Ryan Howard’s victory over the Phillies in his arbitration hearing has set tongues wagging in the media. Agents and other young players will be licking their lips as well.

The general reaction to the news has been quite dramatic, with many seeing this as a major turning point in the future of arbitration hearings and the cost of young players. The level of response has partly been caused by the (misguided) belief that Howard would lose his case.

The Phillies’ offer of $7m to a third-year player looked about right when compared to the precedents set by other arbitration hearings. Howard’s demands for $10m were well above the $7.4m that Miguel Cabrera was awarded last year in a similar situation. As the arbitration panel can only choose one of the two offers on the table, rather than split the difference, the odds appeared to favour Howard receiving a little short of what Cabrera collected rather than receiving $2.6m more.

So much for that. Rather than fall in line with previous decisions, the arbitration panel concluded that Howard”s case would set a new precedent. For the likes of Hanley Ramirez and Prince Fielder, that could prove to be very important when they start discussions with their respective teams in the off-season.

Why did the Phillies lose this case? Well, Jayson Stark at ESPN raises the point that they may have shot themselves in the foot by tabling an offer that was below Cabrera’s salary last year. If the arbitration panel couldn’t justify Howard receiving less than the third baseman, they had no option but to select the $10m instead. So the Phillies probably could have saved themselves some money had they offered an extra $750,000 in the first place (with the benefit of hindsight, of course).

Will this decision really have wide-ranging ramifications? It will for the Phillies as this sets the base level for Howard’s worth. The truth is, Howard and his agent have probably played themselves out of a long-term deal with the Phillies due to Ryan’s exceptional performances at the plate and his agent’s exemplary performance at the arbitration hearing. Albert Pujols was able to agree a 7 year/ $100m deal with the Cardinals back in 2004 prior to his fourth year in the Majors. Howard and his agent will take account of the inflation in the free agent market and think a deal of $150m or so over a similar time period is what he deserves. If they can’t agree a multi-year deal, Howard’s salary will be set in the light of possible arbitration hearings over the next three years and, barring the player missing a whole season through injury, he can count on getting a decent increase each year under the process. The Phillies could easily be paying Howard $16m in 2011 and that’s a lot of money for someone who hasn’t reached free agency.

Whether this opens the floodgates for increased player salaries remains to be seen though.

Howard is undoubtedly a special player. In 2005, he won the NL Rookie of the Year Award despite only playing in just over half the Phillies’ games that year (88). In 2006, he smacked 58 homers, drove in 149 runs and hit .313/.425/.659; a stunning performance that resulted in him being named the NL MVP. Last season was a slight comedown in comparison, but .268/.392/.584 with forty-seven bombs wasn’t too shabby for only his second season as a full-time player.

Indeed, some claimed that his performance last year was initially hampered by the contractual disputes that he went through with the Phillies. He wanted a multi-year deal, the two sides couldn’t come to an agreement and therefore he had to settle for a $900,000 salary. Not exactly chicken feed, but certainly the bargain of the century for a reigning MVP.

Another thing that also shouldn’t be overlooked when comparing Howard’s case to others is his age. He may have less than three years of service time, but Howard is already twenty-seven years old. While Fielder and Ramirez both became Major League regulars at twenty-two, Howard was twenty-six when he played his first full season in 2006. Most importantly, that was no fault of Howard’s. The presence of Jim Thome at first base in Philadelphia meant that he was held down in their system despite being ready for the Big Leagues (the Phillies understandably refused to trade him at the time despite pressure from the player and his agent to do so). Howard could probably have been a regular since the start of 2004, which would have made this coming season his fifth rather than his third. Bearing in mind that he may ultimately lose two years of his Major League career (and more to the point, two years of Major League salary) because of this, perhaps the arbitration panel decided he should be paid as a twenty-seven year old ballplayer rather than a third-year player in this case? I’ve not read anything to say this was a factor and, in all honesty, I’m not sure if that is something they can take into account; however if that was part of the decision, maybe the salary Howard has been awarded won’t be quite the precedent that people think.

At the very least, that’s going to be the Brewers’ and Marlins’ argument next February.