Posted February 24, 2014

Mike Trout: What is he really worth?

Los Angeles Angels of Anaheim, Mike Trout, What's he really worth?
Through his first two seasons with the Angels, Mike Trout has already produced over 20 WAR. (Jeff Gross/Getty Images)

Through his first two seasons with the Angels, Mike Trout has already produced over 20 WAR. (Jeff Gross/Getty Images)

While the Braves have led the way in making headlines via the long-term extensions they’ve hammered out with their top young players, the industry’s biggest potential extension of them all is looming. According to Mike DiGiovanna of the Los Angeles Times, the Angels are reportedly in discussions with Mike Trout involving a contract in the range of six years and $150 million. The scary thing is that he’s probably worth far more than that.

In his first two full major-league seasons, Trout has more or less broken the scale by which we evaluate the performance of young players. After hitting .326/.399/.564 with 30 homers and 49 steals en route to a staggering 10.9 Wins Above Replacement in 2012 (Baseball-Reference.com version), he followed up by batting .323/.432/.557 with 27 homers and 33 steals in 2013, a performance worth 9.2 WAR. His decline in value rests entirely on the estimates of his glovework; via Defensive Runs Saved, he dipped from 21 runs above average in 2012 to nine runs below in 2013, though via Ultimate Zone Rating, the drop was more gentle, from 13.3 to 4.4. Using those latter figures, FanGraphs’ version of WAR shows him with seasons of 10.0 and 10.4 WAR.

No matter which model you use, that’s two monster years under the belt of player who turned 22 last August. Using B-Ref’s WAR model, Trout’s 20.8 WAR through his age-21 season is the highest for any position player in history, outdoing Mel Ott’s 17.9 and Ty Cobb’s 15.7. His 10.9 was a record for a 20-year-old, while his 9.2 as a 21-year-old trailed only Rogers Hornsby’s 9.9-WAR 1917 season among players of that age. In both years, his WAR led the majors, an accomplishment that nonetheless went unrewarded by AL MVP voters, who gave the award to Tigers slugger Miguel Cabrera in both seasons.

Though Trout is still a year away from arbitration eligibility, he’s about to get rewarded anyway, if only because the Angels have to lock in some cost certainty. When that happens, it will almost certainly bust the standard set for players with less than three years of service time, a mark held by Buster Posey’s eight-year, $167 million extension ($18.56 million average annual value). Because of the way contracts that buy out arbitration years tend to escalate, it may well set a record for single-season salary during what would be his free-agent years (the last two of a six-year deal), topping the $30 million or even $33 million that Clayton Kershaw is set to earn at various points during the seven-year, $215 million contract he signed in January.

To get a better idea of what Trout could be worth, we can dust off the model I used in connection with the winter’s top free agents such as Robinson Cano, Jacoby Ellsbury and Shin-Soo Choo, one incorporating past performance, a projection of future performance, the market cost of a marginal win, inflation and aging, building on the top research done in those areas. As I noted in that series, rather than pin a single value to a player, the goal was to show how changes in our assumptions with regards to any of those parameters can affect an estimate of worth, thus producing a range that may or may not be in line with the rumors floating around.

Because his 2011 debut season consisted of only 40 games and 135 plate appearances, Trout doesn’t have a long enough track record to use a weighted three-year sample to create a baseline projection for 2015 as I did for those aforementioned free agents. So we’ll have to fudge it. If I use 2.0 WAR for that age 19 season, suggesting that he would have been a more or less league-average player, a 5/4/3 weighting — as used by Tom Tango in his deliberately rudimentary Marcel projection system (so simple even a monkey could calculate it) — produces a 2015 estimate of 8.0 WAR.

For a free-agent hitter in his late 20s or early 30s, I would take that baseline estimate and project annual declines of around three to five runs per year going forward. The crazy thing in this case, however, is that Trout’s age suggests he can still improve. The research Jeff Zimmerman did at FanGraphs shows that great players in their early 20s tend to improve by about five runs per year until about age 25, then maintain that level through about age 29 before beginning a gradual decline. If we start with that 8.0 WAR baseline, that would push Trout back up to 8.5 WAR for 2015, 9.0 for 2016 and 9.5 for 2017, his age-25 season — mind-boggling values in this case.

For the sake of modeling, let’s stick with that 9.5 WAR plateau. For the value of a win, I’ll use Dan Szymborski’s estimate of $5.45 million based upon this year’s free-agent market, and I’ll assume 3.3 percent annual inflation — the increase of that figure from the $5.276 million per win I pulled from Russell Carlton’s research in that series. Hold onto your hats:

Year  Age  WAR  Market $/W Prod $M
2014 22 8.0 5.45 $43.6M
2015 23 8.5 5.63 $47.9M
2016 24 9.0 5.82 $52.3M
2017 25 9.5 6.01 $57.1M
2018 26 9.5 6.21 $59.0M
2019 27 9.5 6.41 $60.9M
Total   54.0   $320.7M

Even if he dips to 8.0 WAR in 2014, the free agent market value of Trout’s performance figures to be worth more than $43 million, and to climb upwards above $60 million. For the six years in question, that adds up to 54.0 WAR and $320.7 million worth of performance, all for the very reasonable average price of $5.94 million per win.

Before I begin chipping away at those breathtaking values, it’s worth noting that arbitration-eligible players don’t make anything near full value for their services; those team-controlled years come at a considerable discount. The most commonly cited model, which dates back to research done a few years ago by Tango is the 40/60/80 rule: first-year arbitration eligibles earn about 40 percent of what a comparable free agent would earn, with second-year eligibles jumping to 60 percent and third-year eligibles to 80 percent. Standard-setting players such as Kershaw and Trout are the ones who tend to break the 40/60/80 rule, but as a framework, it will do here.

That rule doesn’t affect the actual expectations for Trout’s production, but it does affect what he can reasonably be expected to receive for his services before he reaches free agency. If we discount the first three years of Trout’s production at those rates, the estimates become $17.4 million for 2014, $28.7 million for 2015 and $41.9 million for 2016, lowering the total valuation to $265 million, and the cost per win to $4.89 million.

That model projects Trout to produce 74.8 WAR through his age-27 season, which again would be a record. Historically speaking, the highest WAR figures through that age have been set by Cobb (68.8) and Mickey Mantle (67.4). In light of that, it’s probably worth tamping down the projection above so that it falls in line. If I simply pencil in a flat 8.0 WAR per year from 2014-19, Trout’s WAR through age-27 ties Cobb’s at 68.8. The full market value of that production drops from $320.7 million to $284.2 million, while the arbitration-year discounts bump that down to $230.7 million.

As you can see, there’s quite a wide gulf between the $150 million figure that DiGiovanna is reporting and the $230 million produced by my model. If I work backward to reach a discounted value of $150 million while maintaining my other assumptions regarding inflation, the cost of a win and the compensation ratio for arbitration years, the implication is that Trout would average 5.2 WAR per year for the six years in question. Changing the inflation estimate back to the more commonly cited five percent, which I generally stuck with in my free agent models, lowers the presumed average WAR per year for the 2014-19 period to 4.95; either way, that’s around half of Trout’s actual value in each of his first two full seasons.

All of which is to suggest that if a long-term deal with the Angels comes about in the near future, whatever figure Trout and agent Craig Landis agree to is almost certainly underselling him based on his brief but astronomical track record; perhaps Landis should be asking the franchise for chunks of California real estate or intellectual property rights to Disney characters.

Kidding aside, whatever figure Trout and the team arrive at — if they do actually find agreement — will set a record for a pre-arbitration player. If it exceeds $25 million per year in average annual value, it will trail only Kershaw’s $30.7 million AAV among pre-free-agent players. Barring another extension, it would send Trout back into the free-agent market in the winter of 2019-20, shortly after his 28th birthday, giving him the opportunity for an even more eye-popping payday.

62 comments
ShockAbsorber
ShockAbsorber

So, after two and a third seasons, we are to assume Mike Trout's production and value for the following six seasons will be unquestionably equal or greater than Ty Cobb and Mickey Mantle?

When does this presumption ever work out well?

John4
John4

Trout should NOT sign a 6 year extension.  He should sign a 4 year extension.  The value for the 4 year extension should be around $110 - $120 Million.  Note that when Trout finally DOES become a free agent, he should sign a contract for 10 years and about $350 Million.  Probably more, like $375 - $390 Million.  There is NO reason in the world for Trout to sign a 6 year contract now.  He is giving the Angels too many years at too much of a discount if he does.

OK
OK

Reading this VoRP Addict, one understands why the derivatives market tanked and nearly crashed the entire world's economy.

Sneeral
Sneeral

I love Mike Trout. He's really talented, he hustles and he's exciting to watch on the field. But can we wait a few years before we crown him the best baseball player of all-time? Mickey Mantle is my all-time favorite, and as noted, his WAR rank was the second highest ever at one stage of his career. And once more ,let me express my dislike of WAR. It's a nice measure of general value but it's far from the exact science guys like Jaffe portray it to be. Cabrera was my MVP the past 2 years. And I'd probably take Albert Pujols  first two seasons ahead of Trout's. Call me old-fashioned. Comparable slash stats, more homeruns & RBI's, fewer strikeouts.  And his third year was a real monster, leading the league in hits, avg, doubles,runs scored along with 43 HR and 124 RBI. But his year 4, 5, 6, 7, 8 & 9 were also historic. Not to take anything away from Trout but he's not God. Let the man compile a real track record. Aren't the sabrematricians always cautioning about the risk of small sample sizes?

jb22
jb22

He's worth even more than calculated here really, $5.45M/war is low.

ineedataxi
ineedataxi

Funny how most big league players don't care for all the stats geek nonsense

oasis1994
oasis1994

This is unreal. The common person, and person with a family will not longer be able to go to a game soon. Not even counting what it costs for a ticket and inside the game, you have to factor in gas, maybe tolls and parking. That is way too much money to attend more than one game a year. Factor in players trying to "out do" one another now in terms of the money they make annually; there needs to be a salary cap in baseball. How is one player worth this much? With all that money you can sign 3 - 4 other players that can help the team.


Players are going to price people out of being able to go to games and really, how much is enough?


Thank you for ruining the game and not caring about winning anymore. If Cano really wanted to win, he would have signed with the Yankees because the Mariners are not going anywhere. That is why I loved Bernie Williams, Posada, Rivera and  love Jeter. They played/play to win and that is why they won so many World Series. Yes, the Yankees spent money, but they all stayed with their team and wanted to win. They NEVER said their contract was on their mind and allowed that to ruin an entire season.


When I hear a player say their contract was on their mind I want to vomit. You are going to makes millions no matter what and this is affecting you? The average person lives day to day and is on a day to day contact; that is really worrying.


I love baseball, but I am close to hating the sport, which is sad. 

JcHc3in1
JcHc3in1

For those with hurt feelings claiming "snobbery" or whatever else, you do realize that practically every single team, and all the successful ones, have an analytics staff to study these numbers and evaluate players and contracts? Your methods, based on stats from the 1800's, is clearly outdated.

BG4
BG4

You used 40/60/80 for years 2014-2016, but shouldn't it be for 2015-2017 since those will be his arb years?  I'm assuming the 6/$150 figure being tossed around would count 2014 - which is locked in around $500K.  Changes the math a bit.



Heffomite
Heffomite

The other amazing thing about the Trout contract situation relates to his age. Let's say he takes a (below market value) extension, like the 6 year $150M one being rumored. He will still be a free agent at, what, 26? Most players don't reach the majors til they are into their mid-20's so they don't hit free agency until around 30, when they might already be in decline. Trout will hit free agency when he is likely just about to ENTER his peak years. Wait til 2019 when he signs an 8 year 400M contract.

PRM
PRM

Based on your estimates, Trout's first 9+ years through 2020 would see him accumulate WAR at a rate that would place him in the top 50 of all time (Chipper Jones is #50 at 85.2).  Generally, a Hall of Fame Hitter must accumulate traditional statistics (Hits/BA/HR/RBI) for nearly 20 years, more than half of those at all-star levels.  But if Trout's WAR can be at a clear HOF level in half that time, will he shatter the HOF criteria as we know them?  Let's say, God forbid, Trout suffers a career ending injury after 10 years in the league and he's accumulated a WAR of roughly 90, tying him with Steve Carlton at 44 all-time.  But his HRs will likely be less than 350, RBIs could be under 1,000, Hits could be shy of 2,000  (great but no guarantee) and he wouldn't have played long enough to accumulate enough SB for HOF voters to really care, especially since he'll likely slow down as he bulks up with age.  In this scenario, his career value would be greater than the vast majority of HOFers, but he wouldn't be anywhere near accumulating the career stats necessary for inclusion since his career would have lasted half as long as normal. Will advanced stats catch on soon enough for HOF voters to put a player like Trout in the Hall in this scenario? Or will statistical accumulation continue to rule the vote?

AustinDumas
AustinDumas

Imagine how much CONSISTENTLY better these players would be if we paid them for performance as opposed to giving them guaranteed ridiculous sums of money. What I mean is, has anybody done stats on the fall-off of production after a guy signed one of these monster contracts (especially in this case with only 2 years under your belt)? I suspect there's a whole lot of down with few players maintaining or increasing there production. Sure, make their base salary decent based on years of service.  Say 10 million to start for a top tier player. 2 million for an average player. Then make the remaining 20 million incentive based.  X number of home runs, RBIs, hitting, defensive play, etc. etc. The current system is going to break the league. At some point their going to have to raise ticket prices to the point where people either refuse to pay or can't pay to go to a game. It'll be like hockey in Toronto where only the rich can watch games.

MikeLambert
MikeLambert

For you morons wondering why players aren't still evaluated on baseball card numbers its because not one baseball card ever took defense into consideration. The Angels probably saved themselves some money by unnecessarily moving the best CF in the game to LF to make room for a marginal player.


Also, the idiot that made the 3rd place comment should consider that a guy making $500K carried entirely too many over the hill clowns making $20M +...

AaronDunckel
AaronDunckel

The worst part about this is the extrapolation.... Trout has been great for a very limited time... paying a long term contract on that is exactly whats killing some of these teams... but hey its their money

The_truth_hurts
The_truth_hurts

Its only a matter of time before guys like this start using players I.Q and SAT scores as a stat. Take this nonsense to a different sport. You sabermetric guys are killing baseball.

DouglasFennema
DouglasFennema

What a joke. What ever happened to plain old BA,HR, RBI''s etc. Please no more of this.

The_truth_hurts
The_truth_hurts

DSymborski is a writer? So SI hires charlatans now? Bravo. 

JcHc3in1
JcHc3in1

I'll never understand why dumb people read smart people analysis. They probably don't even read it all, let alone understand any of it. If you don't get it, ask for help or find an article more to your comprehension level. I am sure Sesame Street has a website with simple things for ya!  ;)

Sneeral
Sneeral

@John4  Did you ever hear of a ballplayer named Pete Reiser? In his first full year he won the NL batting title while leading the league in doubles, triples, runs scored, and slugging percentage. He also finished 2nd in MVP voting. He looked like the next immortal breaking out in the big leagues. But he ran into too many outfield walls (the guy hustled) and injuries wrecked his career. 


That's why Trout is going to (and should) sign a long term deal.

jb22
jb22

@ineedataxi  Maybe because they're paid to be athletes and not mathematicians and statisticians?   Also, Joey Votto says Hi. Maybe if we go by what you're implying, knowing advanced stats (like Votto does) would help "most big league players" perform more like saber-loving, top 5 MLB player, Votto.

BrianC2
BrianC2

@oasis1994 The Angels get a lot of money from their TV deal so I doubt a big contract for Trout will cause ticket prices to go up that much. Around the time a six year contract ends the Pujols contract will be ending too so the Angels can lock Trout up for his career. I doubt we'll see many other players being talked about with this kind of pay. Not for years at least.

Momus3
Momus3

@oasis1994  --- I'm not sure there are many more ways for this to be said that haven't already been tried, but I'll give it a shot:


Player salaries have no effect on ticket prices.


Ticket prices are based on supply and demand.  If you have 10 tickets to sell and 20 people are willing to pay $50, then you find out how many are willing to pay $100 because you can't sell more tickets than you have.  This means that to make the most money you increase the cost until the demand is close to the supply.  Once only 10 people are willing to buy the tickets you know how much they are really worth and charge that.


If the New York Yankees got Mike Trout, Miguel Cabrera, Clayton Kershaw, Robinson Cano, Evan Longoria, Andrew McCutchen, Justin Verlander, Buster Posey, Troy Tulowitski, Yasiel Puig and Greg Kimbrel to all come to the Bronx and play for league minimum the ticket prices would not go down.  


In fact prices would go up - a lot - because the demand for tickets to see this All-Star team play would be incredibly high.  If the Yankees themselves didn't charge more then most of the tickets would end up getting resold for a huge profit by the people that buy them.


So in closing: Player salaries have no effect on ticket prices.

.

JcHc3in1
JcHc3in1

@oasis1994  How is the Yankees signing the players you mentioned to extensions any different from the Angels extending Trout?

Baseball is still the most affordable sport for families to attend. Teams are getting the money from TV anyway. Guys like Cano signing for big money with other teams is becoming more and more rare as teams lock up their young talent early these days.

JcHc3in1
JcHc3in1

And you do realize your being hypocritical considering your own comments here?

JcHc3in1
JcHc3in1

@PRM  Good points. Kaline's career ended early, as did Koufax. Both were duly rewarded with a plaque in Cooperstown. If it should happen to Trout, like you said God forbid, the same "concession" is likely to be made, if he keeps up his dominance. A lot of voters use the 10-year dominance as their criteria.

Momus3
Momus3

@AustinDumas  --- Three things:


1) Money becomes pretty abstract after a few million dollars.  These players have spent literally their entire lives becoming the best in the world - do you really think they just decide to coast once they get a big contract?  What players ever do that?  I mean that seriously - what players can you name that you think coasted after they got a big contract?  I recall a lot of people saying that about Adrien Beltre - "he's a contract year player", "he only plays well in his contract years" - I notice no one says that anymore. 


2) A situation like the Leafs in Toronto would not "break the league", it would make it incredibly profitable.  Toronto is the richest team in hockey and the games are consistently sold out.


3) Player salaries have no effect on ticket prices. Why are ticket prices higher in Toronto than anywhere else in the NHL when player salaries are capped?  Because player salaries have nothing to do with ticket prices.  Toronto charges more because the demand is so high.  See my comment above.


.

thygeson
thygeson

@MikeLambert That's because Trout isn't a great defensive player and far from "the best CF in the game."  Last years stats bear that out.  Look it up on Fangraphs or baseball reference.  He is an average defender with a below average arm.  (As many assists last year as I had.)  His previous season was a statistical aberration benefited by a few exceptional plays that skewed his numbers.  Bourjos is a superior defender.  The Angels certainly thought so because when ever he was healthy he was in center and I think they would know better than you as do all the people you refer to as "morons" or "idiot" are well aware of. 

JcHc3in1
JcHc3in1

@MikeLambert  Peter Bourjos might have been marginal offensively, I might even say worse, but he is a world class defender in CF when healthy. Yes, even better than Trout. He does have a few years on Trout in terms of experience though too.

John4
John4

@The_truth_hurts  Uh, if they were to use IQ and SAT scores, then I would be a major leaguer, but sadly no, this is not the case.

MidwestGolfFan
MidwestGolfFan

@The_truth_hurts  

It's a form of snobbery.  I remember a stats-dork site acidly belittling some MLB star because he didn't know what one of their flagship made-up stats was.  

They're so nasty because, deep down, they know this is all a big con-game and they have zero credibility, what with their constant revisions introducing huge variations.  They're scared that people will wake up and laugh them out of the game, as should be done.

Sportsfan18
Sportsfan18

@DouglasFennema  What?  Can't you use your brain?  Just because one man as 98 RBI's doesn't mean he's a better RBI man than a guy who has 78 RBI's on a season.


What if the man with 98 RBI's came to bat with 279 runners in scoring position during the season and then man with 78 RBI's came to bat with 190 runners in scoring position?


According to you guys, a man who makes 5 out 10 free throws is better than the guy who makes 4 out of 5 because 5 made free throws is better than 4 made free throws.


You CAN'T just take the most RBI's and say they are the best or even the most HR's.  What if a guy hits 46 HR's but it takes him 614 at bats to do it?  That means he hits one HR per every 13.35 at bats...


And the other guy hits 39 HR's in only 497 at bats or one HR for every 12.74 at bats.


The man with "only" 39 home runs hits home runs MORE often than the man with 46 home runs.


Please tell me you're not American as we have enough dimwits here already.


America is falling behind terribly and we have sports fans that can't count, understand simple concepts etc...  


It would be funny if it wasn't so sad...


Which running back is better?  The one who runs it 27 times for 79 yards or the other back who runs it 12 times for 68 yards?


According to you, the back with 79 yards did better, just like the man who hit "more"HR's.



MidwestGolfFan
MidwestGolfFan

@DouglasFennema  

According to the know-it-all stats dorks, those don't count.  And don't even talk about "wins" for a pitcher -- they choke on their own bile when they hear that.


MidwestGolfFan
MidwestGolfFan

@JcHc3in1  

I've found that the people who are the most into this mathematical mumbo-jumbo have little knowledge of math.  The less educated, the snarkier they are about doubters.

It's a form of witch-burning, I guess.

John4
John4

@Momus3 Interesting, but do superstar players have to sign for the league minimum for your example to prove correct?

oasis1994
oasis1994

@JcHc3in1 @oasis1994  

I meant to throw that in there. While I complain about all this, signing Arod was about the same, only Arod was a lot older and a roider. 


I don't think games will be affordable going forward. Just wait, a bubble is going to burt in baseball

JcHc3in1
JcHc3in1

@thygeson @MikeLambert  Every SABR-minded person will tell you to take one year defensive stats with a grain of salt. They can fluctuate year to year too much.

But yes, Bourjos was a superior defender, when he actually got on the field.

John4
John4

@JcHc3in1 @MikeLambert  I must have missed Bourjos climb the wall to rob homers like Trout did.  That did happen, right, Bourjos did rob some HRs?

jb22
jb22

@MidwestGolfFan @The_truth_hurts  They're so nasty, yet the stat geeks aren't the ones posting insults toward the other.


And yeah it's a big con, those advanced stats.  The same advanced stats all the well-run organizations in baseball (rays, cards, etc) dedicate massive amounts of resources into.  Damn those stats-dorks conning all the good MLB orgs with their make believe stats helping them be more efficient.

John4
John4

@Sportsfan18 Sportsfan 18 - even if YOU'RE right, which you probably are, consider lightening up a little.  Also, watch the movie "Idiocracy".  Not so much a movie as it is a documentary on our society.  You sound like you would enjoy it.

jb22
jb22

@Sportsfan18 @DouglasFennema  Good post, but you're wasting your time trying to educate this board.  They're perfectly fine bashing things they do not understand and worshipping W/L records and RBI's.

JcHc3in1
JcHc3in1

@MidwestGolfFan @JcHc3in1  LOL! You're hilarious. You do realize that practically every single team, and all the successful ones, have an analytics staff to study these things, right?

So, your claim is that stats from the 1800's are superior to what we have today? Clearly the success of certain MLB teams would say otherwise.

JcHc3in1
JcHc3in1

@John4 @oasis1994  Who says they are "going cheap?" Angels would LOVE to sign Trout to a 10 year deal. Trout isn't interested. Smart move on his part.

John4
John4

@oasis1994 ARod's initial 10 year deal with the Rangers came when ARod was in his late 20's.  Trout is 22.  Signing him to a long term contract NOW is what is truly in the Angels best interest, BUT they are going cheap Charlie with their best player.  Interesting.

JcHc3in1
JcHc3in1

@John4 @JcHc3in1 @MikeLambert  Yes, you must have missed that. Bourjos has done that several times himself, not that robbing HRs is the only standard for great defense.