In 1984, Magic Johnson for the Los Angeles Lakers signed one of the most lucrative deals in history: 25 years, $25 million. Essentially, the Lakers offered him the first ever “lifetime contract” to show their loyalty for him and make sure that they would lock him up for the rest of his career. Obviously Magic wouldn’t play all the way through the end of his contract that ended in 2009 (he retired in 1996), but in 1984 people would have an impossible time thinking that anything could come close to someone signing a contract for $25 million.

Fast forward to 2018, and we think an athlete got the wrong end of the stick if they sign a contract for $25 million. Contracts seem to be pushing the limit each year with no end in sight. NBA stars like Steph Curry and Russel Westbrook are making $40 million a year, MLB pitchers Zach Greinke and Clayton Kershaw are making over $30 million a year, and even the NFL is starting to dish out $25 million salaries to quarterbacks and wide receivers.

So, when you have an all universe baseball player like Mike Trout approaching free agency, playing at a level exceeding everyone in the last 150 years, that check is going to be enormous. Trout is already the highest position player in the MLB and is supposed to make $32.25 million each year until 2020. As if that wasn’t enough, baseball experts are expecting that he is going to be the first player in sports history to sign a $400 million total value contract.

In an attempt to keep the greatest player of the generation, his current team the Los Angeles Angels have decided that they are going to offer him a lifetime contract to lock him in for the foreseeable future. There are tons of different options that the Angels can offer him, but if you were in Mike Trout’s shoes, how would you negotiate this deal? Does it make sense to sign the contract and lock in the next 20 years of your career, or should you see what you can bring in free agency?

I decided to take a look at the top MLB salaries in history to forecast what MLB salaries will look like in the years to come, and what Trout should value himself at when it comes time for free agency.

For those of you who are more interested in the time series analysis, the code for this project can be viewed at https://github.com/anchorP34/MLB-Salary-Predictions. As always, leave any comments for other ideas you have on this subject or other analysis you would be interested in seeing.