Last week, the Angels agreed to give Mike Trout a $1 million salary for 2014, a record amount for a player with absolutely no leverage. This agreement was quite likely part of ongoing negotiations for a long term deal that will keep Trout in Anaheim beyond the final four years that the Angels control his rights. According to various reports, it is quite likely that Trout will sign a new contract within the next month that will not only guarantee him his arbitration salaries in advance, but will also keep him in southern California for three or four years where would have otherwise been eligible for free agency.
The rumored price tag to keep Trout in Anaheim has ranged between $140 and $170 million, which is certainly a life changing amount of money. That kind of contract not only ensures his own financial security, but likely the financial future of several generations of Trout’s still to come. It’s the kind of guaranteed money that seems nearly impossible to turn down, because after all, after the first $100 million, who is really counting anyway?
But Mike Trout has already proven he can do things that no other human being on earth can do. For his next spectacular accomplishment, he should walk away from the $150 million or so that few of us can imagine turning down. Even with life changing money on the table, Mike Trout should tell the Angels that he’d rather go year to year instead.
The main selling point of these early career long term extensions is that the player unloads the risk of injury or decline that could set in before they ever get to cash in as a free agent, securing enough money in advance to ensure a comfortable lifestyle without having a knee blow out before the first big check is cashed. The Angels pitch to Trout will essentially center around the fact that guys like Grady Sizemore are a reminder that early greatness does not guarantee a big contract in free agency down the line. In exchange for committing for a few extra years, they’ll make sure that he’s still extremely rich even if his body ends up betraying him in the next few years.
But I think the reality is that Trout has already passed the point of a serious injury wrecking his future earnings potential. At this point, Trout is just one single year away from arbitration, where his 2015 salary will be determined based on his career performance. And the reality is that he doesn’t even have to be that good or healthy next year to land a really large payout in arbitration.
For example, Giancarlo Stanton just avoided his first trip through arbitration by settling with the Marlins for a $6.5 million salary in 2014, despite the fact that his 2013 season was a massive disappointment relative to his prior performances. Last year, Stanton hit just .249/.365/.480, down from .290/.361/.608 in 2012, and he only played in 116 games due to lingering hamstring issues. Stanton was roughly an average player in his final pre-arbitration season, but the Marlins still gave him $6.5 million because of what he’d accomplished previously; his prior numbers would have bolstered his arbitration case significantly.
Trout could blow out his knee on Opening Day, miss the entire season, and still go to arbitration next year with better career numbers than Stanton. Even in the worst case scenario, Trout’s 2011-2013 numbers essentially guarantee him at least $7 or $8 million in salary for next year, and if he even performs half as well as he has the last two years, he should easily be able to challenge the $10 million record for a first time eligible player. While his 2015 salary isn’t yet set in stone, his early career performance has essentially established a minimum payment that will make him very rich, and allow him to live comfortably for the rest of his life if need be.
And the same is essentially true of 2016 and 2017 as well. It would take something like the Bubonic Plague for the Angels to ever consider non-tendering Trout in one of his three arbitration eligible seasons, and because the CBA prohibits teams from making an offer of less than 80% of the player’s previous season salary, Trout is essentially guaranteed something close to his 2015 salary for the two additional years beyond that as well. In other words, even if Trout’s career goes the way of Grady Sizemore, and he spends the next few seasons trying to stay get healthy, he’s still likely to earn something in the range of $20-$25 million before he reaches free agency, solely based on what he’s already accomplished.
With any kind of reasonable health and performance, he’s likely in line for something closer to $50 or $60 million, but he’s not actually risking the entire sum by going year to year. Short of MLB just closing it’s doors and shutting down, Trout can already count on banking something in the $20-$25 million range for the next four years; the amount he’s risking by going year to year is the amount he would make above that total. His first few tens of millions are essentially already made.
Now, of course, there’s a pretty big difference between $25 million and $150 million, so it’s not like the Angels offer doesn’t come with some real benefits. But it also comes with a commitment to remain with the Angels, and Trout should look around and ask himself if this is really where he wants to spend the best years of his career.
The Angels should contend in 2014, but a realistic assessment of their organization would put them in a similar position to where the Phillies were a couple of years ago. Not only have the contracts for Albert Pujols and Josh Hamilton not particularly worked out since their signing, the team also backloaded those deals, so the worst parts of those contracts haven’t even kicked in yet. In 2016, the quartet of Hamilton, Pujols, C.J. Wilson, and Jared Weaver will make a combined total of $91 million between them, and an extension for Trout should push him into the $25 million range by then as well, meaning that the Angels would owe roughly $116 million to five players. Even with their lavish TV contract and Arte Moreno’s willingness to spend, it is going to be very difficult for the Angels to surround those five with enough talent to contend.
Especially because there isn’t exactly a cavalry of help coming through the farm system. Keith Law recently rated the Angels group of prospects as the second worst in baseball. In order to fill several of their current holes, they had to move young talent in Mark Trumbo and Peter Bourjos this off-season, as they simply didn’t have the supply of prospects necessary to upgrade their roster without removing pieces from the big league club. And since the Angels are still very much trying to win while Pujols, Hamilton, Weaver, and Wilson are still capable of contributing, it’s not like they can expect to supplement their crop of minor leaguers with high draft picks in the next few summers.
The Angels are a team with a massive amount of money tied up in aging, declining players, and no real wave of youth coming to fill in the gaps when the money runs out. Because Trout is the game’s best player, they can still contend even with all the other mistakes that have been made, but if you take him off this roster, the Angels aren’t really that much better than teams like the Twins or White Sox, and at least those organizations are already building to the future. By the time Trout’s eligible for free agency, the Angels could easily be in the situation where the Phillies are now, needing to rebuild but with too much invested in former stars to make the full commitment.
Now, a lot can change in four years. Maybe Jerry DiPoto will turn the farm system around, and the Angels will find a sucker to take the rest of Pujols’ deal the same way that they were the sucker who took on Vernon Wells’ contract. It is possible that the Angels’ future will be a lot brighter in a few more years than it looks now. Especially if they figure out a way to keep Trout around.
But the reality is that the Angels need Trout far more than he needs the Angels. If he goes year to year and remains the game’s best player, he’ll be the most coveted free agent in the history of the sport. He’ll be able to pick his spot, commanding as much money as he wants from whatever team he wants to play for. And because he’s already accomplished enough to line up some pretty solid arbitration paydays, there actually isn’t that much risk for Trout in going year to year. Rather than selling his future for a fraction of what he’s worth on the open market while simultaneously committing to play for a team that might very well be atrocious in a few more years, Trout should give the Angels time to get the organization straightened out and prove to him that they are worthy of retaining the game’s premier young talent.
Even without a long term deal, Trout’s financial future is already secured. Now, he should take the opportunity to incentivize the Angels to improve enough to keep him around, while also getting a shot at getting landing baseball’s first $300 million contract, and maybe even its first $400 million deal at the same time.
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