Mo Money Mo Problems

What is $3 million between friends?

Myself and the rest of my friends in The Millionaire Club may laugh at that figure, but it may be the monetary difference that sends Ryan Howard and the Phillies to an arbitrator to determine his 2008 contract. Howard feels that he should be paid $10 million and the Phillies think his worth is $7 million (I like how they rounded to the closest million). It is always possible that the two sides come to an agreement before it reaches arbitration, but I think the $3 million gap is not going to be bridged very easily.

Arbitration awards are based on both performance and service time. To put Howard's demands into perspective, Alfonso Soriano is the only player in the history of baseball to be awarded $10 million in arbitration and he received that before his sixth year in the league, his last before becoming a free agent. Howard is classified in the "Super Two" category for players that have not had three full service years in MLB, but fulfill other playing time categories to qualify for salary arbitration. Needless to say, no player has ever received $10 million in their first year in arbitration.

Todd Zolecki has done a great job so far covering this issue, both in print and at his blog. He speculates that Howard's contract demands will be in excess of the 7 year, $100 million contract that Albert Pujols signed.

This issue seems have to split the fanbase into two camps; one thinks that the Phillies are being smart for not extending Howard immediately and the other shouting "C'mon, stop bein' so cheap and pay the man".

I fall firmly in line with those that feel the Phillies are doing the correct thing in not handing over the keys to the vault to Howard at this time. Why? Let me count the ways.

1. When a team and a player come to an agreement for a long-term contract before the player reaches free agency, it usually is a win-win for both parties. The team is able to buy the player out of his first year or two of free agency at a discount, as compared to what he would possibly get on the open market, and the player gets the security of a long-term, guaranteed contract. Ryan Howard is a unique situation because he will be 27 when the season begins and the Phillies have him under control for the next four seasons, or until after the 2011 season. When Pujols got his contract, he was 24 years old and three years away away from free agency. By giving him a four year contract, the Cardinals bought Pujols out of his first four years of free agency and locked him up until age 31, through his assumed peak years. The Phillies already have Howard under their control through age 31 without giving him a contract extension.

2. According to Baseball Reference's most comparable players to Ryan Howard at age 27, two of them also had very similar body types to Howard, Cecil Fielder and Mo Vaughn. Let's look at both guy's OPS+ after age 26:

Fielder
26: 167
27: 133
28: 117
29: 124
30: 113
31: 111
32: 108
33: 101
34: 86

Vaughn
26: 146
27: 144
28: 150
29: 152
30: 153
31: 119
32: 115
33: 113
35: 73

As can be seen from above, both guys saw their production dip tremendously at one point, Fielder at age 28 and Vaughn at age 31, and never saw it return to its previous levels. So while Howard has been tremendous the last two years, there should be some trepidation on the Phillies' part to give him to long of a contract extension.

Right now, I think the Phillies should try to get him to sign for three years at 30 million with the contract breaking out as $8.5 million in 2008, $10.0 in 2009, and $11.5 million in 2010. I think that is a win-win for both sides. And then in 2011, we can have all out war.