Hamels goes to Arbitration

I am far from an arbitration expert, but the book on the process over the years is that it is one to be avoided for several reasons.

For one thing, there is no baby splitting, meaning that if you lose, the other side’s number wins, and nothing in between. Yes, this is probably intended as an incentive to deal, but if no deal is reached in the meantime, there is a lot of risk involved.

Another thing people hate about arbitration is that it forces a team to essentially poor-mouth their own player right in front of him, or at least his representative. Want to win an arbitration? You have to explain why your guy is nowhere near the player of the three or four comparables his lawyer has up on the PowerPoint. That can’t be good for morale.

Finally, there are the lawyers themselves. An arbitration is an adversary proceeding, and that requires lawyers and fees and prep time and all of that, and no matter who is footing the bill, an adversary proceeding can be expensive.

So why then do the Phillies seem to insist upon entering arbitration with their young stars?

Fresh off a campaign in which Hamels established himself as one of the game’s most dominant pitchers and became a World Series MVP at age 25, the young lefthander and his agent are prepared to cash in on his early success. But just how big of a payday they will reap remains to be seen. While logic says the Phillies would be prudent to lock up their young ace to a long-term deal, Hamels won’t be a free agent until after the 2012 season, meaning the Phillies control his rights for the next four seasons.

Enter the wonderful world of salary arbitration, which begins today, the first of a 10-day period when major leaguers with at least 3 years of experience – and a select few with at least 2 – can file for the process.

Hamels, like slugging first baseman Ryan Howard, is a special case, one who has little precedent with which to compare.

A season that started with him publicly expressing his discontent with his $500,000 salary ended with him winning the NLCS and World Series MVPs on top of throwing 227 1/3 innings in the regular season, second in the National League.

I’m really not the right guy to run the numbers — and maybe there aren’t enough numbers to be run at this point — but I wonder if there is some method to the Phillies madness or if, alternatively, they are simply penny wise and pound foolish. I mean, it’s possible that someone has made a reasoned analysis that paying Hamels arbitration awards for the next three or four years and then letting him walk is a more efficient than signing him to a long term deal now. But if such an analysis exists, is it the same kind of analysis that led to the Phillies preferring Raul Ibanez over Pat Burrell? Like I said, I don’t have a strong opinion here because this really isn’t my area of expertise, but it certainly seems like Philadelphia is doing things differently with their young stars than any other team is.

Maybe they’re right to do so — they are the World Champs, after all — but I wonder.

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  1. Dan Greer said...

    Howard isn’t exactly young, and I think the Phillies knew exactly what they were doing by going year to year with him. He’ll be 29 next year, and by any measure, is in decline. He’s lost 60 points of average, 90 points of OBP, and over 100 points of SLG since his MVP season of 2006.

    I believe the Phils control him until he is age 32, and with the concerns about his body type and the fact that he is already in his prime, they will almost certainly let him walk at that point.

    That said, I don’t know what they’re thinking with Hamels, and the Ibanez signing looks particularly awful in the wake of the Bradley and Burrell contracts. I do think they will lock him up for something like a 5-year deal, but it’s pretty hard to read that front office.

  2. Mark said...

    The other thing teams (especially the Phillies) and agents consider with these long term deals for their youngsters is how the deals are going to look to other players and to their own players once the deals are over.  The recent deals signed by Longoria and Pedroia should end up greatly favoring the Rays and Sox, respectively.  When they are over or close to it, the players, assuming their careers continue on their predicted trajectory, are going to be resentful of playing for such a low salary.  The players are going to want to renegotiate and the teams will probably reject this.
    The contract then reflects poorly on the team, for making it seem cheap, and on the agent, for not convincing the player to hold out for a better deal down the line.  How many Scott Boras clients have signed a long term deal like this?  Few if any I’d guess because he knows he would be selling his client short.
    So really this is a two pronged reason with teams reluctant of alienating players and agents reluctant of selling their clients short and losing them to tougher agents (Boras).

  3. ecpglp said...

    I’m not in any way close to the situation, but do we know that Hamels does, in fact, WANT to sign a long term contract?  Some players don’t care to do that, preferring to go year to year.  In his case, though, it doesn’t seem like it would be too bad to go ahead and sign for three or four years at least until he is FA eligible; he can’t go anywhere until then anyway unless he is traded. 

    Sure, perhaps he was unhappy with his salary this year, but he wasn’t arb-eligible so that’s how the game is played.  The big paydays come later and it would seem he’ll be in for a pretty good one now.  Maybe he’s upset enought to think, the heck with the Phillies, I’m going to go year-to-year for now, then walk at the end of it or force their hand in a trade.

  4. Steve said...

    @dlf- You seem to have a deeper insight than most regarding the inner workings of the Howard arb. At anytime did the Phils offer him any sort of reasonable longterm deal. By reasonable I mean 6/yr-$100 mil or so. I keep reading this hogwash about Howard wanting $200 mil, but have never found anything to substanciate that (real quotes or references) outside of just the re-parroting of rumors.

  5. Richard Dansky said...

    The only way any of the Phils’ offseason moves make sense is if the words “Omar Minaya”, “orbital mind control lasers” and “Pat Burrell is actually named Gort” are invoked in the explanation.

  6. Daniel said...

    Didn’t Hamels have injury problems early in his pro career?  Obviously after throwing 250+ innings last year, you could come to the conclusion that those are behind him, but then there’s the fact that he threw, you know, 250+ innings last year, and that workload often takes its toll.

    Maybe the Phillies know something about his arm that makes paying more in year to year contracts worth avoiding the risk of a breakdown.

  7. Mike Kraus said...

    The other thing about arbitration is that from a human/emotional standpoint it would not seem to engender a warm and fuzzy feeling between the team and the player.  Even though the process is supposed to be business and not personal, I would wonder how many ill feelings the process would create with the player that might be at least a small stumbling block toward future negotiations.

  8. dlf said...

    For what its worth, most clubs outsource their representation at arbitration hearings.  (The Phillies used Tal Smith, formerly the Astros GM last year in the Howard case.)  That way they can distance themselves from some of the harsher things that are being said.

    Of course sometimes the things being said aren’t all that harsh.  In Howard’s case, the Phills compared him favorably to the best hitters in the game; the player succeeded because he convinced the panel that his performance was – literally – Ruthian.  Yes, he used Babe Ruth as one of his comps.

    With regards to Hamels and a long term deal, the injury risk to young pitchers is very significant.  Is he looking for more than Peavy got (years and dollars) last year?  And now with several years left before FA, Peavy appears to be damaged goods.

  9. Daniel said...

    I’m pretty sure I heard that K-Rod was pretty upset about some of the things said at his arbitration proceedings.  He came out of it with a sour taste in his mouth and it made it easy for him to reject the Angels’ extension offer (two or three years at $12 million per, I believe), even though that offer wound up being very competitive with what he actually got.

    So yeah, arbitration can really damage a player’s relationship with the team.  Some guys probably don’t let it bother them, but some obviously do.

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