Angels act in good faith with Trout contract
$1 million deal could aid team's pursuit of long-term agreement with slugger
Figuring out how much free agents are worth is relatively simple. The market decides. Figuring out how much arbitration-eligible players are worth is relatively simple. If there's a dispute, a third party decides. Figuring out how much younger players who put up huge numbers at the very outset of their careers are worth, however, can be daunting.
In March 1987, Joe Carter walked out of Indians camp after the team exercised its right to renew his contract at $250,000. Carter was a few days short of being able to go to arbitration, and he was asking for $380,000 after leading the Major Leagues with 121 RBIs the season before. "Joe Carter is certainly going to earn millions of dollars in his career," then-general manager Dan O'Brien said at the time, adding that Carter just wouldn't get those millions in 1987. And he was right.
Angels outfielder Mike Trout, who finished second in the American League MVP Award voting in each of his first two seasons in the big leagues, is also going to earn millions of dollars in his career. In the meantime, he agreed on Wednesday to a one-year, $1 million contract. That's a record for a pre-arbitration player.
Nationals right-hander Stephen Strasburg made $3 million in his third year, but that was part of the original big league contract he signed coming out of college in 2009. The team never needed to negotiate a salary with him before he could go to arbitration.
The most remarkable part about Trout's bar-raising deal, though, was the ho-hum reaction from across baseball Thursday.
"He's certainly shown the value; I'm not sure what the big issue is," said Orioles executive vice president of baseball operations Dan Duquette.
"I don't think it has any type of profound effect on the salary structure," said Phillies special consultant of baseball operations Ed Wade, who has extensive experience in contract negotiations and preparing arbitration cases.
Let's concede this up front: Getting Trout for a million bucks this season is a bargain for the Angels. That is far below what he projects to contribute to the team if he stays healthy and performs at the level of which he is capable.
Service time trumps nearly all else when it comes to determining the salaries of players. But Trout has two years and change, short of the arbitration threshold, and is creating a new frontier for players with his level of experience.
And it could prove to be a good deal for both the 22-year-old Trout and the Halos.
There had been reports that Trout's representatives and the Angels had been discussing a six-year, $150 million deal. That could still happen. In fact, getting this piece of the puzzle in place probably increases the odds of completing a lucrative extension. Timing is the key, and there were at least two factors to consider.
Teams have the right to renew any unsigned players March 2-11; the Halos did that on the first day they could last year. Trout stayed in camp, but he was unhappy at being paid $510,000, just $20,000 above that year's Major League minimum.
"I don't think it was absolutely necessary to do something before [March 2], but everybody likes to have that part of it behind them and be able to focus on the field," said Phillies assistant general manager Scott Proefrock, who handles the team's contract negotiations. "So that does clear the decks, so to speak."
Agent Rob Plummer, who is with Relativity Sports/SFX Baseball Group, has been paying close attention to negotiations involving both Trout and the Nationals' Bryce Harper. He represents Twins up-and-comer -- and MLB.com's No. 4 overall prospect -- Miguel Sano, who, he believes, could face a similar situation in a couple of years.
"This deal is the team saying, 'We want to take care of you. We want you with the Angels. We're going to negotiate with you in good faith and work this out,'" Plummer said. "It shows that they think he's the best player in baseball and want him to be happy."
As the thinking goes, a happy player should be more inclined toward a long-term commitment.
"I'm sure the Angels had reason to believe that doing that particular deal created an environment where possibly they might get something done down the road from the standpoint of their discussions on an extension," Wade said.
Finalizing the one-year contract also has implications on the Halos' luxury tax. The average annual value of a longer agreement would have affected this year's assessment. As long as the terms of the 2014 contract don't change, an extension would not affect the team's tax liability until 2015.
"That's just working within the rules to avoid paying a tax when you don't necessarily have to," Proefrock said.
Stressing that he had no inside knowledge of what the Angels hoped to accomplish, Proefrock added: "They're butting up against the Competitive Balance Tax. This may give them more room to maneuver, especially if the [average annual value] is what's been reported. They certainly need to find a way to manage that."
If a team waits too long to sign a budding superstar, the price tag can rapidly escalate. If a player holds out too long, he risks slumps or career-threatening injuries. Once a megadeal is done, of course, all the risk shifts to the club. What makes this case unique is that Trout could sign on for six more years and still become a free agent before he is 30.
John Hart became general manager of the Indians five years after the Carter episode, and Cleveland became the first team to routinely lock up talented young players to multiyear contracts in players like Sandy Alomar Jr., Omar Vizquel, Jim Thome, Albert Belle and Manny Ramirez.
"The clubs benefited from the standpoint of some cost certainty, and the younger players benefited from the standpoint of security," Wade said. "And when you stop to look at some of the players who were involved and where their careers went, it certainly served everybody's purposes."
The understanding was that there was a trade-off, with the player accepting the possibility of being paid less than full-market value in a given year in return for future financial security. That is less true today, though, as players seek to project where salaries will head years from now as Trout-like talents continue to emerge.
Trout's next contract will make even bigger headlines than his current one. But it is a pretty good bet that any record it sets will not last forever.
"The Angels have to do what's right for them, and if that's what it takes to keep that talent on the club, then so be it; that's a decision every organization has to make," Proefrock said. "From the standpoint of recognizing him as the elite player in the game, I think that's where it's headed. But there will be another elite player to come along behind him."
Paul Hagen is a reporter for MLB.com. This story was not subject to the approval of Major League Baseball or its clubs.