Trout’s Next Contract

This offseason has seen the signing of contracts of three of Mike Trout’s contemporaries. Manny Machado signed a ten year deal with the Padres. Nolan Arenado remains with the Rockies for potentially another 8 years. Bryce Harper just completed terms with the Phillies, locking him up for 13 years. In addition Giancarlo Stanton is in the midst of a 13 year contract with the Marlins/Yankees. These four contracts represent the best available information about what kind of extension the Angels might offer Trout and/or what kind of deal he might expect on the open market after the 2020 season. While none of these players offer the same performance value as Trout, in fact he might be as good as any two of them combined, they represent the elite talent at the same age.

Here’s a look at those four contracts:

Player Years Average Annual Value Total Value
Giancarlo Stanton 13 $25 million $325 million
Manny Machado 10 $30 million $300 million
Nolan Arenado 8 $32.5 million $280 million
Bryce Harper 13 $28.38 million $330 million

Bryce Harper gains the most value out of one contract and likely won’t play with any other team in his career (unless he’s traded). Arenado has the highest annual paycheck year-over-year and has the ability to opt-out after just three years which gives him the opportunity to increase his contract value later. Trout is earning just over $34 million per year on his current contract.

It’s safe to say that a new contract for him would start at more than $34 million. Player values are approximately $8-$10 million per 1 win over replacement value (WAR). Meaning a 2 WAR player can expect to make between $16-$20 million. Trout has consistently shown he can produce in the 8-10 WAR range. That means Trout’s on field play could be valued as high as $100 million dollars per year! Even if Trout were to be paid $50 million dollars a year, most teams would consider it a bargain.

Father Time is undefeated. Trout won’t always put up those numbers. If he’s still playing baseball at the age of 38 or 39 most teams would consider it a positive if he’s producing 1-2 WAR. So it’s likely that teams are willing to overpay for his final 3 years of his career so that they can capitalize on the bargain of his more productive years.

You could break down the remaining 12 years of his career with these rough estimates of value:

Age 28 – 8 WAR
Age 29 – 8 WAR
Age 30 – 8 WAR
Age 31 – 8 WAR
Age 32 – 6 WAR
Age 33 – 6 WAR
Age 34 – 5 WAR
Age 35 – 4 WAR
Age 36 – 3 WAR
Age 37 – 2 WAR
Age 38 – 2 WAR
Age 39 – 1 WAR

Over 12 years that’s a total of 61 wins. Adjusting for inflation and a general increase in player salaries, we could estimate that a win is worth roughly $11 million over those 12 years. That means that Trout would be worth over $670 million or $55 million dollars per year!

This would be the first Major League contract over $500 million and it would be double what any current player is currently getting. It would be doubtful that Trout would actually see a contract in that range even though it could be justified. Mike has never been the type to look for every last red cent in his contract. He wants to be compensated adequately but doesn’t require his agent to get the absolute maximum contract. If he signs an extension with the Angels before the end of his contract it will probably be for 10-12 years with average value of $38 million ($380-$456 million total). There would likely be an opt out (or two) built in to the contract so that Mike can return to free agency if the Angels aren’t competitive.

If he decides to enter the free agent market two of his most productive years would be behind him. He would still be on track to earn an additional 45 wins. He likely would be offered something in the $38-$42 million range for no more than 10 years. That’s still $380-$420 million dollars.

There are two reasons Trout will likely sign an extension with the Angels rather than enter free agency. The first is the rumors of an impending strike or a lock-out. The collective bargaining agreement happens to expire at the same time as Trout enters free agency. Many players are taking guaranteed money now so that they don’t have to worry about the future of player-owner relationships. The second reason is that Trout understands what it means to build a baseball legacy. The best players in the history of the game are associated with one team. The Angels have the financial means to pay him market rates, he says he enjoys playing in Anaheim, and the Angels farm system is just about to start producing excellent pieces to complement his talents. The possibility of both a high contract and a championship exist with the Angels as much as any other team. Look for Mike Trout to sign an extension either at the end of March 2019 or November 2019.

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