Paying for Possibilities

[AngelsWin.com]

Mike Trout: The 400 Million Dollar Man?

by Joe Tevelowitz, AngelsWin.com Columnist -

 

At the halfway point between the end of the World Series and the start of Spring Training, now is as good of a time as any to look at the realistic possibility that Mike Trout becomes the first 400 Million Dollar Man in Major League Baseball.  After the Yankees got a slap on the wrist for even mentioning the value of giving a long-term contract to Mike Trout, discussing the matter purely hypothetically in comparison to not giving the decade deal to Robinson Cano, the fear of missing out on a career of Trout has to at least be in the pit of every Angels fan's stomach.

 

It's not every day the Angels bring a future Hall of Famer up through their system or that people are willing to speak of a guy who has only played two full seasons as a future Hall of Famer.  However, after two seasons that had Mike Trout being mentioned in the same breath as Mickey Mantle and nearly pulling off the Rookie of the Year/MVP double dose that has only been accomplished by Ichiro and Fred Lynn, predicting Trout's plaque in Cooperstown isn't insane.  However, the 400 million dollar question is: what hat will be on that plaque.

 

It's reasonable to suggest that most Angels fans would jump at the chance to lock up the Face of the Franchise (and maybe soon-to-be face of the league) for as many years as humanly possible.  To do so will likely require a contract that even A-Rod in his prime was never offered.  And A-Rod provides an important starting point in looking at the pros and cons of giving a baseball player a contract that would eclipse the GDP of an island nation, and ostensibly tie the fortunes of a team to the relative continued or predicted success of one player.

 

Alex Rodriguez left the Seattle Mariners for the Texas Rangers not because of any ties to the Texas region, any belief in the Rangers ability to contend, or any feelings of wanting to build something new away from rainy days of Seattle.  Rodriguez left for a $252 million dollar offer that was over 25% more than the deal received by his closest shortstop contemporary, Derek Jeter, that same year.  As ridiculous as it might seem in hindsight for Rodriguez to be valued so much higher than Jeter, Alex Rodriguez's accomplishments to that point and potential were enough for a team to put it all on the line to bring him in.  In signing A-Rod, the Rangers weren't just banking on a guy who, in his first full season, recorded the highest batting average for a right-hander since DiMaggio to go with 36 home runs and 123 RBIs. Nor were they paying for the third member of the 40-40 club.  Or even for the kid who took the Mariners to the ALCS, hitting over .400 in the playoffs, the season after the Mariners dealt Randy Johnson and Ken Griffey, Jr. to give Rodriguez the proverbial mantle as the team's superstar and foundation.

 

What the Rangers did by offering over a quarter of a billion dollars to a guy playing one of the most demanding positions in baseball was bank on the fact that Alex Rodriguez could change the entire perception of a team and transform the Rangers from a team with Texas as their prefix to THE Team of Texas.  And while Rodriguez was offensively great in Texas (200 hits and 50 home runs his first season, leading the league in home runs, RBIs and total bases his second, and winning his first MVP during his third year), the Rangers finished last in the West each year.  As exciting as A-Rod was offensively, the team sucked with him, and that record of losing made the Rangers decide he wasn't worth the investment.  And so, the New York Yankees, everyone's least favorite rich uncle, stepped in, picking up A-Rod and his enormous deal, aside from the $67 million Texas paid to send the shortstop/future third baseman away. And the Yankees, with their media deals and winning obsessed owner, would end up giving Rodriguez a new deal seven years later that eclipsed even that which A-Rod received from the Rangers, and would basically keep him in pinstripes past a point when anyone not named Julio Franco should still be playing baseball.

 

The interesting thing about Rodriguez is what happened to the teams he left. After watching the soon-to-be-deemed A-Fraud depart for Texas, the Mariners went on to win an American League record 116 games, thanks in large part to Ichiro's arrival, but also to an overall mindset change in a franchise that, after losing their three biggest stars in a three-year span, committed to team baseball and made the playoffs in consecutive years for the first (and only) time in the franchise history.  The Rangers, upon releasing the Alex albatross into the Hudson, won 18 more games than the previous season.  You would think losing a player deemed to be worthy of the largest contract in all of sports would hurt a team.  However, the Angels know from personal experience, this is not always the case.

 

The Angels have lost out on big free agents before.  The team has even saw players they thought would stay with the team move on for greener, dollar-wise, pastures.  However, Arte Moreno's purchase of the team has also accompanied some of the greatest free agent signings in team history, specifically Vlad Guerrero in 2004 and Albert Pujols prior to the 2012 season.  The Pujols signing in particular represents the Angels taking aim at being not just a team with Los Angeles now stuck on in front of their name, but becoming THE team of Los Angeles.  What better way to do that, then by signing a guy considered one of, if not the greatest hitter of his generation, and one of the few last great sluggers untainted by the brush of performance enhancers.  And after helping the Cardinals to the World Series during his last season in St. Louis, the Angels could find comfort in bringing a proven winner to their team.

 

Of course, Pujols' arrival, while exciting, delivered only three more wins than the previous year.  The Cardinals were not deterred by the departure of their greatest player since Stan Musial, making it to game 7 of the NLCS that season and returning to the World Series the following season. Obviously comparing the relative success of one team with another and basing it just on the juxtaposition of just one player is unfair, and not really that instructive.  However, two years into a deal that follows only the two A-Rod contracts as the largest in baseball history, the Angels no longer see Albert Pujols as the definitive face of the franchise, nor the guy who could remake the entire identity of the squad.  That mantle has passed to the fresh-faced kid from New Jersey, who could conceivably get a deal worth more than the 10 year Pujols contract and 5 year Josh Hamilton deal, combined.

 

So, is Mike Trout worth it?  If asked to do it again, would the Rangers pay $252 million for A-Rod, knowing they would end up paying just to trade him away after three years?  Would the Yankees have extended Rodriguez at $275 million on a deal they're now secretly hoping that steroid accusations and baseball suspensions will allow them to get out from under?  Would the Angels risk $240 million on a 32 year old who's consistency to that point was only setting them up for massive disappointment upon the first signs of injury?  The answer to all three is yes, because even if the results have shown that risk often outweighs reward, the success of the team, and a player's deal, can never be just directly tied to wins or losses.  Instead, in signing a Rodriguez, Pujols or Trout, teams are not simply banking on a leader to take them to a title, but instead a player to market and a legacy that becomes commodity.  The Rangers lost a lot of games, and money, on the Rodriguez deal, but the chance to sign a guy who might become THE GREATEST BASEBALL PLAYER OF ALL-TIME was too big to pass up.  It's the same reason why the Yankees worked to give a raise to that same player, and tied in bonuses related to the eventual breaking of records -- never a sure thing, but too much of a profitable opportunity to pass up.  In locking up Pujols for a decade, even knowing that the final years of that deal may be voided by retirement, the Angels were taking a stab in bringing in a sure-fire Hall of Famer who's future successes in the overall spectrum of baseball history would then be tied to the Angels brand.

 

The brand is why Mike Trout is now and, barring an injury or decision to retire from baseball and replace Paul Walker in the Fast and Furious 7, will continue to be worth an investment even exceeding $400 million.  There's no guarantee that any of Trout's future years will be as dynamic as his first two, but the potential is there that those future years could reach a level of greatness that even Pujols or Rodriguez never achieved.  More than that, Trout has the potential to be the type of player that clubs not only build around on the field, but off of it.  The Los Angeles Lakers giving an older and injured Kobe Bryant nearly $50 million for two years might not make a lot of sense in terms of finding the right places to get the team another title.  However, investing in the Kobe brand, and tying it eternally to the Lakers, will pay dividends far beyond any players' career.  

 

As of now, no player has decided to have the Angels cap on their Hall of Fame plaque.  When Pujols enters, even if the Angels win seven titles in the next eight years and Pujols breaks every record imaginable under the lights of The Big A, he will enter the Hall as a Cardinal.  Maybe Vlad Guerrero gets in and becomes the first marked Halo in the Hall.  Yet, even he doesn't capture the possibilities that Mike Trout embodies.  It's dangerous to make a large investment in any single player, particularly in a sport where one player's overall greatness cannot lift an entire team, unlike the way a dominant center in the NBA or game-changing quarterback in the NFL can.  However, in a day and age where media money is as important to a baseball team's structure and finances as a winning season, and a time where so many great players fell from their positions on high due to accusations of cutting corners to take a shot at revered numbers, Mike Trout, the entity and the player, represents hope, as much for the league as for the team.  

 

One team will make a ridiculous investment in him soon enough.  At some point during the length of that contract, people will question whether or not he was worth it.  Every losing season will raise questions of whether or not tying up so much money in one guy is prudent.  In the end though, potential and possibility trump prudence.  Somebody is going to pay a great deal to market and make money off that potential.  And even with all the downside and past lessons learned, I sure hope that team is the Angels.

[Chuck]

Good article, Joe!

 

Whatever it takes to keep our star and franchise player. I'm good with it!

[Mudville]

It would be business stupid to make that kind of investment into one player. The baseball economy cannot support all of these contracts that are based on over paying the last stupid contract made.

Even this article proves the highest paid players never really fullfill their end of the bargain by insuring anything for a team other than a massive payroll to try and manage around declining performance.

These mega meglomaniac contracts are probably the sure fire way to allow small market teams the economic balance they needto build a competitive roster while fool owners slam their teams into a salary cap on a few stars and then put Joe Blanton in their rotation.

Yes, I am pointing a finger at the Angels that have been both pound and penny foolish in the free agency market and now in a holding pattern with Trout's expected contract extension until next season when Vernon Wells comes off the books.

So in how many years after that do the Angels put off other extensions and lose players to free agency as they wait for Hamilton to dropoff the books? This leap frog doesn't end since there is 8 more seasons of Pujols and then what happens with the four hundred million dollar man? A center fielder with a weak arm that loses his range and becomes just an average left fielder has to hit better than Cabrerra to be in any MVP talk. And if Trout isn't in that talk it is a damn long time untill that 400 million is cleared for the next big thing.

Extend Trout. Pay him well. Don't be stupid.

Edited December 31, 2013 by Mudville

[Second Base]

At first, I was just going to breeze through this.  But I found this particular style of writing effective in hooking me as the reader, but also flowing nicely from idea to idea and conveying the proper sense of historical perspective that should come when considering Trout's future.  Well written, I recommend everyone who has 10 minutes to give it a read and ponder the deep questions it brings about, "would you spend 400 million on Trout knowing full-well that Pujols and A-Rod's contracts look like disasters?"

[Dave Saltzer]

Joe, this is a really good article. I don't think it will take that much money to lock up Trout for a decade. While Trout is poised to break every potential arbitration record, those years would be much cheaper. I'd bet the deal could be done for closer to $300 million (hey, it's only $100 million LESS!).

 

As for those who would argue against committing that much money to one player, two things:

 

1. Comparing the deal Trout would get versus the ones that Pujols and A-Rod got are different because Trout is so much younger (assuming we signed him to that deal this year) that we would be locking up his prime years.

 

2. Do we really want to go through another 50+ years arguing about how we failed to sign Trout just like we've spent the past 30 years cursing Bavasi for not signing Nolan Ryan?

 

The money is there to sign Trout, and we would be foolish not to do it.

[Brent Maguire]

Trout is younger than any of these guys, which makes the deal less likely to be an albatross. Trout probably won't get much better but you can expect this level of production for a good part of the contract. 

 

Signing him to a 10 year deal makes so much sense because then you get the option to either re sign him if he continues producing at a torrid pace or you let him walk if his production slips. 

 

I agree that they shouldn't throw a crazy figure at him. Offer 10 years 220 million and negotiate from there. 

[wopphil]

Joe, this is a really good article. I don't think it will take that much money to lock up Trout for a decade. While Trout is poised to break every potential arbitration record, those years would be much cheaper. I'd bet the deal could be done for closer to $300 million (hey, it's only $100 million LESS!).

 

As for those who would argue against committing that much money to one player, two things:

 

1. Comparing the deal Trout would get versus the ones that Pujols and A-Rod got are different because Trout is so much younger (assuming we signed him to that deal this year) that we would be locking up his prime years.

 

2. Do we really want to go through another 50+ years arguing about how we failed to sign Trout just like we've spent the past 30 years cursing Bavasi for not signing Nolan Ryan?

 

The money is there to sign Trout, and we would be foolish not to do it.

I agree, but I don't think it should take anywhere even close to $300.  If the team goes to Trout in April and says "we will give you $240 mil for the next 11-12 years of your career," I gotta believe he takes it.  That is just way too much money to walk away from. 

[stormngt]

I still say 300 million for 20 years with opt out after 10 years and have the contract front loaded. This saves us on the AAV

I agree, but I don't think it should take anywhere even close to $300. If the team goes to Trout in April and says "we will give you $240 mil for the next 11-12 years of your career," I gotta believe he takes it. That is just way too much money to walk away from.

[ukyah]

i'm not belittling the article or it's writer, but i don't bother reading anything that discusses a 400 million dollar contract. in my opinion, the discussion loses all credibility.

[Stradling]

Until of course there is a $400 million contract.

[Docwaukee]

Nice article.  However, there is a big reason why the Trout to Arod/Pujols comparison isn't quite apples to apples. 

 

Arod and Pujols created a brand elsewhere, and then someone else tried to use it as if it was their own. 

 

Trout provides not only great play on the field (and potentially for many years to come), but he provides an emotional connection for all halo fans because he is home grown. 

 

Albert provided that emotional connection to the Cardinals and their fans.  You can't transfer that part of it.  You can transfer the talent and the celebrity but  not the heart.  So while fans may initially flock to the turnstiles, the ultimate draw of that player is going to be tied to the team winning and not just their sheer presence. 

 

I liken keeping Trout to more of a Jeter, Ripken or Chipper comparison. 

 

The other thing about the monetary value of Trout is that 400mil is a projection.  He won't be a free agent for 4 years.  Yes, his arb numbers will break records, but they won't cost 40mil per year.  So signing Trout now to wipe out his arb (which is contingent on continued performance) as well as a few FA years provides the player with substantial security that he otherwise wouldn't get. 

 

One more thing.  If we are trying to compared on field value relative to a contract, then the Arod comp is actually somewhat similar. 

The Rangers actually got about what they paid for with AROD and thru 2011, the Yankees actually got a surplus (due to the money the Rangers sent).  Arod's WAR value from when he signed in 2001 thru 2011 was pretty much a net positive.  In other words, the first contract was for 10 years and he provided about 11 years of appropriate value.  He signed that initial contract for his 25yo season. 

 

If we lock up Trout for 2015-2024 it will be his age 23-32yo seasons.  Even if it's for 300mil, he'll need about 45 WAR over 10 years to make the contract worth on field production from a value standpoint.  This doesn't count marketing.  He's put up 20 WAR in two years.  I think he can avg. 4.5 WAR over the next ten thru the prime of his career.   

 

Arod also made 22mil of the 2001 Rangers 90mil payroll.  Or  24%.  In 2001, the cost of 1 win was about 2.5mil.  So they had 27.2 wins worth of payroll left

 

If Trout makes 30mil per on a team with 170mil in payroll or 17%.  At 7mil per win currently, that would give them 20 wins worth of payroll left. 

 

The question becomes, what portion of his salary gets offset by his brand value to the team?  10mil per year?  Who knows. 

 

So instead of putting all their eggs in one basket, they are putting one egg in their basket.  Let's hope that egg doesn't break because even with the risks, I'm all for it.

[Troll Daddy]

I would buyout is arbitration years first to save money. Then I would wait at least two more years before offering him a long term mega contract deal.

 

No is no telling what's going through his agents head or Mike Trout with all this 400 million talk in the news.

[Angel Oracle]

A-Fraud's 10 years/$275 million is currently the record deal.

$400 million, even for a once in a generation player, does seem extreme in comparison.

I still think Trout would sign for 8 years/$180-200 million for 2015-2022. He likely wants to know that he can play the field of bidders again at age 31. Plus if he is starting to decline, like Pujols started to at age 31 in 2011, the Halos have the option of exercising the 1 year offer to get the draft pick (ala the Cards and Wacha).

[Jeff Fletcher]

There's a big difference between contracts that free agents get and extensions.

Only one team negotiates an extension.