Mike Trout and the Angels haven't agreed to an extension just yet, but if his new deal is any indication, one will be announced early in the 2014 season. Trout signed a one-year deal for exactly $1 million for 2014 according to the Los Angeles Times' Bill Shaikin, the largest single-season deal ever for a pre-arbitration player.
Mike Trout, Angels agree on record contract for 2014
Trout agreed to the largest one-year deal ever for a pre-arbitration player, setting the table for a future extension.
Tim Heitman-USA TODAY Sports
Spring-training drills: Let's argue about the DH
It might not sound like much, but there is a specific reason why it’s happening now. By signing Trout now for 2014, the Angels can avoid any potential luxury tax implications that an extension might have had for this upcoming season. Let’s pretend the Angels didn’t agree to a 2014 deal as they have on Wednesday, and skipped straight to signing Trout to something like the rumored six-year, $150 million extension. For luxury tax purposes, that contract would be worth $25 million per season -- the Angels are already close to $150 million in 40-man roster payroll alone for 2014, never mind when you include the payments for player benefits, bonuses paid out for incentives, or any potential in-season transactions that increase payroll. Lumping $25 million on top of that would bring them much closer to the $189 million luxury tax ceiling, and likely impact their ability to acquire additional in-season help.
More from our team sites
More from our team sites
By signing a deal for 2014 first, however, the Angels can avoid this problem entirely. If Trout signs an extension, and the terms of the extension kick off in 2015 with nothing at all changing for his one-year, $1 million 2014 agreement, the 2014 luxury tax figures are not changed in the slightest: Trout will only count for $1 million against the luxury tax, even though he would be earning guaranteed money for seven years in total thanks to the new (hypothetical) extension.
It’s luxury tax shenanigans, sure, but it’s a smart move to exploit these loopholes while they exist, as the Angels can now afford -- at least in luxury tax terms -- to add an expensive piece at some point during the 2014 season, without fear of approaching the luxury tax threshold. It also likely puts Trout in a better mood in terms of extension talks, because the Angels didn’t have to give him this much: just a year ago, they paid Trout only $510,000 specifically because they could pay him what they wanted, a decision his agent criticized. Consider this an apology of sorts from the Angels, until such time when they really pay up for arguably the top player in the game.
See More:
