Contract Forecast: Mike Trout

Contract Forecast: Mike Trout
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Contract Forecast: Mike Trout

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According to the Los Angeles Times, the Angels have begun discussions to extend their young star outfielder Mike Trout through the foreseeable future. While this may not come as a surprise to most, at just 22 years of age the Angels still hold him under "team control" through the 2017 season (he's arbitration-eligible starting in 2015). This means that technically speaking, the Angels could work 1 year contracts at a premium price for the next 4 seasons, as teams often do during a player's early years.

But the reality with Trout is that he's no ordinary 22 year old. He lived up to a great deal of hype in 2012 (.326, 30 HR, 83 RBI, 49 SB), and returned with much of the same in his 2013 campaign (.323, 27 HR, 97 RBI, 33 SB). Combine this with an average WAR (Wins Above Replacement) rating of 10.1, and the numbers not only look good on paper - but they're translating to value and wins in Los Angeles. Thus the Angels are faced with a decision to act now with their young star's long-term finances, in order to stop the bleeding. Every year Trout nears free agency appears to be adding dollars to his potential annual average.

With that being said, our Spotrac MLB Premium team will assess the current statistical production of Trout in comparison to other multi-tool superstars in order to forecast the potential dollars that may be available for his upcoming contract extension in Los Angeles.

Comparable Players
The only position player who signed a "maximum contract" while under team control in recent years is San Francisco Giants catcher Buster Posey. While statistically he may not hold up to the other athletes included, his value to the franchise is comparable. We'll assess the average of these five contracts, then provide a linear regression on both lengths and values to result in our base prediction numbers.
Player Length Value Avg. Salary Age When Signed
Matt Kemp 8 $160,000,000 $20,000,000 26
Albert Pujols 10 $240,000,000 $24,000,000 31
Robinson Cano 10 $240,000,000 $24,000,000 31
Josh Hamilton 5 $125,000,000 $25,000,000 31
Buster Posey 9 $167,000,000 $18,555,556 25
Averages 8.4 $186,400,000 $22,190,476 28.8

Note: A linear regression is a formula that plots the provided points of data for Length and Value of the contracts, and then generates the best-fit line for those points, resulting in a "slope" value that translates to an average annual salary.

View the list of Top Average Paid Players in MLB

Once a linear regression is performed on these new numbers we're given the following terms to begin with:

Length Value Avg. Salary (slope)
9 $199,654,054 $22,183,784
Statistical Analyzations, Prime Percentage
Now let's analyze these players statistically in the two years prior to signing their second contract by showing Games, Runs, Hits, Homeruns, RBIs, Stolen Bases, Batting Average, On-Base+Slugging, and Wins Above Replacement.
Player G R H HR RBI SB BA OPS WAR
Matt Kemp (2010-11, LAD) 162 98 172 34 108 30 0.287 0.873 3.5
Albert Pujols (2010-11, STL) 153 110 178 34 108 12 0.305 0.959 6.5
Robinson Cano (2012-13, NYY) 160 93 193 30 100 5 0.313 0.914 8.1
Josh Hamilton (2011-12, TEX) 134 92 152 34 111 8 0.291 0.908 4.5
Buster Posey (2011-12, SF) 96 48 112 14 62 2 0.324 0.910 4.4
Averages 141 88.2 161.4 29.2 97.8 11.4 0.304 0.9128 5.4
Mike Trout (2012-13, LAA) 148 119 186 28 90 41 0.324 0.976 10.1
% Difference 4.96% 34.92% 15.24% -4.11% -7.98% 259.65% 6.58% 6.92% 87.04%
Median Prime: 6.92%
Average Prime: 44.80%
Our results show what many of the experts are already noting; at the age of 22, Mike Trout is already far ahead of where these current superstars are as experienced veterans. We'll utilize both the Median and Average prime percentages into our base figures to populate a range of forecasts.
Results

Length of the Contract
Often times baseball contracts are developed around two factors: Age Milestones, and recently signed deals. At 22 years old, an 8 year deal for Mike Trout would bring him to the age of 30 - a great age to cash in big yet again. It's likely that the Angels will push for at least 1 more year in this contract, most likely the full 10 years to match recent signings from Pujols and Cano. For our purposes we'll split the difference and project a 9 year contract for Trout.


Value of the Contract
Trout is the Clayton Kershaw of position players in that he rose to top of his game immediately, forcing the hand of his team to throw big dollars into the pot very early. The sky is truly the limit with this contract. It's perfectly within reason for Trout's camp to come to the table with Alex Rodriguez's 10 year $275 million contract as the starting point. The Angels have over $650 million in contracts on their current payroll, so breaking the bank right now isn't exactly a small task for the organization. In light of this, we'll offer two projections:

Low Value (Hometown Discount)
Utilizing our Median Prime Percentage (6.92%), we're provided with an EXTREMELY fair value in terms of overall dollars and annual average:
9 years, $213,470,115 | $23,718,902 per year
High Value
Utilizing our Average Prime Percentage (44.8%), we're provided with the largest contract in NFL cornerback history in terms of overall dollars and annual average:
9 years, $289,099,070 | $32,122,119 per year


We'll split the difference to offer the best-value forecast for Trout's upcoming extension.
Spotrac's Prediction: 9 years, $251,284,592

  •  Average annual salary: $27,920,510




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