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Cole Hamels Should Reject The Phillies’ Offer

The Philadelphia Phillies are going to make a big play to keep Cole Hamels. The team is planning to offer Hamels a six-year, $130 million extension in the coming days, according to CBSSports.com’s Jon Heyman. Since 2006, Hamels has been a mainstay in the Phillies rotation, accumulating an ace-like 25.7 WAR for the team over that period. Hamels is set to be a free-agent at the end of the season, which is why the Phillies are making a play to keep him now. If Hamels declines, it’s more than likely he’ll be traded so the Phillies can receive something of value for him before he hits the market. And even though the Phillies reported offer is more than fair, Hamels should reject it.

Whether he accepts the Phillies’ offer or chooses to test his luck on the free-agent market, Hamels is going to receive a huge contract. About two months ago, I looked at Hamels’ performance a that point in his career and determined that he deserved to make anywhere between $140 million and $160 million on the free-agent market based on recent contract signed by similar players. Hamels has had two months to build more value, so his outlook is rosier now. While a contract worth $130 million is pretty fair, there’s already a good chance Hamels will make more on the market.

In his article, Heyman mentioned that the $130 million could just be a starting point, and the figures could rise based on negotiations. But even if the Phillies are willing to offer something in the ballpark of $140 million and $160 million, Hamels should still decline and test the market.

When I looked at Hamels two months ago, I looked up similar pitchers who had reached free agency in order to come to my conclusion. But now that Hamels is being offered an extension, it makes sense to look at similar pitchers who never hit the market, and instead signed extensions with their teams. I made a custom leader board that looked at the cumulative WAR totals of pitchers between their age-22 and age-28 seasons since 2000. Hamels made his debut at age 22, and is 28 this season. I used the cutoff of the year 2000 in order to look at more recent contracts. Even that was probably too far back, so I narrowed it down to recent deals that players signed around age-28.

Here are some of the relevant players who signed extensions.

Pitcher Age Year WAR Deal
Jered Weaver 29 2012 24.3 Five-year, $85 million
Matt Cain 27 2012 22.8 Six-year, 127.5 million
CC Sabathia 31 2012 37.5 Five-year, $122 million
Dan Haren 28 2009 26.6 Four-year, $44.75 million

And here’s a list of similar players that tested the free-agent market.

Pitcher Age Year WAR Deal
John Lackey 30 2010 25.5 Five-year, $82.5 million
Barry Zito 28 2007 24.2 Seven-year, $126 million
CC Sabathia 28 2009 37.5 Seven-year, $161 million
Johan Santana 29 2008 35.1 Six-year, 137.5 million
Cliff Lee 32 2011 9.1 Five-year, $121 million

A few notes about the charts: Cole Hamels has accumulated 25.7 WAR over his career, placing him squarely in the middle on both charts. The WAR total shows each pitcher’s WAR up until their age-28 season. That’s why Sabathia’s total is the same on both charts, I only wanted to look at his performance through age-28 since that is Hamels’ age.

The two charts show some very significant differences. Both Matt Cain and CC Sabathia were able to attain big money through extensions this season. But if you look at the players who tested free agency, nearly all of them received significantly more money. Both Johan Santana and Sabathia produced more value than Hamels at that point in their careers, so it’s unclear whether Hamels will receive an offer as large as Sabathia’s $161 million. The inclusion of Cliff Lee shows just how much a pitcher can make on the market. He only accumulated 9.1 WAR through age-28, but still managed to receive a $121 million contract. Between age-28 and age-32 Lee has been an exceptional pitcher, which is why he received so much money, but he was also four years older than Hamels when he signed that deal. The difference in age is a major factor in Hamels’ favor.

It’s not difficult to figure out why players receive more money on the free-agent market. There are more teams bidding for their services, and agents can pit those offers against each other until one team offers huge amounts of money. Players that negotiate with their teams don’t have that leverage.

If the Phillies are willing to offer Hamels $130 million now, there’s a good chance they would offer him a similar deal once he hits the market. And Hamels knows that he’ll be able to leverage that offer with whatever offer he receives from the Dodgers, who are rumored to be very interested in the left-hander. The Phillies aren’t stupid. They realize this could be their last chance to keep Hamels. Even if they offer a better deal, he’ll probably still play the market. And it’s the right thing to do, because he’s going to make significantly more money once he has that leverage.