Everyone else was signing arbitration buyout contracts (hey, Felix!), so Hamels and the Phillies wanted in as well, coming to terms on a three-year, $20.5 million contract. What is interesting about this contract is that not only does it not buy out any of Hamels’ free agent years, it does not even cover his entire arbitration eligibility. Cole Hamels qualified as a Super Two this offseason. A Super Two is a player with less than three years service time, more than two and in the top 17 percent of said group of players. Because of that, Hamels garnered an extra early year of arbitration.
The Super Two status throws a wrench into our value calculations since our standard formula for arbitration awards, 40%/60%/80%, are based on a three-year model. The easy solution is to keep those in place and just assume that the fourth year of arbitration would be around 100% of market value. My gut feeling however is that since arbitration awards are more focused on the playing time of the player rather than his stats, that this is not the most realistic solution and that something more like 30%/50%/70%/90% is more likely for Super Two’s. I will present the math under both assumptions so that we can get a better range of values.
Projecting Hamels is thankfully pretty simple. From 2006 through 2008, Hamels posted the following FIPs: 3.98, 3.83 and 3.72. The three projection systems that FanGraphs hosts all place 2009 Hamels between his 2007 and 2008 performance and inning totals so averaging the win values for those two years is going to get us a reasonable estimate for his 2009 projection. Cole accrued 3.8 wins in 2007 and 4.6 last season, making his 2009 projection 4.2 wins. Assuming $4.5 million per win for this offseason, that’s a $19 million value.
Under my proposed arbitration weighting, the Phillies are valuing Hamels at being worth $41 million on the open market for the next three years. That’s a little over nine wins total for that time period, a mark Hamels seems sure to better. Under the 40/60/80 line, the Phillies would be paying for 7.5 wins, something Hamels might exceed in just two years time. If the projection of 4.2 wins is at all correct, Hamels looks to be worth around $54 million in value over the next three seasons. Even if you think it’s a 20/40/60/80 line for Super Twos, that’s still a discount for the Phillies. There’s no ifs ands or buts about this one, the Phillies got themselves a killer deal here. Of course, Hamels made out well himself; he’ll go into his final arbitration year with a $9.5 million starting point, meaning he’s likely to command over $12 million on that final year and he still has all of free agency ahead of him.
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