So What Does a Mike Trout Extension Look Like Now?

Speculating about how much money it would take to sign Mike Trout to a long term deal has become something of a sport unto itself. Ever since he broke into the big leagues and almost immediately established himself as the best player in baseball, people have wondered aloud about what kind of deal he could command. The fires were stoked even further when the Angels decided to renew his contract for just $510,000 last year, allowing him to rack up another +10 WAR season and get even closer to free agency. Now, with just four years of team control remaining, the Angels are reportedly hoping to get Trout signed to a long term deal that will keep in Anaheim for the foreseeable future.

So, let’s play the Mike Trout Extension Game again. With Freddie Freeman resetting the extension market for players with three years of service time, we have a new data point to work with anyway, and so we probably need to update our prior estimates to reflect the new reality of extension pricing. So let’s work through the numbers and see what we can come up with.

The next four years are the easy part. While arbitration prices aren’t set in stone, they are not that difficult to model, as the system depends heavily on historical precedents. While Trout would likely be the best player to ever go to arbitration if he got there, the thing that makes him particularly extraordinary — that he’s this good at such a young age — is not eligible for consideration in an arbitration hearing. Trout’s extension will absolutely take into account his youth, but his arbitration prices will not, as they would simply be based on what he’s done relative to other players with similar levels of service time, regardless of the fact that he’s five or six years younger than some of his comparisons.

However, Trout would still likely be in line for record arbitration payouts, especially if his 2014 season results in another +9 to +10 WAR performance as the forecasts project. He might not have the MVP trophy that Ryan Howard possessed when he set the record with a $10 million arbitration award in 2008, but his back to back second place finishes still count in his favor and will carry a lot of weight, and of course, there’s some chance he’d win the MVP if allowed to play out 2014, so the Angels will have to factor that possibility into the price. I don’t think it’s a stretch to say that Trout would break every arbitration record if he was allowed to go year to year, and the Angels will likely have to pay prices that reflect that expectation in his extension.

For comparison, Howard’s four arbitration years went $10M/$15M/$19M/$20M, though the last three were bought out by an extension prior to the 2009 season. In total, though, Howard made $64 million before reaching free agency, and this was before the television rights explosion. Of course, he also had the benefit of going to arbitration four times, which Trout will not have, so he’ll have to make do with three record payouts instead of four. If we give him $15M/$20M/$25M, Trout would get $60 million over his final three arbitration years. The Angels might want to negotiate those down a bit in a long term deal, but that’s probably the expectation of what he’s likely to get if they go year to year, so we can speculate that an extension for Trout would have to be backed onto the $60 million he’s likely to get over the next four years.

So now the question becomes how many free agent years Trout is willing to sell, and at what price. Because Trout is so young, there’s an opportunity for both sides to reach a long term deal that doesn’t carry Trout beyond his 30th birthday, allowing him to get a chance at a second huge contract if he maintains his historic pace. As we’ve seen with recent extensions for Freeman, Clayton Kershaw, and Elvis Andrus, young players signing long term deals have put a real value on the chance to hit free agency again while still young enough to land a second monster contract. While there will likely be some speculation about longer term deals, I think a nine year deal that ends after Trout’s age-30 season is the right mix of security for Trout while also setting himself up to be a premium free agent for a second time.

A nine year deal means that Trout would be selling five of his free agent years. What should those years cost? This is where it gets a little trickier. The recent trend in early career extensions has been to essentially pay something close to current market price for future free agent years. Essentially, teams are buying out future inflation and paying for the right to not have to sign a long term deal that takes a player into his mid-30s, and in exchange for those benefits, the player gets something close to the $6 million per win market rate for their FA years.

Well, that presents a little bit of a dilemma with Trout, because $6 million per win for a +9 WAR player leads to a $54 million per year salary. As good as Trout is, he’s not getting $50+ million per year four years from free agency. Kershaw’s just-signed $215 million extension guaranteed him an average of roughly $32.5 million per year the six free agent years he sold, and while I believe that Trout will beat that AAV, we’re not going to see a leap from $33M to $50M, especially considering their relative proximity to free agency.

But as good and as young as Kershaw is, the reality remains that Trout is significantly better, projecting for roughly +4 WAR per season more than Kershaw going forward. In fact, Trout’s forecasts suggest he is, by himself, as valuable as Kershaw and Freeman put together, and they combined to sell their FA years for pretty close to that $54 million per year mark. While we could put together a reasonable argument that Trout is worth $50M per year for his free agent years, he’s not going to get that; it’s just too far removed from the norms of the day.

As crazy as it sounds, $40 million per year for those five years would actually represent something of a discount, given Trout’s expected production going forward. Even though it’s quite a bit more than Kershaw got, Trout is quite a bit better than Kershaw, and comes with less risk since he isn’t a pitcher. And the separation would be large enough that Trout would likely remain the game’s highest paid player even with future inflation, as that AAV in those years is unlikely to be surpassed any time soon.

Pricing those free agent years at $40 million apiece, in addition to the $60 million he’d be getting for his remaining years of team control, would bring the total deal to $260 million over nine years. The deal would fall short of being the largest contract in baseball history, but would easily be the largest deal for any player still under team control. If Trout was particularly interested in breaking A-Rod’s record, adding a 10th year to push the deal to $300 million in total wouldn’t be that difficult, and should still be something the Angels are interested in doing.

These numbers might seem insane for a non-free agent, but the longer the Angels wait, the more expensive this is going to get. If they want to avoid a bidding war that might eventually push Trout’s total contract up near $400 million, they should get him signed sooner than later. 9/$260M or 10/$300M might sound insane, but really, it would represent Trout taking a bit less than what he’s actually worth. That’s how good he is. And that’s why this deal is going to have to be enormous.



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Dave is the Managing Editor of FanGraphs.


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Tim
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Tim

Trout seems like the ideal case for going year-to-year. His value is really unlikely to go up from here.

Anon
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Anon

The closer to FA Trout goes, the more likely he will not give any FA years. That path would allow him to sign a huge 10 year FA contract with opt-outs at times of his choosing.

byron
Member
Member
byron

It’d be interesting to model what kind of year he’d have to have for his value to stay the same. Another 10-win season, and a year closer to free agency, and the value’s going up. But maybe if he has a 5-win season? What if he somehow had a 1.5 win season? What would he sign for after a 2014 where he inexplicably hits 240/320/380 with subpar defense and no injuries?

Dave
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Dave

I don’t see how anyone who has ever watched Trout play could take seriously the possibility that he would hit 240/320/380.

byron
Member
Member
byron

Oh, OK.

B N
Guest
B N

Really? What if he had the dreaded, but vague “wrist pain” or “fatigue”? The truth is, every player has a bad season here or there. You know who I wouldn’t have expected to have hit 255/289/405 in his first year of a big contract? Carl Crawford. But he did it. And I will tell you, you can save a lot of money by waiting to sign a guy after a bad season compared to a good one…

Gabe
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Gabe

But Carl Crawford in his best season was never as good as Mike Trout. Crawford’s best season was at peak age too (28, last season with TB), while Trout hasn’t come close to reaching his peak age.

Garrett
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Garrett

Gabe,

That post is ridiculous.

FOH
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FOH

You can’t be serious. This is a 230~ lb man who throws himself into walls and dirt without abandon. Given his value, he’s a reckless player who, I’d bet, I will wind up costing himself millions because of his refusal to calm the fuck down. Mike, there’s a reason why the top 25 defenders aren’t paid jack but the top 25 bats are. Prioritize, young man!

No troll, I would sign Cano for his present contract way before signing Trout for the same at his age. Pujols also.

Anyone who argues with that, name me one. Name me one OFer built like a MLB whose defensive stats were half his value, and who didn’t wreck himself before his 27th-28th bday.

Catoblepas
Member
Catoblepas

Carl Crawford =/= Mike Trout

Travis L
Guest
Travis L

Well, I mean, in his first 135 PA he hit .220/.281/.390…

byron
Member
Member
byron

I just wanted to theorize about what would happen in those different scenarios, I’m not sure why Dave felt like he had to inform me one was unlikely and the whole thread has become a debate on projecting Trout’s actual value.

Dave
Guest
Dave

Well, he did say “without being injured.” Obviously, anything can happen with injuries. I could see a “bad” healthy season for Trout being perhaps around an 800 OPS, but not 700. That would still bring down the price quite a bit. Somehow I actually think he may get a little better, though!

B N
Guest
B N

@Gabe: Anyone want to set the over/under that Mike Trout has already had his best WAR season? I think Trout is great. I think he’s got a ton of value ahead of him.

But projecting a guy with two 10 WAR seasons to have room to grow is insanity. Could it happen, definitely. Is it more likely than an injury or other factors that halve his value (to the mere-superstar level of 5 WAR)? Certainly.

Plus, aging curves pretty much state that defense and speed tend to do nothing but remain steady or decline. So if you’re projecting him to improve, you’re basically banking that somehow his hitting/body is not adequately developed and he could hit better than this. Given that he is already unprecedented, this MIGHT be possible. But I’d take the under on this too. If he got much better, they’d just give him the Barry Bonds treatment. You can only be so good when people pitch around you constantly.

bstar
Guest
bstar

I’ll take the over on that one, B N. I think you’re underestimating the quality of a player who can put up a 10+ WAR season early in his career.

Here are the guys who have put up a 10 WAR season at age 25 or younger (B-Ref numbers):

Ruth
Gehrig
Mantle
Hornsby
Cobb
Mays
Trout
Williams
E Collins
Foxx
A-Rod
Speaker

Not counting Trout, that’s 11 players. Over the course of their careers (past age 25), eight of those players put up 22 more seasons of 10+ WAR, with only Foxx, Collins, and A-Rod never being that valuable in a season again.

I understand it’s possible there’s no longer an aging curve anymore. If Trout does put up a few more 10+ WAR seasons, I’d agree they likely aren’t going to be monster Bonds/Ruth type of seasons.

But you never know. What if he becomes a 40+ HR guy down the road? What if he improves a little defensively? I think it’s a stretch to suggest he’s peaked in the outfield at age 21.

Trout was a little better with the bat last year than 2012 but worse in the field. All he has to do to put his biggest season yet is have a 2013 offensive year and a 2012 defensive one. If he did that he’d be over 11 WAR. Certainly very possible.

John C
Guest
John C

I don’t see him getting any better defensively than he already is. That part of his game is likely to decline in a hurry. He probably isn’t going to maintain the speed part of his game at the same level for much longer, because most players, even great players, simply don’t do that.

However, he might more than make up for that by moving up from a 30-homer player to a 40-homer player. He still has room to grow as a hitter, even if the physical abilities are probably at their peak already. As far as the potential for injuries go, I look at it this way. Mickey Mantle had about as terrible an injury as a young player can have when he was 19, and he still went on to be better than anyone else in the league until he was 32. Trout is so good that he could tear up a knee and lose his speed at 22, and he still might put enough runs on the board to justify a $30 million salary.

Dan
Guest
Dan

but there is the chance of injury

Babyspittle
Guest

Last year didn’t Trout play mostly left field?

Wouldn’t the same season he put up result in more WAR while playing primarily CF?

hansman
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hansman

THE EYE TEST, DAVE! THE EYE TEST!!!!

While improbable, if he gets a bad start out of the gate, gets injured (better hope its not a hamstring or a wrist)and limps to the finish really hampers his extension value.

Baltar
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Baltar

If Trout is getting $40M a few years from now, he will probably only need about 5 WAR to justify it.

JJ
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JJ

I love Angel’s scout Greg Morhart’s initial report on Trout, when he was 17: “Best athlete. Best player in the world—period. Best player on the planet.”

JS7
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JS7

FanGraphs really need to introduce WBT (Wins Below Trout).

Nick
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Nick

Uh, if his value is as high as it’s going to be doesn’t the mean he SHOULD sign an extension?

NS
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NS

The other option was to interpret his comment as speaking of the *team’s* best interests, which would make complete sense. Yet you went with this one.

John
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John

Not if the difference between what he can get now versus his current value is so great that even if his value goes down, he can still make more than what their greatest offer will be.

Baltar
Guest
Baltar

I can’t imagine both the team and Trout wanting to go year-to-year.
When I saw the title of this post, I immediately thought 10-years $300M.
I was pleasantly surprised that Dave came out to the same numbers with logical reasoning.
That’s a lot of money, but, as Dave pointed out, it’s $60M total for the 4 years of team control and $40M per year for the 6 FA years.
It’s fair to both sides. The Angels would be taking a big risk, but with the likelihood of getting a bargain, perhaps a very big bargain with salary inflation likely in those future years. Mike would be getting $300M. How could anybody turn that down?

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