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Alden Gonzalez explains why no Mike Trout extension is forthcoming

Sep 27, 2013, 6:24 PM EDT

Mike Trout AP

Many have assumed that the Angels will try to work out a long-term deal with Mike Trout this winter before the price tag becomes even more overwhelming, but there’s a very good reason that won’t be happening. And it has a lot to do with that hideous Vernon Wells deal still taking a toll. The Angels are just too close to the luxury-tax threshold to commit big bucks to Trout at the moment.

MLB.com’s Alden Gonzalez lays it all out in his blog entry:

Well, let’s say the Angels sign him to a 10-year, $300 million deal (that’s just a number I’m throwing out, basically because it’s easy to divide — and perhaps because I’m thinking of Robinson Cano). Even if in that contract, Trout is making only $1 million in 2014, the figure for the CBT [Competitive Balance Tax] payroll would be the AAV [Average Annual Value] of that: $30 million.

It matters nothing what Trout makes next year if he signs a long-term deal; it’s his average salary that counts. And since the Angels already have Albert Pujols, Josh Hamilton, Wells, Jered Weaver and C.J. Wilson combining for annual salaries of $100 million, with many more mid-range players also under contract, they can’t give Trout the kind of contract he deserves and stay under the luxury tax at $189 million.

(Yes, Wells still factors in to the tune of $18 million next year. Under the deal the Angels worked out with the Yankees this spring, the Halos got some relief from his 2013 salary, but they’re taking on nearly all of that responsibility for 2014, largely because the Yankees wanted to get under the luxury tax next year.)

The Red Sox used to run into this same problem, and the Yankees, too, have typically been shy about signing younger players to multiyear deals. It’s the hidden cost of operating in the vicinity of the luxury tax; whereas small-market teams can give their young players long-term deals and save a lot of money in the long run, it costs the large-market teams extra to do so.

In this case, Trout is so incredibly valuable that one could argue the Angels should ignore the consequences and try to get something done anyway. It’ll cost them extra now, but it might yet save them some money down the line. After all, that annual salary he’ll command in a long-term deal figures to be significantly smaller now than it will be once he hits arbitration.

  1. b453841l - Sep 27, 2013 at 6:31 PM

    Might be something fishy going on seeing as Mike Carp also has no extension forthcoming from the Red Sox…

    • Matthew Pouliot - Sep 27, 2013 at 6:46 PM

      Not really sure Carp is the kind of player the Red Sox would lock up, unless they make the move just for the halibut.

      • mikefoxtrot - Sep 27, 2013 at 7:41 PM

        I’m ashamed to have enjoyed that groaner.

      • Mark - Sep 27, 2013 at 7:51 PM

        Read it again. Slowly.

    • Utley's Hair - Sep 28, 2013 at 10:02 AM

      Tim Salmon has not been reached for comment about halibut, Carp or Trout.

  2. proudlycanadian - Sep 27, 2013 at 8:08 PM

    Obviously, there is a porpoise in their decision making. Walleye Cleaver tweeted that the Wells contract only has one more year to run. They can probably try to sign Trout to whale of a long term deal after next season. They should make a move before the Yankee sharks start circling.

    • lazlosother - Sep 27, 2013 at 8:20 PM

      I’m not so sure the Yanks will be circling. They have contract issues of their own and they can’t buy their way out.

      Think about it, they have Tex, CC, A-Rod through 2017 at least. A;; three are regressing. They need to decide what to do about Cano. They have holes up and down the bullpen, rotation, infield and outfield. They have no impact players ready to move up to MLB.

      As good as Trout is, there is no reason for NY to bank on landing him. He won’t be enough to change things, and he will be the type of contract that has burned them too many times in the past. There will be other big money teams chasing him. The Angels have time to lock him up. I don’t expect to ever see Trout playing for NY.

      • proudlycanadian - Sep 27, 2013 at 10:12 PM

        By the time Trout is a free agent, New York would no longer be worried about the Luxury Tax.

      • everettpost - Sep 28, 2013 at 1:03 AM

        The Los Angeles Angels don’t have the testicles to do what is right…trim their payroll of the excessive salaries they’ve stupidly added in the last two years and sign quality non-injured players with a future, not a past. Cleaning house, starting with the entire coaching staff and definitely the manager should be the off-season plan. Truly, how worse can the Angels be if they do nothing, which typically is their plan after making such horrific decisions, as the organization is prone to do. Everyone picks on the Yankees’ player decisions, but check again how many MLB teams have to be combined to get even close to New York’s world championships. Maybe the Angels need to look at Oakland or even San Francisco to see programs that operate both within their means and make quality decisions. And no, the Giants’ did not do well this season, but 2012 turned out OK for them, huh?
        At any rate, the Angels again will have lots of time to golf and be with their families, extended families, hopeful families and medical staffs.

  3. Kevin S. - Sep 27, 2013 at 8:47 PM

    Mike Trout would *not* be the kind of contract that has burned the Yankees, because when Mike Trout becomes a free agent (assuming the Angels are unable to buy out any of his FA years), he’ll be entering his age-26 season. Even assuming a ten-year contract, he’d be young enough that the bulk of that deal would be during his prime and the tail end should only be the early decline, during which he’d still likely be a quality player. And while much can change in four years, the Yankees currently have zero obligations for the 2018 season. If we’re getting close to that time and it looks like the Halos will be unable to lock him up prior to FA, I’m sure the Yanks will leave room in the budget for a pursuit of Trout.

  4. Carl Hancock - Sep 27, 2013 at 9:20 PM

    I knew the Pujols deal was going to be an albatross but so many people point to the TV deal the Angels have and say it doesn’t matter. The reality is it does matter and it’s increasingly clear it’s going to be an albatross and possibly far quicker than ever thought if his downward spiral continues. The Angels could very well lose Trout due to the insane contracts they’ve handed out over the last couple off seasons. Trout would be smart to not sign an extension now considering what kind of deal he’d be in line to get if he hits the open market. He’s from New Jersey and I’m sure the Yankees would jump at the chance to throw money at him considering the state of their organization right now. By then they’ll have plenty of money freed up to spend. Meanwhile the Angels will still be paying Pujols $30 million a year to be a washed up superstar.

    • gibbyfan - Sep 27, 2013 at 9:54 PM

      Carl,
      Seems like everyone knew it was a potentially very bad deal from the get go, everyone except Angels management/ownership

    • Reflex - Sep 27, 2013 at 10:41 PM

      It still does not matter. Arte Moreno is a multi-billionaire. Avoiding the luxury tax is a dumb reason for not signing his stars. If he chooses to not lock up Trout it will be a decision he chooses to make, not one he is forced into regardless of how many bad signings he makes.

      • coloradogolfcoupons - Sep 29, 2013 at 1:06 PM

        Locking up Trout is not strictly Moreno’s decision. Trout has to sign the paper…just sayin’.

        If Trout wants to play in Philly, Boston, Yankees, Dodgers….THAT is where he will play, if he keeps up this pace. He will pick his next stop, and nothing Moreno can do about it…which is why it was extremely stupid to make him play for $500,000 this year. Trout will remember the snub

      • Reflex - Sep 29, 2013 at 4:30 PM

        No doubt, but it won’t be because the Angels don’t have the money, or because they have other bad contracts on the books. Which is the contention people are making. Pujols, Wells, Hamilton, Wilson, etc, could all be making twice what they are and it wouldn’t matter. Moreno can afford to sign Trout for almost any amount. Whether he chooses to do so or not is up to him, and as you say whether Trout decides to sign is up to him.

    • brianc6234 - Sep 28, 2013 at 5:59 AM

      Don’t worry, Pujols said if he’s no good anymore he’ll retire. We better hold him to that one.

      • cubb1 - Sep 28, 2013 at 10:12 AM

        No way.

    • imthewiz77 - Sep 29, 2013 at 12:20 PM

      Trout is from South Jersey, which many people don’t know is pretty much a different state than north jersey. Anyway he is a Philly guy.

  5. mattymatty - Sep 27, 2013 at 9:26 PM

    When did the Red Sox not sign one of their young players to stay under the luxury tax threshold?

    • Kevin S. - Sep 27, 2013 at 9:46 PM

      What they did was wait until after Opening Day to announce the extension, thereby preventing it from counting against that season’s luxury tax.

      • mattymatty - Sep 27, 2013 at 11:35 PM

        Right, but that’s different than not signing him.

    • Matthew Pouliot - Sep 28, 2013 at 12:07 AM

      Basically, 2007-08 when they were trying to negotiate the tax. Then they were able to scale back and give Lester, Youkilis and Pedroia their deals in 2009. It wasn’t that they were losing players because of it.

  6. happytwinsfan - Sep 27, 2013 at 11:15 PM

    are we talking about playing baseball or playing monopoly?

  7. paint771 - Sep 27, 2013 at 11:33 PM

    On the one hand, the Blue Jays haven’t won 80 games this year or last.

    On the other hand, they moved the Vernon Wells contract.

    I think so far on these two points alone I’m calling Alex Anthopoulos’ record as Jays GM a draw.

  8. brianc6234 - Sep 28, 2013 at 5:58 AM

    I don’t agree with this. Arte Moreno created this big mess. Go ahead and spend more money and lock Trout up now. Besides, the payroll is being paid by Fox Sports now anyway. Arte can put up the money for Trout.

  9. louhudson23 - Sep 28, 2013 at 6:25 AM

    So you let bad decisions dictate your best and youngest players future,because the millions paid in tax are somehow more expensive and damaging than the millions wasted on bad signings? You look to minimize the effect of mistakes and put them behind you ,not maximize their effect by allowing them to dictate your decisions well into the future…a loss is a loss…dollars are dollars….a loss in the accounting department is always preferable to a loss on the field…keep your best player on it….

  10. Utley's Hair - Sep 28, 2013 at 9:57 AM

    Talk about First World Problems.

  11. cubb1 - Sep 28, 2013 at 10:10 AM

    If the Angels let Trout slip away, it will be the dumbest move since the Red Sox sold Babe Ruth to the Yankees.

  12. jamesweltyms - Dec 23, 2013 at 5:00 PM

    A consensus building here (http://the-mike-trout-sign-o-meter.com/) is that Trout will sign with the Yankees for 10 years and $230MM+. The Angels will find a way to mess it up.

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