Predict Mike Trout's next contract

[owbc]

It looks like the earlier predictions are coming true and MLB is going through another salary inflation boom. The last boom reached its peak when A-Rod signed a 10-year, $252 million contract with the Rangers in December 2000, which would be a $341 million contract today after adjusting for inflation.

 

Mike Trout hits free agency in 2018 at the very young age of 26. When A-Rod signed his mega-contract, he was almost exactly one year younger than Trout. At that time, Rodriguez had 189 HR, 4 seasons with an OPS above .900, and two top-3 MVP finishes. Trout already has two top-2 MVP finishes, 62 HR and two full seasons with an OPS above .900. Trout has accomplished this in an era that is much more pitcher-friendly than the late 1990s/early 2000s.

 

Assuming Trout continues to put up numbers, what kind of contract could he be looking at? If Robinson Cano is worth $24 million per year at age 31, I think Trout should approach $40 million per year, especially since there are still 4 more years for his numbers to inflate. With several teams likely to be competing for his services, the length of the contract may approach 15 years, although 12 years might be a more reasonable number. The top payrolls should exceed $300 million by this time.

 

12 years, $480 million.

[PrinceEatMeat]

There's absolutely no way the Angels let him hit free agency, so that may affect the amount of money he gets. Will be interesting to see what kind of extension he'd agree to.

[igor67]

Both of the above points are valid, and for further consideration Beltran just got 15 million a year for ages 37-40. Regardless of stain Braun's deal is a huge plus at this point.

[RockCoCougars]

http://i.bnet.com/blogs/drevil.jpg

 

Maybe this isn't too insane. For goodness sake, Robinson Cano just got a quarter of that.

[homer]

Camden Yards was built for 110 million in 1992. What is that 20 years later with inflation? Like $220 million? Basically the Mariners are saying Robinson Cano is worth more than Camden Yards.

 

By comparison, Miller Park cost $392 million to build. Trout may be worth more than Miller Park. Insane.

[SRB]

I think inflation will level out again in a couple years. Aren't this year's deals fueled by the new TV revenue agreement, or whatever?

 

I think he could maybe get between $350-$400 on a lifetime-type contract though (like 13+ years).

 

A-Rod isn't directly comparable because he was an elite shortstop, Trout is not.

 

*Edit* Also, Trout is clearly taking PEDs so if that gets discovered it's going to affect his value, obviously.

[owbc]

MLB teams spent $5.1 million per WAR in 2013 and that number should approach $6 million in 2014. So the case could be made that Mike Trout (~10 WAR/year) is worth $50-60 million per year in today's game. A conservative 10-year projection of 80 WAR definitely supports a $500 million contract.

 

I agree that the Angels would be wise to buy out Trout's arbitration years. Even those years should be worth an average of over $20 million/year. If he signed the contract today, the cost for any free agency years has to start around $30 million in my opinion (the Angels are already going to be paying Josh Hamilton $30 million/year!). So a 6-year extension signed today that buys out all 3 arbitration years and two free agency years should probably be in the $120-140 million range. Trout makes almost nothing now so it might be wise for both parties to get a deal done sooner rather than later.

 

The elephant in the room with these new TV deals is that cable subscriptions are dropping at an accelerating rate. These mega-contracts are mostly funded by TV subscriptions and advertising. There's the potential for the bubble to burst. What happens if Time Warner goes bankrupt?

[paul253]

Trout may be worth more than Miller Park. Insane.

 

Not just Trout. Ten years of Trout.

 

The money athletes get is just insane. An old, well past his prime Carlos Beltran is next season going to make about 6x more money than most people will make in their entire lifetime.

[xisxisxis]

So a 6-year extension signed today that buys out all 3 arbitration years and two free agency years should probably be in the $120-140 million range. Trout makes almost nothing now so it might be wise for both parties to get a deal done sooner rather than later.

 

Trout and his agent were extremely unhappy when the Angels renewed his contract last year basically at the minimum. The Angels aren't going to get anything from Trout as a discount, they will have to come up with market type numbers. So to get him signed for 4 years (1 minimum plus 3 arby years) is gonna cost at least $115M alone as his arbitration years he will likely be paid as the highest player in the game (so at least $35M per season). He's also not going to give them any free agent years unless they are in the $50M per season range. The Angels are getting no discount and the way they have thrown away money on aging stars Trout shouldn't give them a dime discount. I don't see anything short of $225M for Trout to sign for 6 years. He has the numbers and talent to be paid as the best player in baseball as he is clearly a once in a lifetime talent.

[dlk9s]

I'm thinking like umpteen years, a kafillion dollars.

[umphrey]

If you assume he doesn't decline by the time he turns 26: he is a much better player and 5 years younger at FA time than Robinson Cano who got $240. Clayton Kershaw turned down $300M, and Trout is inherently worth more on a long term deal as a position player. In todays dollars, I think Trout would get $350M. Adjusted for inflation, that will be just over $400M.

 

We'll have to wait and see though. In addition to the TV bubble bursting, there seems to be a bit of a trend to go away from these big deals. The Red Sox won last year by spreading their money around, and it seems like that's what the Yankees want to do this year (if you consider Jacoby Ellsbury and Brian McCann bargains at $263M, anyway). You have to go back to the 2009 Yankees to find a team that really won by buying a superstar, fueled by Derek Jeter and CC Sabathia. There are 4 big contracts out right now: Fielder, Votto, Cano and Pujols. It will be interesting to see if one of those teams wins it next year, although it looks like no one is going to credit the Pujols or Fielder contracts as a contributing factor.

[Eye Black]

What is hard to believe is in the next decade or so we are going to encounter the first half billion dollar MLB player. Then someday there is going to be a billion dollar guy. Seems inconceivable now, but someday Mike Trout Jr., or at least Mike Trout III is going to have a chance at one billion dollars.

[brewcrewdue80]

So a 6-year extension signed today that buys out all 3 arbitration years and two free agency years should probably be in the $120-140 million range. Trout makes almost nothing now so it might be wise for both parties to get a deal done sooner rather than later.

 

Trout and his agent were extremely unhappy when the Angels renewed his contract last year basically at the minimum. The Angels aren't going to get anything from Trout as a discount, they will have to come up with market type numbers. So to get him signed for 4 years (1 minimum plus 3 arby years) is gonna cost at least $115M alone as his arbitration years he will likely be paid as the highest player in the game (so at least $35M per season). He's also not going to give them any free agent years unless they are in the $50M per season range. The Angels are getting no discount and the way they have thrown away money on aging stars Trout shouldn't give them a dime discount. I don't see anything short of $225M for Trout to sign for 6 years. He has the numbers and talent to be paid as the best player in baseball as he is clearly a once in a lifetime talent.

 

What Position Player has gotten 20+mil in even his 3rd year in arbitration?

Anaheim could try locking him to a long term deal but if they just went through with 4 more service years and then traded his last year for some 2-3 insane prospect package, isn't that better than to commit 30-36mil a year when he's to become a Free Agent? Let's be honest he's going to be a 33-36mil/year FA if he hits the market. and at 10 years you assume. So that's 360mil 2019-2028

If you were Anaheim today can you sign him to a 14year deal for 360mil? If you're Mike Trout would you even pass on that?

Maybe it's for 320mil? How great would that be for Trout+his agent to get the 300mil+contract Cano was looking for?

 

But my guess would be Trout would be wise to extend to his 30year old season. Take Anaheim with a buyout of his arb years and add 4 years with a huge option 5th year. This way for Trout he gets in on this big money today while giving himself the opportunity to cash in on a Cano 10year contract when he hits Free agency. And something like these 4 years going for 50mil with his FA years going in lines like: 24/25/27/27 with his option year being 33mil. So all told he'd be signing on at 8years 153mil with option to make it 9/186mil.

I would think every year Trout gets closer to FA adds 2mil per year to any deal he signs.

 

And remember Trout this year will only be making roughly 530k unless they buy his arb controlled years out giving him more this season.

[BrewCrewForever]

Easily $300 mill. Maybe he breaks $400 mill. I can't wait to see it when it happens. Jaws will drop.

[endaround]

Trout may be worth more than Miller Park. Insane.

 

Not just Trout. Ten years of Trout.

 

The money athletes get is just insane. An old, well past his prime Carlos Beltran is next season going to make about 6x more money than most people will make in their entire lifetime.

 

The amount of money athletes generate is insane. And when management has conspired to try to hold down labor costs as much as possible (as a percentage of revenue labor costs have fallen like 20 percentage points) through the draft and international free agent caps the money will eventually flow somewhere.

[Patrick425]

Here is an interesting article from about a year ago that talk about this very topic and ponders what Trout could eventually make. They argue that based on % of total team revenue that players like AROD got at one point in time in their careers and with the new TV contracts of some teams, if Trout were to sign an 11+ year contract it's not completely unfathomable to think he could make $1 billion.

 

http://www.theatlantic.com/business/archive/2012/11/why-the-worlds-first-billion-dollar-athlete-is-just-a-few-years-away/265684/

 

If you count lifetime earnings and endorsement deals, guys like Tiger Woods and Michael Jordan have already reached that billion dollar level.

[torts]

this is all assuming that trout stays healthy the entire time and continues to produce at the same level or better every year. I dont belive he'll do both of those, let alone one for 11+ years straight.

[jhart05]

I don't know. I have to think there must be a breaking point somewhere/someday.

 

I used to like baseball, but the salaries given out the past few years have turned me off. I watched probably only 3 games last year, and that's because I went to the game with some free tickets.

 

I still follow sites like this, but don't watch even the daily highlights anymore.

 

Cable TV is nearing a tipping point with all the material that is available online or various Netflix-type services. Their customers are on the decline.

 

Ticket prices are already starting to price out the "average family of four", unless you want to sit way up there. Yes, they still have promotions and kids days that can bring that cost down.

 

I don't know, I think a combination of those three things, people like me, cable TV decline, and expensive ticket prices, will all come to a head one day and they'll be forced to make some big salary changes in order for the game to survive. At least I hope so, because it's already insane what these players make.

[fondybrewfan]

I agree, salary inflation will only go so far. Ticket prices can only be increased by so much and won't nearly cover the inflation in salaries. TV contracts are all well and good but I don't know that the current trend of ballooning TV contracts will go on forever.

 

I don't think there will be a correction anytime soon; but it does not seem like the current inflation in salaries is sustainable in the long term. Maybe I am wrong.

 

Salaries haven't turned me off all that much. I tend not to think about how much these people make while I am watching; I just watch for my own amusement. Sure I think baseball players are overpaid but I still enjoy watching and attending games.

[Fear The Chorizo]

It's the escalating salaries for players past their prime that is crazy, and unfortunately MLB's current pay structure almost forces teams to spend their money in this manner. It would take an event like Trout suffering a career-altering/ending type injury before his payday to possibly cause the sea-change that is needed to at least bring the pay structure to where it should be. The pre-arby, cost-controlled aspect of paying talented young players peanuts to produce is great, but Trout's gotta be looking around at the rest of the Angels' contracts and shaking his head. I wish more teams locked in younger players to big money deals similar to Braun's - at least they get a player's best years instead of paying them for services already rendered like the Pujols-type extensions. It would benefit baseball longterm if the salary structure was set up similarly to the NBA, even with a much looser cap. Very difficult problem to fix because of the difference in MLB drafts, minor leagues, international signings, etc. The players will never go for that, but you get the feeling that the TV money is going to cut 1/2 the league out from being able to build winning organizations regardless of who they have in management.

 

I get the feeling like MLB salaries for players and exploding team payrolls seem like the housing bubble did before it burst - things can go south very fast if slight changes start happening in projected revenue streams in some markets...ask the Mets about that one. I don't see an abrupt reduction in salaries, but I think high percentages of these teams going bananas with new money are going to regret it more than reap any rewards.

[logan82]

Even the players who get locked in to big money deals rarely get much money at the front end when they would have still been pre arby and arby. Braun got a signing bonus($2.3m) but still only had base salaries around the estimate of what he would have been paid had he not signed a contract.

[jerichoholicninja]

Even the players who get locked in to big money deals rarely get much money at the front end when they would have still been pre arby and arby. Braun got a signing bonus($2.3m) but still only had base salaries around the estimate of what he would have been paid had he not signed a contract.

 

I don't get why players and clubs don't want contracts front loaded. $1M is worth more today than it will be 5 years from now which is a benefit for the player. But then at the end of the contact when the player isn't as good as he was at the beginning it allows the team more payroll flexibility to add better players or trade the player somewhere he wants to go. It seems like wins all around.

[Patrick425]

this is all assuming that trout stays healthy the entire time and continues to produce at the same level or better every year. I dont belive he'll do both of those, let alone one for 11+ years straight.

 

He doesn't have to stay healthy or keep producing for 11 straight years, he just has to sign an 11 year contract. It's all guaranteed after that. I think that's one thing that really turns some people off about baseball and the salaries that are paid to players.