Mike Trout: Should the Angels Offer Him an Extension Now?

Mike Trout is the best player in baseball, but, in 2013, the Angels paid Mike Trout like he was nothing more than a second-year player. The Angels can do the same thing in 2014, if they choose to. But Trout’s historic start suggests that the Angels would be wise to lock him up long term, sooner rather than later. The 22-year-old could command A-Rod money if he stays healthy and reaches the open market, but he’s four full seasons away from that point, and the risk of catastrophic injury gives him some incentive to sell some of his earning potential for immediate, long-term security. In a vacuum, he’s surely worth a ten-year, $200M pact, but the Angels’ financial situation complicates things, right? Well, sort of.

With the luxury tax threshold hovering around $189M, there’s been some chatter that the Angels will need to tread the free agent market lightly if they hope to lock up Trout long term. Since the luxury tax threshold best not exceed the average annual value (AAV) of a team’s contracts, the Halos’ back-loaded deals with Albert Pujols, Josh Hamilton, C.J. Wilson, and Jered Weaver are going to count very differently as they near expiration. In 2014, the Angels’ AAVs already come out to $126M, and this figure only accounts for nine players, meaning the Angels have roughly $63M to allocate towards 16 roster spots.

Year :                      2014             2015             2016      2017
AAV :                     125.925     116.191667         106          58
Contracts :               9                     7                  5             2

In 2013, the 30 MLB clubs spent an average of $2.37M on 3.75 arbitration-eligible players, or roughly $9M. There are some large fluctuations in this figure—Houston and Seattle didn’t spend a dime on these players, while San Diego spent just under $20M. But if we assumed that the Angels will spend about $9M annually to maintain this core of players every year, the club would have about 12 roster spots to fill in 2014, presumably at league minimum. Here’s how things would shake out if the Angels met these assumptions over the next four years:

2014: $140.815

2015:  $132.061667

2016: $122.85

2017:  $76.32

This would give the Halos the wiggle room to allocate another $15M to free agents in 2014, if they extended Trout to a deal worth $30M per season right now. Since Trout doesn’t have the leverage for that kind of deal, the Angels could easily buy out Trout’s arbitration years and several of his free agent years at a significantly lower price tag. Even if the Angels end up at the high end of the spectrum for money owed to arbitration eligible players, there’s still going to be plenty of distance between the luxury tax threshold and the club’s AAVs for the next few years.

So, with all of this in mind, and the rumors that the Angels have been willing to part with Peter Bourjos, Mark Trumbo, and/or Howie Kendrick in pursuit of young, controllable pitching, the Halos’ off-season strategy seems sort of predictable. The Halos are in search of players’ whose price tags will remain constant over the next few seasons to afford them a significant cushion from the tax threshold. It’s entirely possible that the club could extend Trout and pursue an elite free agent this winter.

The talk about the Angels playing their cards with Trout carefully only really makes sense if the team is planning on making a splash in the free agent market.

Featured Image courtesy of http://www.gammonsdaily.com

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