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Source: Orioles closer to deal with Yovani Gallardo

After being engaged in deep discussions with free-agent right-hander Yovani Gallardo over the past several weeks, the Orioles now appear closer than ever to finally landing the pitcher they've long been seeking to upgrade their starting rotation.

The Orioles were nearing a deal Saturday with Gallardo on a three-year contract in the $35 million to $40 million range, according to an industry source. Details must still be ironed out and he must pass a club physical before a deal can be completed.

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Asked earlier Saturday about negotiations with Gallardo, Orioles executive vice president Dan Duquette said a deal wasn't imminent.

"It's really hard to handicap whether you're going to get a deal completed or not, so I try not to," Duquette said. "We just keep working it, trying to find the right fit for the team. We have a lot more work to do to get our team in shape, so that's my perspective on it. We have a lot of work to do."

The Orioles are known for being extremely meticulous in their deal-making with free agents. Even deals with known commodities such as first baseman Chris Davis and setup man Darren O'Day this offseason took several days to complete as final details were ironed out and physicals were administered.

"There's situations where either the situation comes together and you have a deal or you agree you're not going to have a deal," Duquette said. "Those situations come up all the time, but we're always trying to build our roster, so we're trying to look for opportunities all around and it just seems like the last few years the offseason has extended into the training season for the club."

The team is in play for not only Gallardo but also outfielder Dexter Fowler. Both would fill the Orioles' pressing needs in the rotation and outfield, but both would require the club to forfeit their highest pick in this year's draft because each player declined a qualifying offer earlier this offseason.

"We've been looking to adding to our outfield depth as well as our pitching, so we've been talking to a number of players," Duquette said.

The Orioles emerged as the front-runner for both players in recent days — and reports that the club was close to a three-year deal with Gallardo in the $40 million to $45 million range surfaced two weeks ago — but Duquette indicated the team is still currently weighing the ramifications of losing its top draft picks.

The Orioles hold the 14th overall pick in the first round and their next selection is 29th overall, which is a compensation pick for losing left-hander Wei-Yin Chen in free agency. Both of those draft positions could improve if the three remaining free agents tied to compensation — Gallardo, Fowler and shortstop Ian Desmond — leave their previous teams.

"That's part of the consideration in the situations with the free agents that require compensation," Duquette said Saturday in his first spring training media session. "So if the club is going to participate in that market, they have to take into account the value of the pick — the current value and the potential future value of the pick — so that's part of our consideration in each of these instances for compensation free agents. It's a system that's been in place a couple years, but there seems to be certain players in the market where it affects their contract."

If the Orioles sign both players, they would still have four picks in the top 91 selections: a second-round pick, a compensation pick for not signing last year's second-rounder, a competitive balance pick after the second round and a third-round selection.

"Who are [the picks going to be]?" Orioles manager Buck Showalter said. "They're not here, and it's a challenge that they [get] here if you keep the picks for anybody. We have a good scouting department. It's just a challenge. Where was Chance Sisco taken? Where was Jonah Heim taken? Where was Mychal Givens taken? They're not always sitting there at 14 and 29 or whatever it is. They might be sitting there at 54. There's a lot of ways to look at it. There's ways to compensate for those losses. If you sign two of the best Latin American prospects and you give up 14 and 29, which [situation] are you gonna [take]?

"When all the smoke clears and we see who we've got in uniform, [ours] will try to beat yours."

Duquette dismissed the notion that the Orioles are holding out for a better value, even though no other strong suitors have emerged for either Gallardo or Fowler.

"I think this time of year, the players are anxious to get going," Duquette said. "They are anxious to get going with their programs so they can have a good year. And the clubs are looking to staff their teams so they know who they have.

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"I believe these draft picks have a specific value in the marketplace and we try to qualify what that value is and factor it into our discussions. That's all. It's a fact that these players who turn down the qualifying offer have that compensation attached to their compensation plan, so each of them has a specific value as far as we're concerned. I think that's reflected in the market."

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