I have talked to friends about Mike Trout’s six-year, $144.5 million deal, and the general consensus seems to be that Trout accepted a lowball deal. It’s understandably difficult to not feel that way given all the talk about mega-deals consisting of $35 million to as much as $50 million a year, and then watching Trout settle for only (“only”) just over $24 million per year.
However, had Trout not reached a long-term agreement with the Angels, he would have remained cost-controlled through 2017. He would have cashed in on record-breaking salaries in arbitration, but the average annual value (AAV) of his contract over the next six years would probably be lower than what he will make. Take, for example, a situation where Trout waits patiently through his team-controlled years and strikes a 10-year, $400 million contract with a team.
2014: $1 million
2015: $15 million*
2016: $17.5 million*
2017: $20 million*
2018: $40 million**
2019: $40 million**
*settled in arbitration
**annual average value (AAV)
… totaling $133.5 million over six years, ignoring the time value of money. Even if Trout pulled larger sums in arbitration, it may not add up to what he is guaranteed to make under his new contract.
Time to get philosophical, now: Nothing in life is guaranteed, and it would be haphazard to assume Trout may not suffer a career-ending or some other debilitating injury that threatens his livelihood. Taking a shorter, less lucrative contract now guarantees financial security for six years, regardless of what happens, and it doesn’t cost him a lot, if anything.
Moreover, his walk year comes during his age-27 season; he will reenter free agency with, I assume, his brightest years still in front of him. Thus, he will likely still command a 10-year mega-deal with a team — and even that will be less worrisome than most other deals, considering he is one of Major League Baseball’s greatest all-time talents and that deal will expire after his age-37 season, limiting the risk of a late-career decline for whichever team signs him.
It also makes sense for the Angels, given the window of contention is now, and this is the cheapest anyone will ever be able to own Trout for the rest of his career — well, except for those arbitration years they could have had. But who knows what an arbitrator may declare a sufficient salary for Trout the Magnificent.
Not only do Trout and the Angels win, but so do future teams contending for Trout’s hand in marriage in 2018 as well.