Randy Levine's Mike Trout comment a reminder of Trout's coming payday
Major League Baseball is investigating Yankees team president Randy Levine for possible tampering stemming from a comment he made at Jacoby Ellsbury's introductory press conference on Friday regarding the 31-year-old Robinson Cano's departure and the wisdom of giving out ten-year contracts.
“If Mike Trout was here," Levine said, "I would recommend a 10-year contract. But for people over 30, I don’t believe it makes sense. I don’t think [principal owner] Hal [Steinbrenner] thinks it makes sense. We were very clear about that.”
The tampering charge strikes me as ludicrous, but Levine's comment nonetheless served as a reminder that Trout's days as a multi-millionaire will soon be upon him. The 2014 season will be Trout's last prior to arbitration, and as a perennial MVP candidate, he could set records in arbitration if the Angels don't try to extend him first.
Signing Trout to an extension before he hits arbitration next winter would seem like a no-brainer for the Angels, but it won't be that easy. From Trout's perspective, there's very little incentive to sign now. Trout, if you can believe it, is nine years younger than Cano and will become a free agent in November 2017, just two months after his 26th birthday. A ten-year contract at that point would only take him through is age-35 season, making it a solid investment for any team akin to the ten-year, $189 million deal the Yankees signed Derek Jeter to in 2001 covering his age-27 to -36 seasons, or, even more fittingly, the ten-year, $252 million deal Alex Rodriguez signed with the Texas Rangers the same offseason covering his age-25 to -34 seasons.
Rodriguez's deal was a record-setter at the time and has since been surpassed only by the subsequent ten-year deal Rodriguez signed after opting out of his first contract in 2007 (a deal covering his age-32 to -41 seasons that the Yankees clearly regret and was likely the basis for Levine's comments about Cano and Trout). If Trout, like Cano, reaches free agency without signing an extension, he could be the most valuable free agent to hit the market since Rodriguez.
Extensions have become the industry standard for young stars because of teams' understanding that signing players to market-price contracts that pay them peak-age salaries into their late thirties is bad business. The trade-off for the players is security against injury or performance collapse in advance of their free agent eligibility. Typically, the earlier a player is signed, the more leverage the team has to suppress his salary. The most extreme examples of that thus far have been the Rays' initial extensions for Evan Longoria — $17.5 million over six years plus three club options — and Matt Moore — $14 million over five years plus three club options -- both signed before either player had played a full month in the majors. Trout is as likely as any player to suffer a performance-altering injury, but his incentive to resist an extension is greater than any other player of the free-agent era.
If Trout's next four seasons are roughly as good as his last two (and, given that he's only 22, he could actually get better), what would he be worth on the open market after the 2017 season? The mind boggles. Surely, he'd surpass Rodriguez's record $275 million post-opt-out deal, and the benchmarks of $300 million in total value (and thus a $30 million average annual value) would seem likely to fall as well, particularly given the influx of money into the game in recent years. Given that kind of potential payday, what could the Angels offer Trout in the interim that would make it worth his while to push back his free agent eligibility?
The richest extension in major league history is the ten-year, $225 million deal the Reds gave to Joey Votto, but that deal, signed in April 2012, doesn't kick in until next season, so it was less an extension than a preemptive free agent signing given Votto would have hit free agency this winter (as a result, it covers Votto's age-30 to -39 seasons, Levine wouldn't approve). Joe Mauer's $184 million extension with the Twins, which was signed in March 2010 but didn't kick in until 2011, had identical timing and covers Mauer's age-28 to -37 seasons (better, but when Mauer signed he was a catcher, so not really).
As far as an extension that actually covered both pre- and post-free agency seasons, the richest in the game's history is Buster Posey's nine-year, $167 million extension with the Giants which was signed last March and covers all three of his arbitration years plus his first six years after his scheduled free agency. Given Trout's potential to pull down a contract worth close to twice that amount as a free agent, I can't imagine Trout signing a similar extension.
Most likely, the Angels would have to offer Trout more than $200 million just to start the conversation about an extension. Giving Trout Cano's $240 million over ten years now, a contract that would expire after Trout's age-31 season, would be a masterstroke for the Angels. Unfortunately, they already gave that contract to Albert Pujols prior to his age-32 season and have eight years left on it. The reality of the situation is the Angels would likely have an easier time affording the free-agent Trout on the open market after the 2017 season — at which point their contracts with Jered Weaver, C.J. Wilson, and Josh Hamilton, which owe those three players a combined $70 million in 2016 and Hamilton alone $30 million in 2017, will have expired — than they would signing him to an extension prior to that. Fortunately for the Angels, a ten-year deal for Trout at that point would still make good sense. Unfortunately for the Angels, it would also make sense to the Yankees.