The Orioles spent the offseason reluctant to pursue big-ticket free agents tied to qualifying offers because they were hesitant to forfeit their first-round pick in this year's draft. But they've still maintained steady interest in right-hander Yovani Gallardo, the only remaining free-agent pitcher who will require losing a draft pick to sign.
And now, with one week left until pitchers and catchers report to spring training, the Orioles — who have done little to upgrade their starting rotation, which they targeted as their No. 1 offseason priority — are engaged in ongoing dialogue to sign Gallardo, according to an industry source.
Gallardo, who turns 30 on Feb. 27, was issued a qualifying offer by the Texas Rangers, so the Orioles would lose their first-round draft pick (currently 14th overall) in order to sign him. That is a steep price, especially since it would be the Orioles' highest pick since taking Kevin Gausman fourth overall in 2012, but even a pick in the middle of the first round offers no guarantee of success.
It marks a shift in philosophy for the Orioles, who highly valued their draft-pick surplus earlier this offseason, but could now make a serious play for two of the three remaining free agents tied to a qualifying offer.
A nine-year veteran coming off a solid season with the Rangers, Gallardo went 13-11 with a 3.42 ERA in 33 starts in 2015. He struck out 121 and walked 68 in 184 1/3 innings. Gallardo's ERA and innings would've ranked second among Orioles starters last season behind left-hander Wei-Yin Chen, who signed with the Miami Marlins.
Gallardo would offer the Orioles exactly what they need, an innings eater who has maintained his effectiveness as he has evolved from a flamethrower to a contact pitcher. Gallardo has a track record of durability, averaging 191 innings over the past seven seasons. Gallardo's strikeout total has slowly declined over the years, going from 9.9 per nine innings in 2009 to 5.9 in 2015. But he has posted an ERA above 3.66 only once in the past five seasons, when he had a 4.18 ERA in 2013 with the Milwaukee Brewers.
Gallardo was seeking a contract in the four-year, $50 million range earlier this offseason, but the Orioles are currently discussing no more than a three-year deal.
Even if they lost their first-round pick to sign Gallardo, the Orioles would still have five picks among the first 100 in this year's draft. But relinquishing the first pick could also allow them to be a player for free-agent outfielder Dexter Fowler.
Fowler, who declined a qualifying offer from the Chicago Cubs, would also require losing a pick. If the Orioles signed Gallardo, they would be much more open to making a run at Fowler, who would cost the Orioles the 29th overall pick but could also fill their corner-outfield hole.
Fowler, who turns 30 on March 22, had a strong season with the Chicago Cubs last year, hitting .250/.346/.411 while setting career highs in runs scored (102) and home runs (17) while finishing with 46 RBIs. The eight-year veteran's career .363 on-base percentage would upgrade an area of need for the Orioles.
It would be much like the Orioles' spring training signings in 2014, when they forfeited the 17th overall pick to sign right-hander Ubaldo Jimenez to a four-year, $50 million deal and then relinquished their second-round pick by signing outfielder Nelson Cruz to a one-year, $8 million flier. By doing that, the Orioles were able to sign two free agents tied to draft-pick compensation to contracts under market value.
That season, the Orioles didn't have a pick until the 90th overall. But even if they lost their first two picks this year, the Orioles would still have four picks among the first 91.
After committing nearly $215 million to free agents this offseason, the Orioles' payroll for 2016 is already beyond the $130 million mark, their highest in franchise history.