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.