Revisiting the Angels Hypothetical

It was a little over three years ago that I first took a look at this question. The article was a hit!

Now I think it’s time to run the numbers again. People change. Situations change. Statistical projections change. Mike Trout is fantastically good. He is probably the best player in baseball, and he’s under contract with the Angels for another three seasons. Albert Pujols used to be fantastically good. He’s not so much anymore. He was just one of the worst players in baseball, and he’s under contract with the Angels for another four seasons. You know where this is going. You’ve probably wondered about this before, even though the hypothetical is stupid and unrealistic.

Trout isn’t going to get traded. Aside from everything else, he has no-trade protection. Pujols isn’t going to get traded. Aside from everything else, he also has no-trade protection. But let’s say the Angels wanted to make a trade. Let’s say they wanted to package the two players together. Does Pujols’ negative value outweigh Trout’s positive value? Would the Angels trade these players, combined, for nothing? Again, this is stupid. Let’s dive in.

Over the past three years, Trout has been worth 25 WAR. He projects at 8.7, according to Steamer, and he is 26 years old. As for Pujols — over the past three years, he has been worth 0.6 WAR. He projects at -0.1, according to Steamer, and he’ll shortly turn 38 years old.

Trout is under contract through 2020. In each season, he’s due $33.25 million. Pujols is under contract through 2021. His salary next season is $27 million, and it goes up a million each year. These contracts are complicated, especially in Pujols’ case, but for simplicity here, we’ll just focus on the regular salaries and ignore everything else. Mostly, it comes down to those terms.

There’s no scientifically rigorous means of addressing the question. We have to make a bunch of assumptions if we want to get anywhere close, so that’s what I’ll do, just like how I did it before. The goal here is combining Trout and Pujols and searching for any potential surplus value — that is, value above the guaranteed salaries. Where there’s a bunch of surplus value, there’s a bunch of trade value. Where surplus value doesn’t exist, neither does a great chance of a trade. I want to make this as simple as I can, so, I’ve run simple calculations. The results are in the following table, which is based on the Steamer projections, and on a starting point of $9 million per WAR, which is what Dave recommended when I asked him. That reflects the approximate market rate for available wins, and there’s a built-in 5% increase year over year. You see salaries and estimated values, in millions.

Trout is due just shy of $100 million, yet he’s projected to be worth a little shy of $250 million. Pujols is due $114 million, yet he’s projected to be worth nothing at all. Maybe you could argue he’s projected to be worth the league minimum or something, but that’s effectively negligible. Putting it all together, the most important number is in the bottom right. There’s a surplus-value estimate of roughly $33 million. In net present value, it’s about $34 million. That’s a fairly large and positive number, all things considered.

So it’s settled, then: Trout + Pujols = value. Even now that Trout is particularly expensive, and nearing the end of his deal, this is still a positive package. Working further in the trade’s favor is that Trout would bring compensation upon leaving in free agency. Or, you could say there’s value in being able to negotiate an extension. Working against the trade is that having Pujols is complicated; he’s not good anymore, but he’s still Albert Pujols, and last year he drove in 101 runs. No one wants to be the executive who outright cuts Pujols loose. At the same time, it would be troubling to play him too much. The Pujols situation is best from a distance, and no one would want to inherit it.

Maybe that would all balance out. Maybe it’s all still a net positive for the trade. Yet there’s one more, major complicating factor. Next year, combined, Trout and Pujols are due $60.25 million. Then it goes up to $61.25 million, and then it goes up to $62.25 million. Pujols is due $30 million in 2021. The competitive-balance-tax threshold will rise from $197 million this coming year to $210 million. Any team that goes over the threshold would have to pay some kind of tax.

The situation for every team is different, but when you’re paying a tax, it eats away at the estimated surplus value. Suddenly Trout and Pujols would effectively cost more than their salaries. In the worst-case scenario, where a team is already at the threshold and has been there for a few years, there would be a tax of 50% on the dollar. Which would raise the cost here by more than $30 million in each of the next three years. Such a team wouldn’t want to make this trade. It would no longer be worthwhile, at least absent a bunch of other cost-cutting moves. The competitive-balance tax isn’t an actual salary cap, but it sort of functions that way. Teams are strongly incentivized to drop below, and adding Trout and Pujols wouldn’t help that one bit.

More generally, it’s important for every team to be efficient. The market might pay $9 million per win in free agency, but you can’t pay $9 million per win for a whole roster. That would make a 40-WAR ballclub cost $360 million. If you take a team with a payroll of $180 million, then, in order to get to 40 WAR, it would need to average $4.5 million per win. There’s nothing that helps efficiency more than productive young players close to the minimum, but Trout and Pujols would eat up about a third of the money. Add them to this hypothetical team for 2018 and it would need to find about 31 WAR with about $120 million. Now you’re looking at $3.9 million per win for the remainder. It gets to be challenging as flexibility is limited.

Mike Trout and Albert Pujols have value, combined, in isolation. Or, if you prefer, in theory. In practice, the competitive-balance tax would take a lot of teams out of the running. The overage would chip away at that theoretical value, in some cases erasing it entirely. So Trout and Pujols would have the most value to a low-cost team that nevertheless has a lot of money to spend. A team with all sorts of financial flexibility. I don’t think there’s a better candidate out there than the Phillies, who could absorb the cost without hurting in any meaningful way. The Phillies have cut costs as they’ve rebuilt, and now they’re looking to start ramping up. They could afford Trout and Pujols, and the package would even be worth something to them. Even despite how awkward it would be to have Pujols on the roster in the first place.

I didn’t mean to take us to the Phillies, but, here we are. The original point was just to run some math. That math was run earlier, and Trout and Pujols do still have a certain amount of surplus value. In reality, the teams that could afford to take them both on are few and far between, but candidates do exist. And this is something that’s never going to happen. So concludes the latest edition of stupidly examining an Angels hypothetical.