Gennaro: Opening Day, Mike Trout and 2014 expectations

From SABR President Vince Gennaro at Diamond Dollars on March 31, 2014:

Happy (full) Opening Day. First a comment on the Mike Trout contract, also known as the “perfect deal” for both sides. The Angels and Mike Trout nailed it. Six years at $144.5 million is the dream scenario for both sides. The length and terms of the deal are optimal. For those who think the deal should be longer, I would argue that each of the next two years would be priced at $40 million per year, a price that the Angels were well advised to avoid.

The reason the Angels could get Trout to agree to a deal at this relatively modest commitment is because they are giving him the opportunity (actually gift) of re-pricing himself at the young age of 29. For a player of Trout’s caliber (or at least what most people expect Trout to be), hitting the free agent market at 29 vs. say 31 years old, could be worth $100 million or more to Trout. I’m not suggesting he will necessarily get $50 million per year, but he is much more likely to get a longer term deal as a 29-year old versus as a 31-year old.

In the end, the Angels maximize the return on their investment by keeping it to six years. Yes, Trout may walk after this contract ends and some may argue that the Angels lost the opportunity to make him a lifelong Angel. I would argue that the price of doing so would not be worth the risk.

Read the full article here:

Originally published: March 31, 2014. Last Updated: March 31, 2014.