Investor Alert

March 22, 2019, 9:25 a.m. EDT

Baseball star Mike Trout signed a $426.5 million contract — why he’s worth $630 million

Based on his value, he’s worth as much as the next two highest-paid players combined

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By Steven Kutz, MarketWatch

Victor Decolongon
Mike Trout of the Los Angeles Angels.

Major League Baseball doesn’t market its individual players as much as leagues like the NBA and NFL, so a lot of people might not have heard of Mike Trout. But he’s been arguably the best player in baseball for over five years, and now he’s the highest-paid athlete in the country.

Trout, 27, recently signed a contract extension that will pay him a total of $426.5 million until he’s 39 years old. Born in New Jersey, Trout was picked by the Angels in the first round in 2009. He was AL rookie of the year in 2012 and has been an All-Star seven times, baseball’s MVP twice, and he’s finished second in MVP voting four times.

Also see: Tim Tebow on investing: Tithe first, and find ways to make money while you sleep

Granted, seeing that an athlete is being paid almost half a billion dollars seems staggering, but compared with his fellow players, he is “worth” it, many baseball statisticians and experts say. In fact, one highly respected baseball stats website, Fangraphs , says that based on Trout’s value, he’s worth as much as the next two highest-paid players combined. They would be Bryce Harper, who recently signed a 13-year, $330 million contract with the Philadelphia Phillies, and Manny Machado, who recently signed a 10-year, $300 million contract with the San Diego Padres.

Fangraphs bases this on what is called WAR , or wins above replacement. The equation for WAR is:

WAR = (Batting Runs + Base Running Runs + Fielding Runs + Positional Adjustment + League Adjustment +Replacement Runs) / (Runs Per Win)

Without getting too wonky, WAR is an attempt “to summarize a player’s total contributions to their team in one statistic,” according to Fangraphs, who adds that it “attempts to estimate a player’s total value relative to a free available player, such as a minor league free agent.”

Table: Player Comparison, 2012 – 2018

Player PA wRC+ BsR Offf Def WAR
Bryce Harper 3957 140 11.0 199.7 -30.1 30.7
Manny Machado 4074 120 -5.9 90.7 64.3 30.2
Harper + Machado 130 5.1 290.4 34.2 60.9
Mike Trout 4538 174 50.4 444.4 17.8 64.0
Source: Fangraphs

Another thing to consider about the pay of baseball players is that they generally make a lot less from endorsements. For example, according to Forbes, Trout made $2.5 million from endorsements last year. His sponsors include BodyArmor, Rawlings, Topps, Nike . By comparison, the best players in the NBA made more than 20 times that much — LeBron James made $52 million in endorsement money last year and Steph Curry made $42 million.

Here’s a look at the biggest contracts in MLB, according to mlb.com , once Trout signs.

  • Mike Trout, Angels, 12 years, $426.5 million

  • Bryce Harper, Phillies: 13 years, $330 million

  • Manny Machado, Padres: 10 years, $300 million

  • Alex Rodriguez, Yankees: 10 years, $275 million

  • Alex Rodriguez, Rangers: 10 years, $252 million

  • Albert Pujols, Angels: 10 years, $240 million

  • Robinson Canó, Mariners: 10 years, $240 million

  • David Price, Red Sox: 7 years, $217 million

  • Prince Fielder, Tigers: 9 years, $214 million

  • Max Scherzer, Nationals: 7 years, $210 million

  • Zack Greinke, D-backs: 6 years, $206.5 million

Steven Kutz is a senior editor. He writes about the business side of sports and edits 'The MarketWatch Q&A' and 'The Best New Ideas In Money.' You can follow him on Twitter @StevenKutz.

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