 7 percent (2 teams) willing to go above that, with about 4 percent (equivalent of 1 team) willing to go all in on $60M if necessary.

So the final contract is probably $55M.

Of course, the analysis remains interesting, as the thought experiment emphasizes equivalence in organizational makeup, suggesting that it is more about GM philosophy (or “personality type”) than team resources.

But it’s pretty hard in a poll like this to achieve true equivalence in parameters, as our individual GM philosophies (or “personality types”) are colored by the real disparity in the economics of the sport.

David
Guest
David
2 years 11 months ago

Actually, in a system with a perfect flow of information, as the free agent signing process in baseball essentially is, the number that matters is the second highest bid. Because the highest bid isn’t actually a number, its “higher than the second highest bid”.

Terrence P. Knightly
Guest
2 years 11 months ago

Shoutout to the 20 or so other people who picked $48m like me. Always feels good to have your ideas validated by Dave. Honestly, even though there was no conclusion in the first article, it did seem to me like DC’s analysis pointed towards spending just under $50m.

Ryan
Guest
Ryan
2 years 11 months ago

The point of this exercise was to determine what the crowd would pay Mike Trout, not what the crowd thought Dave Cameron would pay Mike Trout.

B N
Guest
B N
2 years 11 months ago

If we really wanted to find out what the crowd would pay Trout, treating the crowd as GM’s, wouldn’t we then use Monte Carlo to generate many sets of 30 samples and take the maximum of those samples? Because that is what Trout would get paid. The maximum of 30 samples from some distribution of what GM’s think he is worth.

spencer d
Guest
spencer d
2 years 11 months ago

No. Just above the second highest amount.

B N
Guest
B N
2 years 11 months ago

@spencer: I appreciate your use of game theory, but that assumes that each bidder knows the offers of the others with certainty. Boras has shown that through the use of the “mystery team” it is possible to get closer to the top bid than to just above the second-best bid.

Paul
Guest
Paul
2 years 11 months ago

I think $48 million is too conservative, though I agree with most of your post.

Assuming $6M/Win and 8 wins, that’s $48M.

Then, you’re asserting that the transfer of risk from the Angels to Trout (lower # of years) is equal to the team’s preference not to have all the WAR tied to one player?

Tim
Guest
Tim
2 years 11 months ago

I’m going to put my $60m in an index fund, and I’m pretty sure I’ll be better off than anyone who spends it on baseball players.

Hal and Hank S.
Guest
Hal and Hank S.
2 years 11 months ago

Oh really?

Tim
Guest
Tim
2 years 11 months ago

Yes, you guys spend your money so well.

TBH
Guest
TBH
2 years 11 months ago

Forbes puts out Mlb corporate valuations every so often. Feel free to graphs them for any team against SPY.

Tim
Guest
Tim
2 years 11 months ago

Fortunately we have Jefffrey Loria so we know that a baseball team’s valuation has basically zero to do with how much money it spends on players.

Mister
Guest
Mister
2 years 11 months ago

Yeah, but baseball is much, much more fun.

spencer d
Guest
spencer d
2 years 11 months ago

Depends on your index fund.

ToMcN
Guest
ToMcN
2 years 11 months ago

48 was my number coincidentally. i figured you’d want to have a little leftover for bargain FA’s

Hurtlocker
Guest
Hurtlocker
2 years 11 months ago

Doesn’t matter what you pay him, the Angels will still suck. Actually he would likely not even play for the Angels who still have to pay Pujols and Hamilton.

mettle
Guest
mettle
2 years 11 months ago

Regression to the mean.

Mike Trout does not have 10WAR skill.
Mike Trout very likely does not have 8WAR skill.
Mike Trout probably has a coinflip change of having 6WAR skill.
And he almost certainly has at least 4WAR skills.

So, $30m (6W x $5m) seems like a fair price to me.

Devin
Guest
Devin
2 years 11 months ago

He’s well on his way to his second 10 WAR season in a row, while I agree that’s probably not sustainable, what stats are you looking at to suggest he’s worth less than half that?

Baltar
Guest
Baltar
2 years 11 months ago

He said, “Regression to the mean.”

Scraps
Guest
Scraps
2 years 11 months ago

Chanting “regression to the mean”.

Matt
Guest
Matt
2 years 11 months ago

Why should anyone expect Trout to regress towards the mean? Why would you lump him in with the Juan Pierre’s of the world? He is a Barry Bonds/Griffey Jr. type of talent. Considering he just turned 22, we could almost expect an uptick in performance going forward.

Baltar
Guest
Baltar
2 years 11 months ago

It’s a good thing you didn’t take any statistics or social science classes in college, as you would have flunked.

Joel
Guest
Joel
2 years 11 months ago

When you decide that Trout will regress towards the mean, what are you basing this off of? Has his performance had a particularly lucky component, such as BABIP?

It seems inaccurate to say that any extremely good or bad performance by a player will regress towards the mean, considering each player has their own mean of their performance level, completely separate from any other player.

On the other hand, there is a long and well-documented history of players generally improving the first few years as they age past 22. So it wouldn’t be entirely unexpected if Trout actually got better in the years to come.

Dave
Guest
Dave
2 years 11 months ago

If he’s posted 8 WAR two years in a row it’s safe to say he has 8 WAR skill.

Baltar
Guest
Baltar
2 years 11 months ago

No, it isn’t.

Darren24
Guest
Darren24
2 years 10 months ago

It’s safe to say you’re a f***ing idiot.

jruby
Member
Member
jruby
2 years 11 months ago

“Has a coinflip chan(c)e of having 6WAR skill.”
???
Calling troll.

JC
Guest
JC
2 years 11 months ago

Regression to what mean?
Why doesn’t he have 10 WAR skill?
Do WAR curves peak at 22 usually?

Baltar
Guest
Baltar
2 years 11 months ago

Regression to the mean of major league baseball players. The rarity of 8+ WAR seasons.

Dave
Guest
Dave
2 years 11 months ago

This was mostly my thinking (I picked $36 million). I agree it’s possible Trout’s god-given talent is as an 8 WAR player (and given his two seasons, it is defensible) and $50 million is then justified, but after 3 decades of seeing other amazing players boom/bust, other star youngsters flame out, and so few players consistently produce 8-WAR seasons, I couldn’t see myself going higher than a 6-WAR median projection. So 6*6 was $36.

I do think the distribution is unusual; median is 6 but a better chance of 8 than 4, but also a better chance of 0 (injury) than 10 (three in a row? I’ll believe it when I see it . . . and I hope to dog we get to see that in 2014).

I would be outbid, but I tend to be risk-averse when it comes to large expenditures. I’ll let someone else take trout and get 3 good players or two great players for my $36 million.

kdm628496
Member
kdm628496
2 years 11 months ago

i don’t think baltar knows what “regression to the mean” actually means. it’s not regression to the mean MLB player. it’s regression to each player’s true talent level.

you wouldn’t expect a high school player who gets thrown into the majors to regress (up) to the mean MLB player, so you shouldn’t expect the best player in baseball to regress (down) to the mean MLB player either.

to me, there’s about a 75% probability that trout is a 7-9 win player right now, and since normal aging curves show that batter get better until around age 27, i’d say there’s a very good chance he’ll keep putting up >7 WAR seasons.

Miles
Guest
Miles
2 years 11 months ago

Why not regress him to the mean of professional baseball players in the US? Or regress him to other 21-22 year old professional and college baseball players?

Regressing him that strongly to the mean of MLB players seems arbitrary as well.

jrogers
Member
jrogers
2 years 11 months ago

I think Baltar’s being a little aggressive with his regression, but a quick case for R to the M is this:

There are many more 6-WAR true talent players than 14-WAR ones (to pick a couple numbers). Therefore, it’s much more likely that Trout is a 6-WAR guy who has had 2 lucky seasons than that he is a 14-WAR guy who has had 2 unlucky seasons.

(Yes, no one is saying he’s a 14-WAR guy, but adjust the numbers accordingly).

Now, what’s his true talent approximately, 4, 6, or 8? There are many more 4-WAR players, but the likelihood of a 4-WAR player having two 10-WAR seasons is much less than that of an 8-WAR player. You can come up with some assumptions to quantify that if you like.

Joel
Guest
Joel
2 years 11 months ago

I agree with you more or less, but I don’t think that’s regression to the mean. Regression to the mean is an anomaly averaging out. You’re not positing that Trout’s performance is an anomaly compared to his true talent level – you’re just using historical factors to try to guess what his true talent level is more likely to be.

Matt
Guest
Matt
2 years 11 months ago

If you look at his ZiPS ros projection that is probably a better approximation of his true talent than your eyeball regression estimate.

Going by that he’s an 8 WAR true talent player.

TBH
Guest
TBH
2 years 11 months ago

I’d rather go by the 2014 ZIPS projection than y the 2013 though.

Matt
Guest
Matt
2 years 11 months ago

Ok. But we won’t have that until the offseason.

What we do have now is the 2013 rest of season projection which is basically the same thing, just for this moment in time.

B N
Guest
B N
2 years 11 months ago

I don’t see how you could argue that he doesn’t have 6 WAR skill. What are the odds of two 10 WAR seasons from a player with sub-6 WAR skill? Has that ever even happened? He probably has a skill level of between 7.5-8 WAR. Or, in other words, the WAR of an elite player in his prime.

A-Rod, coming off his first big 9 WAR season, put up 7.5 WAR/year over the next 5. Trout, keeping up even half this pace, will have put up two seasons that are slightly higher in WAR, consecutively. Over that period of 5 years for A-Rod, only two were below 7.5 WAR and the other three were above (note: the next two after were also 8+ WAR each).

I think it is fair to say that the “true talent” of the best players in the world in their prime is somewhere between 7.5 and 8.5 WAR. That is what makes 10 WAR seasons possible (and even likely), as well as 5 WAR seasons possible (and even likely). So it’s fair to assume that Trout has a true-talent in that range. However, I do take issue with the piece saying that somehow peging Trout at 8 WAR “adjusts for injury” or is somehow risk-averse. No player in the modern era, including Barry Bonds (possibly the best hitter of all time), displayed a true talent level higher than 9, from my guess. The younger Barry Bonds best three consecutive years average out to 9.3 WAR per season and were lower on either side. He was then significantly worse than that for the better part of a decade before juicing mightily and once again breaking the 10 WAR barrier (which, when your hat size is bulging, is hard to call a “true talent” level).

Basically, I don’t think you can estimate that anyone has a true talent level of over 9 WAR. Might it be true? Can you speculate it? Sure. Should you use it to make financial decisions? Heck no. But 8 WAR? That should be a lock. Almost nobody who put up two 10 WAR seasons has not had a consistent level of play around that level, plus or minus 0.5 WAR, for around 5 years.

B N
Guest
B N
2 years 11 months ago

Or, in other words, go find me the guy on this list with two 10 WAR seasons and a 6 WAR true talent level in that 5 year surrounding span: http://www.baseball-reference.com/leaders/WAR_bat_season.shtml

Robert J. Baumann
Member
Member
2 years 11 months ago

Wow. Ruth averaged 10.4 WAR (and 11.4 WAR/650 PA) in ages 24-33 seasons.

B N
Guest
B N
2 years 11 months ago

Yah, that guy was all right. I guess that’s why they named a candy bar after him. ;)

anhonestmess
Member
anhonestmess
2 years 11 months ago

You can’t just say regression to the mean because 10 WAR seasons are rare and assume that Trout will therefore be worse in the future. Players don’t all regress to the average MLB player over time, some are better than others. Regression to the mean implies that there’s some sort variance from observed norms in this case either in Mike Trout’s established baselines or with luck/high variance stats, MLB norms.

I don’t know at how many PAs each stat stabilizes, but there’s nothing in his stat lines that deviate heavily from how he performed in the minors and with each PA, we can feel more comfortable that Trout is a .330/.400/.560 player…in centerfield…with above average defense…and excellent baserunning.

Which stats do you think are “lucky” in his line? Where exactly is he going to regress and why? His BABIP is in line with his career norms (including minor leagues), his batted ball profile is in line with career norms. His BB% and K% are in line with his career norms. His speed score and defense are in line with career norms.

The only place where you could say Trout has been lucky is with health. Most MLB players don’t survive a 162 game season unscathed. One thing though…he still had 10 WAR while missing 23 games in the minor leagues last year, so we already know what Trout missing an average amount of time looks like, an 8+ win player.

I used the simple WAR calculator and gave Trout 20 HR, 70 BBs, 100 Ks, .350 BABIP in 600 PAs over 140 games with only above average defense and baserunning (as opposed to elite), and he still produced 6.1 WAR with serious regression across the board in basically every tool, ignoring any potential gain that could be made from getting stronger/being in the league longer. There’s nothing in his profile that suggests he’s anything less than a 6 WAR player, and he’s likely an 8 WAR true talent player who just maybe might get better with age.

This isn’t a case of regression to the mean. This is a case of the gambler’s fallacy, a rare conclusion has popped up twice so you think a third time must be increasingly less rare. No, it’s exactly as rare as it was before, and more than that each successive PA of great Mike Trout provides more evidence that it wasn’t as rare (for him) as we might have initially though.

TKDC
Guest
TKDC
2 years 11 months ago

I picked $43 million, which makes me happy because I was fairly close to what Dave said, what the crowd said, and I didn’t fall into the 0s and 5s trap. I should probably reexamine what makes me happy.

leeroy
Guest
leeroy
2 years 11 months ago

same.

B N
Guest
B N
2 years 11 months ago

Is it a trap? I’d say that being much more precise is generally adding artificial precision. My old chemistry teacher, who was grumpy most of the time, used to say that you should only present the number of significant digits that you could trust from your measurement. Otherwise, you’re just implying that you know more than you do. Given the high variance of estimates from people, I think increments of 5 is pretty reasonable.

TKDC
Guest
TKDC
2 years 11 months ago

That is a good point, but I do think 5 million is too wide. I’d agree with 2.5 million increments. I was honestly thinking between 40 and 45 million and picked 43 instead of 42 just because.

B N
Guest
B N
2 years 11 months ago

Yah, I suppose I could go with that. $5m is a bit wide, in retrospect.

Lenard
Guest
Lenard
2 years 11 months ago

I believe I picked $42 million yesterday, but would go up if I needed to.

What about a one year deal with a vesting option for $1 million if X amount of days or more are spent on the DL? Sort of like the clause in Felix or Lackey’s contracts. It would protect against injury except for something really severe. Obiously in a deal like this, you would have to go up into the 50’s to sign him, I would imagine.

Mick O
Guest
Mick O
2 years 11 months ago

Does any of the going rate for WAR get tied up in what the player adds to the brand equity of the franchise? How many jerseys will you sell knowing he’s only there for one year? It’s a fascinating exercise.

Glen
Guest
Glen
2 years 11 months ago

I actually think the contract value was deflated by the premise of the 120MM payroll – the problem with that assumption is that current long term contracts are not based on only the 120MM teams. Teams like Bost, LAD and NYY drive up the price so containing the argument to this payroll figure probably drove down what would have done otherwise.

Eric
Guest
Eric
2 years 11 months ago

There are two ways to go about this. One is how much would you pay for a year of Mike Trout. The other is how much do you think you would have to BID to get a year of Mike Trout.

I chose the former, and selected $32 million. Mainly because in the event he gets hurt, you can theoretically make up for it by pulling a coup in the mold of the 2013 Red Sox, by paying the remaining $28 million for an additional 7 wins (since the Sox basically paid $4 million per win in their spree). So in the case that either Trout gets injured, or the free agent signings are bust, you wind up with an 88-89 win team that’s potentially good for a wild card

Newcomer
Guest
Newcomer
2 years 11 months ago

I was thinking $48M, but I’d go higher if he would accept deferred salary. If this is THE YEAR, I’d give him $20M or so up front and then defer up to $40M or so over the next 10 years. I think those would be acceptable terms, since it offers top money, enough to be set for a long time up front, and a team with the budget to continue adding impact talent.

I’d also be losing a compensation pick, right?

Bob M
Guest
Bob M
2 years 11 months ago

I wouldn’t go past $35 million. With the payroll constraints given, I would want that $25 million to get a top-tier SP, and potentially a few spare parts.

placidity
Guest
placidity
2 years 11 months ago

There’s no free agent pitcher who’s going to cost you close to $25 million. Kuroda, De La Rosa, Colon, and Burnett are the top 4 FA in fWAR this year. Throw Garza in there too if you want. You can go higher on Trout than $35M.

munchtime
Guest
munchtime
2 years 11 months ago

Perhaps not. But Trout isn’t available. In the league where I claim him from the Angles, I do the same with a pitcher. Call it Kershaw, if you want.

Bubba
Guest
Bubba
2 years 11 months ago

“If we project Trout’s overall value for 2014 to about +8 WAR — well below what he’s done the past two years”

That quote is both amazingly ridiculous, and factually correct. Mike Trout can’t be a real person.

CubChymyst
Member
CubChymyst
2 years 11 months ago

I picked around 35 million because I was assuming a team has a budget to keep. I don’t feel like $/WAR is a linear trend. Maybe adding Trout brings in enough added revenue to go up to 40 million but it feels like putting all your eggs in one basket type scenario especially if it is an off season where you have 2 or 3 positions you’d like to upgrade. It also depends on what the other free agents are that year. In 2011 for 50 million could have gotten you a few good players.

vivalajeter
Guest
vivalajeter
2 years 11 months ago

It seems to me that there are still two questions left unanswered.

1 – If Trout was a free agent this off-season, what would he be willing to take on a one-year deal, in order to sacrifice the long-term security of a $200-300MM+ contract?

2 – If you guys would pay $40MM for a year of Trout, what would you pay for a year of Yvonne Strahovski? $100MM?

jruby
Member
Member
jruby
2 years 11 months ago

I think question 1 is foreclosed by the assumptions of the thought experiment: Trout’s already declared his absolute 100% commitment to a one-year deal. Obviously, it’s just one of many assumptions (like him being a free agent next year and whatnot)

As for question 2, what do you estimate her wRC+ will be? Has her BABIP been sustainably high based on her prior skill set? I can’t seem to find her on the FG leaderboards…

TBH
Guest
TBH
2 years 11 months ago

Trout’s BABIP and xBABIP have historically been very close and both in the 370’s.

rjlanphere
Member
rjlanphere
2 years 11 months ago

Dave, love the logic and your number came really close to mine ($52). I used similar logic (fWAR dollar values). I think one piece that you missed which accounts for the difference is the premium I was willing to pay to subject myself to the winner’s curse. I think for a player like Mike Trout, it is OK to overpay.

Mike Troll
Guest
Mike Troll
2 years 11 months ago

69th comment!

mitch
Guest
mitch
2 years 11 months ago

It would have been interesting to see the chart segmented by team fandom. I bet the median salary from fans of big market teams would have been higher.

Mark Geoffriau
Guest
Mark Geoffriau
2 years 11 months ago

I picked $38m yesterday. Not sure if I’d bump it up from that. Possibly.

There’s another angle to consider this little thought experiment — how much cash would it take to convince the Angels to part with Trout?

EG, right before the season starts, you offer the Angels “cash considerations” in exchange for Mike Trout — how much money does it take for the Angels to seriously consider the offer? We can assume that $10 won’t get it done, and we can assume that $10B would probably be enough, but what’s the minimum amount between those two that still gets the deal done?

spencer d
Guest
spencer d
2 years 11 months ago

A lot more than signing him, since the team expects to make revenues off of him exceeding any potential deal, and for our purposes he’s being paid 0$.

sstrand
Member
sstrand
2 years 11 months ago

I voted $40M. I projected Trout at 8 WAR. At $5M per win, you get $40M. However, I initially viewed this as conservative. I would most likely pay another $5M, because I see much less risk investing the extra money in Trout than a series of incremental moves.

TheUncool
Guest
TheUncool
2 years 11 months ago

That plus the alternative incremental moves would almost all need to upgrade existing spots on an 81-win team. That probably won’t be easy to do. Much easier to jump for Trout and have minimal need to juggle the existing roster further while shopping (and bargain-hunting) for whatever final minor pieces (w/ good upsides) w/ the remaining resources…

TheUncool
Guest
TheUncool
2 years 11 months ago

Not saying this would likely happen, but consider what the Pirates did nabbing Liriano essentially for peanuts.

Haven’t done any actual research on it, but I doubt too many championships have been won in the last few decades w/out some surprise/sleeper production and a little “luck” to go w/ what looks solid on paper to start the season…

Mike
Guest
Mike
2 years 11 months ago

I think it’s a great piece overall and a fascinating thought experiment, but I have to quibble with one component. You assert: “Even if you only value long term risk avoidance at a few million, there has to be some transference of cash to Trout to account for the risk he’s carrying and the team is not.”

I don’t know how much you’re factoring this effect into your valuation, but I don’t think it should be included at all. In the thought experiment as you specified it, Trout is (all but) insisting on a one-year deal; in doing so, he forgoes whatever risk premium you would pay him to accept a one-year deal. Certainly, that the deal is only one year adds a huge amount of value for you from a risk perspective, but Trout has sacrificed any leverage to require you to share some piece of that value with him.

Iron
Guest
Iron
2 years 11 months ago

He retains that leverage because not taking that risk still has value, and there are 29 other teams who are factoring in that value in their bids. In a one-on-one negotiation you may have a point but not in an auction scenario.

beisbol
Guest
beisbol
2 years 11 months ago

I went with $49 million and after reading more from this article and other comments I would stick with my initial assessment. The one thing I am unable to quantify and accommodate for is the marketability a team can use when they have a superstar locked up. Their marketing campaigns and fans are more willing to invest when they know that face will be a familiar sight over the next few/many years compared to a 1 and done scenario.

Iron
Guest
Iron
2 years 11 months ago

I voted $48M because that was what I thought it would take to get him. And if I were a GM I would do what it took to get him. I’d also bankrupt my team and be fired in a huge scandal involving hookers and coke, but that’s neither here nor there.

grady
Guest
2 years 11 months ago

I must overvalue the one-year, no long-term risk factor. I’d have put $52.5MM were it an option, mostly because I figure a guy like this, who could probably demand a single contract that lasted him through age 40, wouldn’t ever sign anything below or even at anything resembling market value. 9 WAR*$5.5MM= $49.5MM, but as Dave pointed out, there’s almost a non-linear thing going on with each subsequent win on a 1-year deal.

badenjr
Guest
badenjr
2 years 11 months ago

Not that anyone should care, but I voted for $40 million. My reasoning was something like this… Say Trout buys you 7 wins. That leaves you at 88. Then you still probably need 4 wins to get into the playoffs. Four wins are going to cost you about $20 million. That means you can spend about $40 million on Trout.

In short, my decision about a one-year rental comes down to whether I think I can field a team to make the playoffs. If I don’t think Trout alone can get me there, I need to consider what other pieces I need. I think Trout is WORTH more than $40 Million on a one-year deal, but I think spending more than that on Trout limits my ability to put a contending team on the field, which in turn limits my need for Trout. Ultimately, the scenario that was presented had a lot more to do with my answer than my valuation of Mike Trout did.

TheUncool
Guest
TheUncool
2 years 11 months ago

Do you really believe Trout would only buy you 7 wins? IF so, yeah, I guess so — maybe $40M is even too much in that case.

IF the thinking is that he’d only be a 7-win upgrade over some 2-win OF you already have. Well, maybe you should try dealing that 2-win OF elsewhere instead — if it’s all just down to the $ and you think you need it to fill some other hole/upgrade, do it as a virtual salary dump, which should likely be easy if you’ve only spent the other $60M on an 81-win team.

TheUncool
Guest
TheUncool
2 years 11 months ago

Pretty much how I looked at it, so no arguments here.

EDogg1438
Guest
2 years 11 months ago

I chose $42 million.

I used the standard $5M/WAR number and put Trout at an 8 WAR projection for next year.

Then I threw in a couple million premium because of the shortness of the deal and I was trying to avoid the 0 and 5 numbers.

Adam W
Guest
Adam W
2 years 11 months ago

In regards to the penultimate paragraph – I didn’t participate in the poll, because I thought the parameters of the discussion were too vague. It’s impossible to account for the cascading effect of adding Trout without understanding the exact makeup of the roster. Should I forecast for any age-related improvement or decline? What does my farm system look like? Is my outfield a bunch of all-glove Gerardo Parras that would lose any semblance of value from moving to 1B or DH, or do I have a bunch of Adam Dunn-types that might actually gain value from a positional switch?
Even if I had ROBO-TEAM, where everyone is worth 2 WAR and is exactly average in every capacity (including age), there’s also the question of opportunity cost and who else is available on the FA market. It’s possible that my 8 projected WAR from Trout at $50mm could still be an inefficient allocation of funds if I could get three different 4-WAR players for that money (like, say, 3 copies of Michael Bourne). The aggregate upgrade would be the same (6 net WAR from adding Trout vs. 6 net WAR from adding the other three guys), but I would be assuming less risk by diversifying my assets.

spencer d
Guest
spencer d
2 years 11 months ago

Michael Bourne would also expect more for a one year deal. Also robot team would always be wasting money because their bench (or whichever 2 win player was benched in exchange for the trade assets garnered by getting rid of the outfielders ) would be need to be paid as if they were two win players. In all truth, if they acquired their value in different ways, it might work out better because a 2 win offence first player becomes a great pinch hitting bat off the bench.

TheUncool
Guest
TheUncool
2 years 11 months ago

But then, he wouldn’t be a 2-WAR player anymore, if he’s only pinch-hitting. Plus wouldn’t you still need him to play the field after he pinch-hit most times (unless you really plan on bringing in another defense-first player after each such PA)?

And if he’s a poor defender, would you really give him more than ~1 PA late in each game (outside of extra innings)? You’d then turn him into a roughly 1/2-WAR player (assuming a conservative estimate of 4 PA/game, if he started instead). Yeah, he could add something back by starting on occasion and when someone’s hurt, but still… seems like it’d make more sense to just deal him for some other piece that would fit the roster better.

spencer d
Guest
spencer d
2 years 11 months ago

It depends on the relative strength of the bench and how many games each 2w player actually played (ie troy tulowitzki types or Cal ripken types). Also, if you have all of your best hitters in a lineup you might want to play your two win bat over, say, your trade acquired 3w first baseman because of non linear scoring. Maybe because your team is perpetually hurt, the 2w bench player gets 120 games.

Adam W
Guest
Adam W
2 years 11 months ago

I assumed based on the terms that Dave laid out that we already had a 25-man roster locked up at $60mm, and the other $60mm was purely for FA upgrades. So in that case, what you’re paying the bench guys is a sunk cost.

But in regards to your point about Bourne, that was also not clarified in the discussion – are we signing these hypothetical other FAs to 1-yr deals as well? I assumed not, but I’m not sure if that was the point or not. Regardless, there is a case to be made for having 3 years of Michael Bourne for $45 million instead of 1 year of Mike Trout for $45 million, since again you are able to avoid risk by diversifying your assets.

Ruki Motomiya
Member
Ruki Motomiya
2 years 11 months ago

Forgot to vote last time, was going for $42 Mil but very willing to go up to around $50.

Seems like I was right, though perhaps #42 was initially a bit low.

Kumar
Guest
Kumar
2 years 11 months ago

I thought we weren’t supposed to confuse player WAR with team wins.

RobM
Guest
RobM
2 years 11 months ago

Another interesting question is what would you pay for five years of Mike Trout beginning at his age-22 season in 2014? I could see a team paying $200 million because of his youth, production and his already very high level of achievment that very well might get better over the next five years.

Prince_Miggy_Mart
Member
Prince_Miggy_Mart
2 years 11 months ago

I think the Angels should add Trout for 1 year 60 million. mmhmm yep

Bill but not Ted
Member
2 years 11 months ago

Almost more fascinating than the 0/5 distribution is that most of the commenters claimed an answer not on 0/5 intervals. I don’t buy it… Statistically, most are probably mis-remembering their original answer, or just lying

Utah Dave
Guest
Utah Dave
2 years 11 months ago

I did not participate in the original thought experiment (sounds Orwellian). But I thought about it this morning prior to reading the column. I picked $26MM. Then I read your logic and felt like I had accidentally disrespected Mike Trout – so my apologies there to Mike. Maybe a few more Subway commercials could have helped insure his financial future. Or maybe Josh Hamilton can hook him up with Head and Shoulders since nobody gives endorsement deals to guys with a WAR of 0.8. I don’t know what I find more interesting though – the 0/5 thing or the logic behind $/WAR.

tz
Guest
tz
2 years 11 months ago

Is there any way to quantify the amount “truly available” to owners to spend on player salaries?

What I mean by this is the sum of the long-run average amounts that each owner would be able to spend on player salaries without decreasing the (inflation-adjusted) value of their franchise. The only way a salary tax threshold would come into play would be the cash amount of the actual tax.

J. Cross
Guest
J. Cross
2 years 11 months ago

So, in the offseason, after we crowd forecast salaries for players, can we have a game where we all have $60M to spend and see who can rack up the most WAR from this year’s free agents?

spencer d
Guest
spencer d
2 years 11 months ago

A new way of playing fantasy?

Thor
Member
Thor
2 years 11 months ago

I wonder how many gm’s in the league would accept a deal: their two top prospects for Trout, and Pujols or Hamilton’s contract. I.e. for the mets synderrgard and montero for trout and Hamilton’s 100 million left

Matty Brown
Member
Member
Matty Brown
2 years 11 months ago

Would like to see this for Felix

BillyF
Guest
BillyF
2 years 11 months ago

Dave Cameron, I enjoy and love your consistent works creating and updating this site, but I found this argument awkward: “I’d argue that if there was to be a non-linear aspect of $/WAR pricing at some point, it would come on one year deals, which should require a larger price to performance ratio to offset the lack of risk being carried by the big league team beyond the single season.”

Whenever we deal the money-value of a player for a ball club, we must consider the market. Including, and not limited to: Marquee value, big or small market mentality, owner financial status, the REALITY factors. It’s never theoretical alone. Though in reality, Trout will never be signed a mere one year, but it’s important to conduct further research within this fun exercise.

We are lucky to have something in common from the other side of the Pacific, for our comparison of this Trout situation. In NPB (Japan), one-year deal is more as the norm than the anomaly, even for star players. And we’ve seen how valuable veterans, free-agent eligible, are signed 5-oku (in yen, roughly 5.05M USD), while his teammates are hanging around 4000-man (USD 404,000).

With the kind of advertisement endorsement and marketing value for the ball club’s parent company (that’s always selling something directly to fans) work in Japan, a lot of my pre-mentioned market factors are covered; and it’s big league money (mentality, owner’s thinking). In short, we can hence predict that a one-year deal for a star player is roughly 12.5 times more than league average.

So, what’s the average Major League salary for all players last year? or maybe last three years? It was $3.2M according to ESPN, Dec., 2012. Times that to 12.5, it gives us EXACTLY $40M.

Wow, the fans here are correct. Giving Trout more than that will start a riot, and MLBPA will probably shook its head for A.E.Else in the league, owners, presidents, players alike. So let’s be true to the reality and stop overpaying what the market can afford.

jorgesca
Member
jorgesca
2 years 11 months ago

Agree and I find it odd nobody mentioned it earlier.

Slats
Guest
Slats
2 years 11 months ago

FanGraphs really need to produce a new stat called WBT (Wins Below Trout).

Luke Hochevar
Guest
Luke Hochevar
2 years 11 months ago

I said 30 million. Rational: I’m a Rays fan. The question was “how much would I pay”. I believe he is worth every penny of 50 million, but My team has about 30 million to spend, and I’d like that for Christmas. No other gifts mom and dad. Just like the Sega Genesis 20 years ago. You can keep everything else, just get me a Genesis.

Trade Price. Don’t bring back Luke Scott. Trade Joyce before arbitration. Trade Hellickson so no arbitration. Rodney and Farnsworth are gone. Bam- 30 million. Get it done Friedman!

TKDC
Guest
TKDC
2 years 11 months ago

That wasn’t actually the question.

Word
Guest
Word
2 years 11 months ago

My vote was depressed by Dave’s stipulation that I run a .500 team. If I was starting with a 90-win team, that might add $10m to what I’d pay for Trout. I don’t want to pay $50m for a player who might not get me to the playoffs even if he stays healthy.

Z.....
Guest
Z.....
2 years 10 months ago

I’m pretty sure I put a number down between 37 and 42 million. I dont remember exactly what I put down, but I’m pretty sure I remember taking into consideration what funds I have left to fill any other holes on my roster. I think that plays a part in determining how much I would pay. If you have enough to accommodate paying Trout what he is worth and filling other holes to ensure yourself a playoff team, then Trout is easily worth $50 million, assuming that 1 WAR equals $5 million and you think he will at least put up an 8 win season. You are willing to possibly overpay him a bit based on the fact that it is a 1 year deal, and you dont need to risk losing more on a long term deal where he may get injured…

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