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February 5, 2013

Arbitration Showdown

Mock Hearing: Jason Hammel

by Ian Miller, Doug Thorburn and Ben Lindbergh

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It's salary arbitration season in Major League Baseball, and here at Baseball Prospectus we're holding mock hearings, arguing for or against the actual team/player filing figures before a three-person panel of certified arbitrators. We've selected 10 of this winter's most intriguing, highest-dollar cases to cover in depth over the first two weeks of February (regardless of whether the players' real-life cases remain unsettled). After each side's opening argument and rebuttal/summation below, we'll give you a chance to vote on what you think the result should be before seeing the panel's decision. For more on the arbitration process, read the series intro by Atlanta Braves Assistant GM John Coppolella, listen to his appearance on Episode 35 of Up and In, or check out the BP Basics introduction to arbitration.

In Part Two of this 10-part series, we'll tackle Baltimore Orioles right-hander Jason Hammel, who is seeking $8.25 million and has been offered only $5.70 million by his employer. He and the Orioles have yet to reach a settlement. (*Update* Hammel and the Orioles avoided arbitration and settled for $6.75 million after this piece was published.)

Mock Hearing Schedule

Table of Contents

The Criteria

The criteria will be the quality of the Player’s contribution to his Club during the past season (including but not limited to his overall performance, special qualities of leadership and public appeal), the length and consistency of his career contribution, the record of the Player’s past compensation, comparative baseball salaries, the existence of any physical or mental defects on the part of the Player, and the recent performance record of the Club including but not limited to its League standing and attendance as an indication of public acceptance.

The complete procedure for salary arbitration is available in the Basic Agreement.

The Case

vs
Jason Hammel
Player Request:
$8.25 million
Represented By: Ian Miller
Midpoint:
$6.975 million
Baltimore Orioles
Club Offer:
$5.70 million
Represented By: Doug Thorburn

Position: RHP
DOB: 09/02/1982
Bats/Throws: R/R
Service Time: 5 years, 133 days
   

Player's Presentation

Jason Hammel’s 2012 season was the culmination of a lifetime of hard work. Although it was not without its travails, 2012 was the breakout season scouts and coaches had long foreseen for the big right-hander. He posted career-best numbers in nearly every major rate category: win-loss record, ERA, park- and league-adjusted ERA, WHIP, hits per nine innings, strikeouts per nine innings, and several others.

The trade from the Colorado Rockies to Baltimore certainly helped Jason’s numbers: There’s no doubt that moving from the extreme offensive environment of Coors Field in Denver to sea level in Baltimore had an impact—an impact that is sustainable and permanent. One should view his previous career statistics with this in mind.

But the change in home park is only part of the story. Jason added a sinker to his repertoire in 2012, throwing it 31 percent of the time after not throwing it at all in 2011. As a result, he posted a career-best ground-ball rate: 54 percent. His previous-best ground-ball clip came with the Rays in 2008, when 47 percent of balls put in play against him were grounders. Higher ground-ball rates tend to result in fewer home runs allowed, so the addition of a sinker to Jason’s arsenal has made him an even-more-formidable and effective pitcher.

And he did all of this in the American League East, typically regarded as the toughest division in baseball. In 2012, the AL East included the teams with the two highest payrolls in all of baseball: the Yankees and Red Sox. The Yankees were also second in all of baseball in runs scored with 804, while the Red Sox tied for eighth place with 734 runs scored. Given the quality of the competition Jason was facing, his achievements look even more impressive. The opposing hitters he faced had the third-highest collective OPS (On-base percentage plus Slugging Percentage) of any AL pitcher who threw at least 100 innings last season:

Player Innings Pitched OPS Against
Jarrod Parker 181 1/3 771
Hisashi Iwakuma 125 1/3 771
Jason Hammel 118 768
Jake Arrieta 114 2/3 766
Blake Beavan 152 1/3 766

Jason did struggle with injuries in 2012. However, as of this time, Jason’s surgically repaired knee is 100 percent, and he has been cleared to play. When healthy, Jason’s performance in 2012 represented a major step forward. While he was not an All-Star in 2012, he certainly pitched like one. In late June, before the All-Star Game rosters were announced, Orioles manager Buck Showalter was asked whether he thought Hammel should make the American League All-Star team.

“I think he should be a strong consideration,” Showalter said. “I get to see him pitch every fifth day. I can't imagine a guy having a much better year than he's having.” [emphasis added]

Showalter reiterated his faith in Hammel when he handed him the ball in Game One of the American League Division Series against the aforementioned formidable Yankees club. In Game Five, when the Orioles were facing elimination, Showalter again tapped Hammel as his starting pitcher.

When the season was on the line, the Orioles depended on Jason Hammel. Jason wants to repay the faith the Orioles showed by leading them to the postseason again in 2013. He expects to get the ball on Opening Day, and he hopes to be compensated accordingly, as the Orioles’ staff ace. For that reason, we request that he be paid $8.25 million for the upcoming season.

ERA Comparables

Stats Year

Player

Innings Pitched

Appearances

ERA

W-L Record

Next Season Salary

2012

Jason Hammel

118

20

3.43

8-6

?

2008

Brandon Webb

226.7

25

3.30

22-7

$6.50 M

2011

Brandon McCarthy

170.7

33

3.32

9-9

$4.275 M

2010

C.J. Wilson

204

33

3.35

15-8

$7.00 M

2010

Justin Verlander

224.3

33

3.37

18-9

$12.85 M

2006

Carlos Zambrano

214

31

3.41

16-7

$12.40 M

2011

Jon Lester

191.7

33

3.47

15-9

$7.63 M

2011

Shawn Marcum

200.7

29

3.54

13-7

$7.725 M

2007

Oliver Perez

177

32

3.56

15-10

$6.50 M

2010

Wandy Rodriguez

195

15

3.56

11-12

$7.50 M

2010

Erik Bedard

81

32

3.67

6-4

$7.75 M

2011

Anibal Sanchez

196.3

34

3.67

8-9

$8.00 M

Average salary for these comparable players:

$8.01 M

 

Win-Loss Record Comparables

Stats Year

Player

Innings Pitched

Appearances

ERA

W-L Record

Next-Season Salary

2012

Jason Hammel

118

20

3.43

8-6

?

2011

Scott Baker

134.7

23

3.14

8-6

$6.50 M

2007

Aaron Cook

166

25

4.12

8-7

$4.50 M

2007

Horatio Ramirez

98

20

7.16

8-7

$2.75 M

2008

Jose Contreras

121

20

4.54

7-6

$10.00 M

2006

Shawn Chacon

109

26

6.36

7-6

$3.825 M

2011

Brandon McCarthy

170.7

25

3.32

9-9

$4.275 M

Average salary for these comparable players:

5.31 M

 

Overall/Composite Player Comparables

Stats Year

Player

Innings PItched

Appearances

ERA

W-L Record

Next-Season Salary

2012

Jason Hammel

118

20

3.43

8-6

?

2008

Jose Contreras

121

20

4.54

7-6

$10.00 M

2011

Scott Baker

134.7

23

3.14

8-6

$6.50 M

Average salary for these comparable players:

$8.25 M

Because of Jason’s injury, finding full-season comparables can be difficult. However, these two players are the closest all-around matches we found. Jose Contreras posted an ERA a full point higher than Hammel’s while notching one less win in the same number of appearances and nearly the same number of innings pitched. He was paid $10 million.

Scott Baker made three more appearances than Hammel but posted the same win-loss record with a slightly better ERA (3.14 vs. Jason’s 3.43). He was awarded $6.5M. The average of these two salaries? $8.25 million, the amount we are requesting for Jason. —Ian Miller

Club's Presentation

Jason Hammel was a solid contributor to the Baltimore Orioles in 2012, his first season with the organization, though his playing time was limited by a knee injury that made him unavailable for a total of 83 games, more than half of the Orioles’ schedule. Hammel experienced soreness in May that led to arthroscopic surgery to remove loose bodies from his right knee on July 16. He returned from the injury in September, but recurring problems with the knee took him off the field again in his second game back in action. The Orioles were encouraged by Hammel's performance when he was on the field, yet the combination of injury risk and an inconsistent performance record leads to some uncertainty when considering his contributions for the 2013 season.

Jason Hammel's History of Performance and Compensation

Season

IP

ERA

W - L

WHIP

K/9

BB/9

Salary

2008

78.3

4.60

4 - 4

1.51

5.1

4.0

$0.3863 M

2009

176.7

4.33

10 - 8

1.39

6.8

2.1

$0.422 M

2010

177.7

4.81

10 - 9

1.40

7.1

2.4

$1.90 M

2011

170.3

4.76

7 - 13

1.43

5.0

3.6

$3.00 M

2012

118.0

3.43

8 - 6

1.23

8.6

3.2

$4.75 M

Constructing a list of comparable players for Hammel is a challenge, as it is rare to find a contemporary example of a pitcher who achieved a similar spike in performance during his fifth year of service, in a season that was likewise hampered by injury. Despite these barriers, the presence of players with similar characteristics will allow the Orioles to demonstrate that his appropriate compensation is closer to the $5.7 million that the Club has offered than the $8.25 million total that has been filed by the Player.Hammel's 2012 season was his first campaign with an ERA under 4.30 or a WHIP below 1.38, though his diminished innings total is a problem for a pitcher who has never managed more than 180 innings in a season. Hammel has never been named to an All-Star team, nor has he finished in the running for any major awards. His walk and strikeout rates have been inconsistent throughout his career, and those two elements cloud his future reliability.

Player (Platform Year)

IP

ERA

W - L

WHIP

K/9

BB/9

Salary

Hammel (2012)

118.0

3.43

8 - 6

1.24

8.6

3.2

?

Todd Wellemeyer (2008)

191.7

3.71

13 - 9

1.25

6.3

2.9

$4.05 M

Brandon McCarthy (2011)

170.7

3.32

9 - 9

1.13

6.5

1.3

$4.275 M

The table outlines the statistics from each pitcher's fifth season of major-league service, with the platform year indicated in parentheses. The values in the Salary column reflect compensation for the following season, such that Todd Wellemeyer's 2009 salary was $4.05 million, following his statistical performance from 2008. Wellemeyer and Brandon McCarthy pitched more innings than Hammel in their respective platform seasons, with comparable results, yet those totals represented career highs for both of the $4 million pitchers.

Player (Stats Yr)

IP

ERA

W - L

WHIP

K/9

BB/9

Salary

Hammel (2012)

118.0

3.43

8 - 6

1.24

8.6

3.2

?

F. Liriano (2011)

134.3

5.09

9 - 10

1.49

7.5

5

$5.50 M

J. Sanchez (2011)

101.3

4.26

4 – 7

1.44

9.1

5.9

$5.60 M

J. Saunders (2011)

212.0

3.69

12 - 13

1.31

4.6

2.8

$6.00 M

The pitchers who fall into the range of Baltimore's $5.7 million offer to Jason Hammel are typically those with similarly volatile performance records. Left-handers Jonathan Sanchez and Francisco Liriano shouldered comparable workloads to Hammel in their respective fifth years of service, and though Sanchez and Liriano fared poorly in their abbreviated seasons, each lefty had posted far superior numbers in previous years. The statistical ratios of Joe Saunders in his platform season were more similar to those of Hammel, though Saunders' reliability earned him a higher salary, as his 212 innings pitched marked the fourth consecutive season in which he had thrown more than 180 innings.

Player (Stats Yr)

IP

ERA

W - L

WHIP

K/9

BB/9

Salary

Hammel (2012)

118.0

3.43

8 - 6

1.24

8.6

3.2

?

S. Baker (2011)

134.1

3.14

8 - 6

1.17

8.2

2.1

$6.50 M

Harang (2007)

231.7

3.73

16 - 6

1.14

8.5

2.0

$6.75 M

Aaron Harang experienced a similar spike in performance during his platform season of 2007, though he also established himself as a workhorse with more than 230 innings pitched, a total that surpasses Hammel's highest mark by more than 50 innings. According to the all-encompassing Wins Above Replacement (WARP) statistic from Baseball Prospectus, Harang's platform season was worth 4.4 WARP, compared to 2.7 WARP for Hammel (which was a career high), and Harang had also cleared the bar with 3.3 WARP the previous season.

The best comparison to Jason Hammel's platform season was likely Scott Baker's performance of 2011. Like Hammel, Baker experienced a breakout in his fifth year of major-league service, posting the best ERA, WHIP, and strikeout rates of his career during a season that was cut short by injury. He had delivered one previous season of excellent performance and carried a more consistent stat line than Hammel overall, and Baker's career numbers to date were far superior to those of Hammel in every meaningful category aside from compensation.

Player

IP

ERA

W - L

WHIP

K/9

BB/9

$ Earned

Hammel (2008 - 2012)

850.0

4.78

42 - 51

1.44

6.6

3.1

$10.47 M

Baker (2007 - 2011)

958.0

4.15

63 - 48

1.26

7.2

2.1

$9.50 M

Hammel has the potential to reach another level, but his present-day profile presents too much risk with an unreliable track record, thus failing to justify the contract of a $7 million player. The Orioles consider Hammel to be a key piece of the ballclub, and the proposed offer of $5.7 million is commensurate with his standing among his cohort of professional pitchers. —Doug Thorburn

Player's Rebuttal/Summation

While we appreciate the Orioles’ position with respect to Jason’s salary, their case fails to account for two major factors: Hammel’s history with the Colorado Rockies, and the prospect of his playing a full 2013 season, unhampered by injury.

The Collective Bargaining Agreement makes allowances for teams who control the rights to players who sustain injuries. The teams are not compelled to tender contracts to those players, but they may tender them if they believe the players will overcome their injuries and contribute to their clubs. The Orioles weighed the risk and chose to tender a contract to Jason. For that reason, we assume they believe, as we do, that he is ready to contribute in 2013.

Between 2009 and 2011, Jason pitched 514 1/3 innings with the Rockies, and roughly half of those innings were pitched at home, at altitude. From 2009-2011, Coors Field ranked first overall in Park Factor for runs scored, which isolates the offensive impact of the ballpark. As the table below shows, Coors boosted total offense by anywhere from 25 to 40 percent in the three years Jason pitched there. (A value of 1.000 would represent a “neutral” park that doesn’t inflate performance in any of these offensive categories.)

YEAR

RUNS

HR

H

2B

3B

BB

2009

1.247

1.082

1.158

1.266

1.771

1.07

2010

1.364

1.496

1.222

1.282

1.677

0.917

2011

1.409

1.500

1.134

1.188

2.333

1.030

Jason’s statistics between 2009 and 2011 were adversely affected by Coors Field’s multiplicative effect on offense. It’s not Jason’s 2012 performance that is the outlier; it’s his former home park. Now that he’s pitching half his innings at Camden Yards—and has no scheduled starts at Coors Field—we expect the improvement to be sustainable and permanent.

Coors also had effects that go beyond the obvious offensive categories. Take Innings Pitched, for example: Because of the extreme offensive environment of Coors, Rockies starters typically throw fewer innings than their counterparts on other teams. Between 1993 and 2010, Rockies starters combined for only 14 200-inning seasons, the second-lowest mark in the National League. The average for all NL teams over that span was 22 such seasons. In three full seasons with Colorado, Jason pitched more than 170 innings, averaging 175 innings per season. That he didn’t pitch more was not a result of health problems—he missed only 18 days due to injury in those three seasons combined—but the difficulties of pitching at Coors. With a clean bill of health and a “fairer” home park, now that he has recovered from knee surgery, Jason should have no trouble exceeding his previous 175-inning benchmark.

If he hits that mark while maintaining his 2012 ERA and win-loss percentage, that would put him in the company of players like Chad Billingsley, who threw 188 innings in 2012 with a worse ERA and win-loss record than Hammel and was awarded $9 million. There’s also Jeremy Bonderman in 2008, who would be an even-closer comp at 174 1/3 innings, but with an 11-9 record and an ERA over 5.00. He received $8.5M. —Ian Miller

Club's Rebuttal/Summation

It is our contention that Jason Hammel's playing time in his platform season is a key determinant of his compensation, as it reflects not only the Player's risk of injury, but also the relative impact of his 2012 performance. If Hammel had pitched a full season, then the Orioles would feel more confident in the sustainability of his statistical gains moving forward, but the limited sample size combined with the possible recurrence of injury must enter the equation when determining the appropriate level of compensation.

The athlete's representatives presented three tables of comparable players, differentiated by various statistical measures that have also been covered in our report. The first table underscores the critical role of playing time in this case: of the 11 pitchers presented with similar ERA's, 10 pitched at least 50 more innings than Mr. Hammel in their platform seasons. The one exception was Erik Bedard, a pitcher who was one year removed from a top-five finish in the voting for the American League Cy Young Award.

Hammel’s injury limited his opportunities to add to his won-loss record, a factor that is reflected in the second chart of the Player's case. When compared to pitchers with similar records, the commensurate salary comes out to $5.3 million, which is $400,000 less than our offer to Mr. Hammel. The list of pitchers in the second chart also includes Jose Contreras, a player who falls under peculiar circumstances that preclude him from a just comparison to Jason Hammel. Contreras was an international free agent from Cuba, and he entered the open market, where all 30 major-league organizations were permitted to bid for his services. Contreras was a legend in Cuba whose $10 million salary was negotiated under very unique conditions that had a ripple effect on his future earnings.

Both sides came to a similar conclusion, in that Scott Baker presents the most apt comparison to Jason Hammel. We have established that Baker was the superior pitcher, with regard to career statistics as well as performance during the platform season, and Mr. Hammel's 2013 salary should fall reasonably short of the $6.5 million that Baker earned one year ago. —Doug Thorburn

The Reader Poll

Before scrolling down to read the three-person panel’s decision, record your own decision here:

The Panel

Burt Fendelman is an attorney with more than 45 years of experience, initially in corporate finance and securities laws working as inside counsel for several major securities brokerage firms. He has performed as an arbitrator for FINRA (Financial Industry Regulatory Authority), the American Arbitration Association, and currently as an arbitrator and mediator for the New York County Lawyers Association in fee dispute-related matters. He is presently a self-described “work in progress”, working with clients in areas related to art and antiques. He attended Washington University in St. Louis and NYU Graduate School of Tax Law, and he now lives in Manhattan.

Doris Lindbergh is a retired lawyer who is an arbitrator with FINRA (Financial Industry Regulatory Authority) and its predecessor forums, the National Association of Securities Dealers (NASD) and the New York Stock Exchange. She also arbitrates for the National Futures Association (NFA). She attended Washington University School of Law and has a Master of Arts from Fordham University. Her employment history includes stints at Wall Street investment banks and, most recently, the MTA New York City Transit Authority, but her most challenging assignment was raising a future Editor-in-Chief of Baseball Prospectus.

David Marcus is a retired lawyer and serves as an arbitrator with the Financial Advisory Regulatory Authority (FINRA). He lives in Metuchen, New Jersey. He attended Columbia College and Yale Law School, after which he served as an enforcement attorney with the SEC. His subsequent career includes working for the New York Stock Exchange heading its regulatory division, and working for several broker-dealers as a regulatory attorney or General Counsel.

The Panel’s Decision

3-0 in favor of the Club

We recognize that Mr. Hammel did pitch at an improved level in many respects in 2012. We believe, however, that there was not an adequate basis to conclude that he is a better pitcher rather than occasionally pitching better. It is to be hoped, for his sake and his team's sake, that he will be able to realize the potential that he demonstrated last season. —Doris Lindbergh and David Marcus

Hammel has been a so-so pitcher in his six-year career. Lifetime won-loss is under 500, 42 wins vs. 51 losses, an overall ERA of 4.78, with one good year, 2012, with a team that won 93 games. In addition, his injury in 2012 kept him out for a good part of the 2012 season with the risk of an unknown physical condition for 2013. Although 30 might be a peak time for pitchers, at that age recovery is a bit slower and, for a pitcher who has never thrown more than 180 innings, I do not see the potential that would justify an almost 75 percent increase in salary. My decision is to go with the Orioles' offer of $5.70 million. —Burt Fendelman

The Sabermetric Perspective/Additional Commentary

After Jason Hammel held the Nationals to one unearned run over eight innings late last June, striking out 10 without walking a better, Washington shortstop Ian Desmond—the lone Nat to get two hits—said, “If you don’t know already, Hammel is a pretty unbelievable pitcher. He’s an ace, probably one of the better pitchers we’ve seen this year. He’s got three quality pitches and a 96-mph sinker.”

Desmond was right. Hammel was dominant that day, throwing 23 sinkers in 96 pitches, the hardest of which was clocked at 96.2 miles per hour.

The previous July, less than a year before Desmond’s rave review, Hammel (then with the Rockies) had beaten the Nationals, holding Desmond to one hit. But that time, there was little post-game praise. That time, it took Hammel 95 pitches to get through only 6 1/3, allowing two runs, walking two, and striking out only three. And that time, he maxed out at 94.6 mph. If anything, the reaction was relief: in his previous seven starts, Hammel had posted an ERA over 6.00, and he’d gotten so desperate that he’d switched to high stirrups and added an over-the-top windup to his delivery for that Nationals start.

Hammel had no eight-inning starts in 2011. He didn’t have any eight-strikeout starts, either. And he threw no sinkers, according to Brooks Baseball. No one was describing him as an ace, because he wasn’t one.

As Ian asserted in his pro-Player case, Hammel wasn’t the same pitcher last season. Performance-wise, he was an ace. There was nothing fluky about his 2012 stat line except for the fact that he hadn’t had one like it before. His FIP was lower than his ERA, and his FRA—which, remember, is on the Runs Allowed scale—was lower than his ERA or FIP had been in any previous season. Prorate his WARP—which even as it was, placed in the top 10 among AL pitchers—to 200 innings pitched, and only Justin Verlander would have had a higher one (barely, and in almost 40 more innings).

The real problem is that Hammel has never managed to get to 200 innings without prorating. It would be one thing if the only strike against him were his pre-2012, pre-sinker, subpar performance. But as Doug (evidently) convincingly argued above, Hammel—be it because of his ballpark, his performance, or his health—hasn’t demonstrated durability, either. Those two strikes together put Hammel in a hole his rock star/baseball writer representative couldn’t overcome.

In a chat at BP last October, Jason Parks laid out a definition of “ace” that conflicts with Desmond’s but conforms to that of the industry as a whole:

It takes more than just stuff. Being an ace is about putting it all together and being consistent with the high-end results over an extended period of time. You don’t flash being an ace. You either are an ace or you aren’t an ace. It’s not a casual label. Aces are bred from their own history.

Whatever your definition of “ace,” it’s clear that the recency and brevity of Hammel’s heightened performance separate him from most other starters who’ve earned that label. Some research by Doug that didn’t make it into the Club’s case above produced the following list of starting pitchers who were eligible for their final year of arbitration from 2007-2012 and, like Hammel, had maxed out at under 180 innings pitched in a season to that point in their careers (not counting Justin Duchscherer, who’d spent most of his seasons in the bullpen):

Player

Max IP

Platform Year

Comp $

Jason Hammel

177.7

2012

?

Ryan Vogelsong

179.7

2011

$3.0 M

Chris Young

179.3

2009

$6.375 M

R. A. Dickey

174.3

2010

$2.75 M

Brandon McCarthy

170.7

2011

$4.275 M

Dustin McGowan

169.7

2011

$0.60 M

Shawn Chacon

160.0

2006

$3.825 M

Average

$3.50 M

Pitchers who haven’t shown the ability to handle a heavy workload generally haven’t cashed in via the arbitration system. No starter over those several seasons without a 180-inning season on his resume managed to get much closer than $2 million away from Hammel’s request.

That table offers examples of both the best- and worst-case futures for Hammel. Vogelsong and Dickey, both of whom enjoyed unprecedented success in their final platform years, solidified that success and broke the 180-inning barrier the following season. Others—Chris Young, Brandon McCarthy, and Dustin McGowan—have been their same old selves, suffering serious injuries in their combined five seasons since and failing to top 115 innings in any of them. If Hammel can’t stay healthy, he’ll have to resign himself to living on sub-$10 million salaries, somehow. But if he approximates his 2012 rate stats over the whole 2013 season, he’ll get his payday next winter, when he hits free agency. And in that case, a defeat in fake arbitration won’t weigh heavily on his mind. —Ben Lindbergh
 

Thanks to Dan Evans, Colin Wyers, Hudson Belinsky, Jonah Birenbaum, and Andrew Koo for research assistance.

Ian Miller is an author of Baseball Prospectus. 
Click here to see Ian's other articles. You can contact Ian by clicking here
Doug Thorburn is an author of Baseball Prospectus. 
Click here to see Doug's other articles. You can contact Doug by clicking here
Ben Lindbergh is an author of Baseball Prospectus. 
Click here to see Ben's other articles. You can contact Ben by clicking here

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INCOMING ARTICLE LINKS
2013-02-15 - Premium Article Arbitration Showdown: Mock Hearing: Sergio R...
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