No matter how hard I try, it seems that I just can't go more than three weeks without having to write something pertaining to a Mike Trout contract extension. Thanks a pantload, Dodgers.
In the wake of Clayton Kershaw's blockbuster seven-year, $215 million contract extension, the baseball world can't help but turn their collective eyes down the I-5 South to Anaheim and Mike Trout. We've already spent the whole winter talking about $400 million and $300 million extensions for Trout, so it is only natural that with Kershaw getting his big payday that the hype machine kick into high gear once again for Trout.
Let me be the first to say, "Argh."
It seems that the analysis around a potential Trout contract has devolved to a point where people are less concerned with what is realistic for Trout and more concerned about getting someone, ANYONE, to that magic $300 million mark on a contract. It is a narrative that people just seem to be begging for.
Look at the whole Kershaw saga as an example. Back at the end of last season there were reports that he actually turned down a $300+ million extension because he didn't want to talk contract during the season. Then when word spread that he and the Dodgers were re-engaged in contract talks, that mythical $300 million number was conjured up again. All indicators were that was the number they were circling around. And that was a report from the Dodgers side, not the Kershaw side trying to drive up the price.
So what happened? $215 million was the final number. That is a mind-boggling amount of money, but it is well short of the $300 million mark. And that is with the Dodgers prominently involved. This is a team with a front office that has been going out of its way to overpay people. (Hello, Brandon League… and Brian Wilson… and Andre Ethier… and Zack Greinke… and Matt Kemp… and Alexander Guerrero… and I think you get my point). If they aren't going to lavish someone with a $300 million deal, who will?
A slightly less relevant example is the free agent contract of Robinson Cano. As you know, he got $240 million from the Mariners this offseason. As you might also know, he came into the free agent market asking for $300 million. He, too, did not even come close.
His case is less relevant to Trout because he was on the open market, so he had more suitors and thus more leverage. Kershaw is more relevant in that he was still in his arbitration years with the Dodgers, but he was headed into his final arbitration season, so still had a fair amount of leverage since he just had to go another season before hitting the open market.
But Trout? Trout is four years from free agency. He is one year away from arbitration. He is about as cheap this season as he can be. That gives him very little leverage in these discussions, so explain to me how it is that he is going to be the one to break the $300 million barrier?
There is no doubt he has the talent for such a payday and would assuredly get that much if he did hit the open market, like Cano, or even was one year away from free agency, like Kershaw, but he's not. He has four years in which his salary is going to be artificially suppressed by the salary model of MLB. Assuming a ten-year deal as is often cited in the $300 million hypothetical, he is going to spend three or four years (depending on when it is signed) in which he is going to make significantly less than the average annual value of $30 million. That's a lot of making up to do in the latter half of the contract.
Just to put some actual numbers into this scenario, let's imagine an extension that starts in 2015, which is the start of his arbitration period. If he were to make $11 million in 2015, $14 million in 2016 and $18 million in 2017, which would all be record arbitration reward records (for perspective, Kershaw's deal pays him $14 million in the first year of his pact which would otherwise be his third and final arbitration year), then he would have to earn $257 million over the final seven years of his contract. That's a hair over $35.7 million in average annual value. Kershaw's contract maxes out at $33 million as the most expensive year of his deal, making it seem a bit far-fetched that Trout would have to earn nearly $3 million more *on average* than Kershaw would earn at his best.
Now, I love Trout, but that's a good bit more coin to pay the best position player over the best pitcher. There is also the small matter that the reason teams sign these deals with players is because it usually gets them at least a small discount on the price tag in exchange for the player getting financial security for the rest of his life. This is especially true during the arbitration years the contract covers.
The other wrinkle here is getting Trout to sign long enough to get to a contract that would be worth $300 million. If he were to sign a ten-year deal that kicked in in 2015, he'd be a free agent as he headed into his age 33 season. That is a year older than Pujols was when the Angels signed him and two years older than Cano when he signed this winter. If Trout, and really his agent, wants to land a second massive contract for himself, then that puts him a bit on the old side. It would be much smarter for Trout to sign for no more than eight years so that he can become a free agent while he is still in his prime. If that is what they have in mind for Trout, there is no way he even sniffs $300 million. But as a free agent at age 30 or 31, he could definitely land a ten-year deal like Cano and Pujols. Between the open bidding process and the rate of salary escalation, Trout should easily surpass $300 million at that point, perhaps even $400 million.
That is the prize he and his agent should really have in mind. Get the security blanket contract extension now to make sure that Trout is set for life, then go for the record windfall after that because there isn't anyone that looks like they are going to beat Trout to the $300 million mark, even if he waits eight years to go for it.
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