Hamels, Phillies Agree to 6-Year, $144 Million Extension
A contract extension seemed inevitable as negotiations between Cole Hamels and the Phillies picked up steam in the last week, and it finally reached a conclusion late last night at about the same time the Miami Marlins and Los Angeles Dodgers came to terms on a Hanley Ramirez trade. With a week separating the Phillies from the trading deadline, they were running out of time to decide what to do with their 28-year-old ace. In the end, though, everything went as expected: the Phillies made sure the most important part of their future will be around through at least 2018, and Hamels negotiated a contract in the C.C. Sabathia–Johan Santana–Matt Cain stratosphere.
Assuming Hamels’ contract isn’t obscenely back-loaded — we don’t know the payment distribution yet — he will become the fourth Phillie to earn $20 million or more in 2013, joining Cliff Lee ($25 million), Roy Halladay, and Ryan Howard ($20 million each). The luxury tax threshold will remain at $178 million, which means that, at an average annual value of $93 million, the Phillies will have over 50 percent of their payroll tied up to those four players. With the ability to trade any or all of Hunter Pence, Shane Victorino, Joe Blanton, and Placido Polanco, the Phillies will have plenty of holes to fill for 2013 and they’ll need to get creative trying to fit the other 21 players under the remaining $90 million or so before hitting the luxury tax.
Other than that, the Phillies should feel very good about this contract. It is true that such lengthy, expensive deals to pitchers are risky, but Hamels is about as safe a bet as you can make with a pitcher. He has a very clean injury history, with just three trips to the disabled list in his career and only one since 2008 (August 13-29, 2011; shoulder inflammation). His skill set isn’t one that will deteriorate over time as his fastball-change combination relies not on peak velocity but on the velocity differential between the two pitches. Additionally, Hamels has excellent control (career 6% walk rate) and has a naturally-suppressed BABIP (career .280).
The rate of Hamels’ deterioration will heavily influence the success or failure of this contract. At 28 years old, we assume he still has plenty of good years ahead of him, but it is clearly not a guarantee. Hamels could suffer a freak injury that abruptly ends his career, or suffer a minor one that nags at him and accelerates the rate at which he declines. No, it’s not likely, but still something that could happen and it is assumed risk when handing out lengthy, expensive contracts. Baseball Prospectus, in their ten-year forecast, projects Hamels at 3.4 WARP on average through 2017 and 2.7 in 2018. It should be noted that Hamels was worth, on average, about 3.4 WARP from 2007-11, so they don’t see him eroding very much at all over the years.
It’s easy to see why most won’t project Hamels to decline very rapidly at all. The most obvious reason is that the contract starts with his age 29 season and ends with his age 34 season. By comparison, Ryan Howard‘s five-year, $125 million deal started in his age 32 season and will end in his age 36 season. Another reason is that Hamels has been one of the most consistent pitchers in baseball going back to 2007. There are only nine other pitchers who have thrown more than Hamels’ 1,159 and two-thirds innings and 176 starts since 2007. But Hamels has also been consistently elite, posting an ERA between 2.79 and 3.39 in every season aside from his fluky-bad 2009. His xFIP has ranged from 3.02 to 3.63 and his SIERA from 3.03 to 3.66.
While at the same time being very reliable, Hamels has also made noticeable improvements. In 2010, when he added a cut fastball and improved his curve, he set a career high strikeout rate (25%). The next season, he set a career-low walk rate (5%), a career-best K/BB (4.4), and spiked his ground ball rate (52%). Who knows what tricks Hamels will pull out in the future, but we know for a fact that he is capable of evolution, which will only make his aging process even more elegant.
This contract extension is arguably the best move of GM Ruben Amaro’s career and one that will be met with near-universal praise. Phillies fans should be thrilled that Hamels will continue to don red pinstripes through at least 2018, continuing his legacy, and the Phillies will be in a prime position to attempt to compete again as soon as 2013. In a time when the Phillies are sellers for the first time since 2006, today is a very good day for the Phillies and their fans. Cole Hamels will be around for a long, long time.