With the news that the Dodgers have agreed to a seven-year, $215-million extension with Clayton Kershaw, Angels fans are certainly wondering what that means for Mike Trout. If Kershaw is worth $30 million a year, what is an everyday player like Trout worth?
Here’s my handy dandy little chart of the largest extensions in major league history, in terms of total value.
First, an extension is very different than a free agent deal because a player can only negotiate with one team. The only leverage a player has is to say “No thanks. I’ll wait till I’m a free agent.” And the longer he has to wait, the more risk he faces.
Kershaw was just one year from free agency, meaning he had relatively little risk in waiting till the end of the season, so the Dodgers had to pay him close to his free agent value.
Of all the 24 extensions you see above, in only two of those did the player sign with at least three years to go before free agency. One was Albert Pujols (7/$100M) and the other was Buster Posey (8/$159M).
The Angels, who so far have had no substantive talks with Trout, would most likely want to try to get Trout signed sometime during the 2014 season. (If it’s after opening day, it doesn’t count against the luxury tax for 2014.) If they sign him then, he would be more than three years from free agency. Trout is not eligible for free agency until after the 2017 season. That would make it the earliest nine-figure extension, in relation to free agency, in history.
That time could buy the Angels a lot of leverage.
If they offer Trout, hypotethically, a nine-year, $200-million deal this April, that would be an AAV of $22.2 million, which would be more than the $19.875M AAV that Posey got when he was still three years from free agency.
Sure, Trout could turn it down and wait. But every year he waits involves some risk. What if he gets hurt? What if the new collective bargaining agreement in 2016 changes the economics of the game?
I don’t know what’s going to happen, and neither do the Angels. The only person who has an idea is Trout.
It comes down to how much risk Trout is willing to accept in terms of costing himself future earnings, in exchange for $200 million worth of security. Bear in mind that Trout is still just 22. If he stays healthy and does lose some value in this contract, he’s going to get another shot to make it up in his next deal.
So the guess here is that, despite Kershaw’s record deal Wednesday, Trout ends up with a lower AAV on his deal, because he’s going to get his earlier.
