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Signing Tanaka, extending Trout and mutual exclusivity

A popular sentiment expressed around the MWAH comments and in other parts of the Angels blogosphere is that the Angels should abandon their pursuit of Japanese pitcher Masahiro Tanaka and instead turn their attention to signing Mike Trout to a contract extension that keeps him in Halo Red for a very long time. That line of logic dictates that the Angels are better off saving the money that they would very much like to give to Tanaka and instead set it aside for that fabled Trout extension.

If those were the only two options available to the Angels, I would very much agree with this way of thinking. When it comes to picking between keeping a generational talent locked in Anaheim for the next decade or rolling the dice on a Japanese import who probably isn't a legit #1 starter, I'll take the generational talent every single time without even thinking about it. But why is it the Angels can't have both?

I think part of this concern is the anonymous report from one agent/executive/figment of imagination that wildly speculated that he could foresee a scenario in which Mike Trout could get a $400 million extension. $400 MILLION! That's a lot! It is also patently absurd. Nobody has even gotten a $300 million contract yet, much less gotten that much in a contract that covers arbitration years. The market right now has pretty clearly maxed out around the 10-year, $240 million mark that we saw both Albert Pujols and Robinson Cano on the open market. Trout's youth gives him a great advantage over those two, but the fact that he'd be getting his extension prior to hitting the free market cancels most, if not all, of that advantage out. $400 million is a fear-mongering number and worrying about that windfall has become far too much of a factor in this debate.

If we want to use a more practical, but still incredibly expensive number, let's move forward with a 10-year, $300 million hypothetical extension. That's still an average annual value of $30 million moving forward for the Angels, a very big number for them to have to account for. With Hamilton, Pujols, Wilson and Weaver already on the books, adding that $300 million for Trout and then potentially a $100+ million deal for Tanaka, and the financial hand-wringing makes a lot of sense, at least at the macro-level.

However, the details of how all of those deals are handed out make things less concerning on the micro-level. Trout's extension might average $30 million, but it isn't as if he will make $30 million right off the bat. The way these early career contract extensions work is that the money slowly ramps up, especially over the pre-free agency years. As detailed in a previous post, a likely Trout extension could pay him what would be record salaries for each of his arbitration years and he still wouldn't be making over $20 million in a given year. The real expensive part of his hypothetical extension won't kick in until the 2018 season. You know what else happens in 2018? Josh Hamilton comes off the books. You know what happened the year before that? Weaver, Wilson and Aybar would have come off the books. The only other current Angel that has a guaranteed contract in 2018 is Albert Pujols. Pujols makes a lot money, but the rest of the payroll has been cleared out and can stay relatively cleared out if the Angels front office plans appropriately (hardly a given, I know).

What's more is that those pre-2018 salaries that Trout would be getting in his extension are what he would be getting anyway. The Angels have him under control for those years whether they extend him or not, so that money is coming to him either way. It is only 2018 and beyond that should be of any real concern. That's where a potential Tanaka signing comes into play.

In all likelihood, the winner of the Tanaka sweepstakes will be doling out a six-year, $108 million contract, give or take a few million. That's another $18 million in AAV, but like Trout, it most likely isn't going to be distributed evenly. Using Yu Darvish as a precedent, we see that his six-year, $56 million pact ramps up over time, starting at $5.5 million in the first year before maxing out at $11 million in the final year. Look at any of the big contracts the Halos have handed out the last few years and you can see that they are no stranger to backloading deals. There is little reason to believe they wouldn't try to do the same with Tanaka. Keeping that in mind, Dipoto could structure the contract so that the salaries in the first three years are pretty reasonable. As you hopefully recall, because I just said it, Weaver, Wilson, Aybar and Kendrick will all be off the payroll by then with Hamilton clearing off a year later. So, while both Trout and Tanaka would be getting big overall paydays, the first three years of each of their respective contracts are surprisingly affordable, in relative terms.

Of course, the underlying assumption here is that the Angels are actually worried about payroll limitations. Starting this season, the Angels are going to be taking home $150 million in regional and national TV contract money. Once you factor in ticket revenue, concessions, parking and the city of Anaheim readying themselves to bend over, grab their ankles and give Arte Moreno a bunch of land for nothing and the Halos are still going to make millions in profits even if they allow their payroll to climb over $170 million annually. All that TV money gives the Halos enough cash to swallow the early parts of the proposed Trout and Tanaka contracts while still paying out the bloated back ends of the Hamilton, Wilson and Weaver contracts and more than enough cash to pay the back ends of the Trout and Tanaka contracts while reloading the roster with what will undoubtedly be another glut of expensive free agent pacts.

So, yes, Virginia, the Angels can afford both Trout and Tanaka. They can have their cake and eat it, too. Sure, it is absurdly expensive, luxuriant cake, but they can choke it down if they want. Whether Tanaka and Trout want to oblige them and serve up said cake remains to be seen. But that's another story for another time.

Garrett Wilson

About Garrett Wilson

Garrett Wilson is the Supreme Overlord of Monkeywithahalo.com and editor at The Outside Corner. He's an Ivy League graduate, but not from one of the impressive ones. You shouldn't make him angry. You wouldn't like him when he is angry.

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