Pondering a Mike Trout extension …
Mike Trout spoke to reporters in Arizona for the first time on Wednesday, but before taking questions for 15 minutes, the Angels’ 22-year-old center fielder wanted to say one thing.
I know what you guys are gonna ask. I’m here to get ready for the season. I don’t want to comment on the contract negotiations and stuff. I’m here to just get ready, prepare myself for the upcoming season.
Trout may not talk about it publicly, but his agent and the Angels will surely continue to have dialogue.
The Angels, owner Arte Moreno confirmed, are in “active discussions” with Trout and his agent, Craig Landis, over a long-term deal even though he’s still four years away from free agency. The reason is three-fold: (1) The last thing the Angels want to do is go into a complex, record-breaking, all-over-the-Internet arbitration hearing with Trout next season; (2) signing him to a deal will give the organization some much-needed cost certainty; (3) duh, they’d like to buy out some of his free-agent years before it’s too late.
An important note about a potential Trout extension, which is worth repeating: Even if both sides agree to terms tomorrow, Trout can’t sign the deal (and thus the Angels can’t announce it) until after Opening Day because the organization doesn’t want it to count towards its Collective Balance Tax payroll until 2015, when Vernon Wells and Joe Blanton are off the books and the Angels have more wiggle room.
I explained it in more detail here, but here’s the gist: The CBT payroll, used by Major League Baseball to determine which teams will be taxed for going over the luxury-tax threshold, takes into account the average annual value of contracts, not the yearly breakdown. So, if Trout signs a 10-year, $300 million deal, that would be $30 million counting towards the CBT payroll, even if Trout is only making $15 million in Year 1.
Now, having said all that … I don’t think Trout becomes baseball’s first $300-million player.
That’s the shiny round number everybody keeps been throwing out, but it’d be hard for me to see Trout get that given his service time and his camp’s desire to set him up for two mega contracts.
Let’s say Trout doesn’t sign an extension, so he goes to arbitration and shatters every record based on service time. And let’s say that has him making $15 million as a first-year arbitration-eligible player, $20 million as a second-year arbitration-eligible player and $25 million as a third-year arbitration-eligible player. (That, by the way, is quite generous.) If he gets that, and you factor that into the breakdown of a 10-year, $300 million deal, then in his seven free-agent years, that contract is carrying an AAV north of $34 million.
Dodgers ace Clayton Kershaw just recently set the record for AAV with a seven-year contract that pays him more than $30.7 million annually — but he signed it with one year left before free agency.
The Angels, in my opinion, are still at a point where they can offer less AAV than that and still give Trout’s camp incentive to take it. Why? Because there are no certainties in this game. Trout is the best all-around player in the game, but he’s a whole four years away from free agency. A lot can happen — injuries, under-performance — and it’d be hard to walk away from so much guaranteed money this early. That’s why clubs do this.
The question, of course, is: What’s the price that makes both sides comfortable?
I had this conversation with Jim Bowden while on MLB Network Radio recently. Bowden, whose opinion I respect, said if he’s Trout’s agent, he’s demanding that the Angels pay him more than any other player in baseball if they want to buy out some of his free-agent years. And so I said: What if the Angels offered a long-term contract with, say, an AAV of $22 million (just throwing out a lower number, that may end up being too low)? Would you really turn that down with so much time left before free agency?
“I’d take that risk with that player,” Bowden said.
Fair point. If ever there was a guy to take a risk like that one, it’s probably Trout.
And that’s what makes this all so fascinating.
My guess (and that’s all this is)? I’d say a $35 million AAV for his four free-agent years (Kershaw maxes out at $33 million by 2017). Given that, the (perhaps generous) arbitration projections and the potential desire to make Trout a free agent again at or just before age 30 — seven years, $200 million ($28.6 million AAV) for a Trout extension.
Again, just a guess.