Orioles reach agreement with pitcher Yovani Gallardo (updated)

SARASOTA, Fla. - The Orioles have reached an agreement with right-hander Yovani Gallardo on a three-year contract worth $35 million, according to multiple sources, filling the spot in their rotation vacated by Wei-Yin Chen. The deal includes a $13 million option and is contingent on Gallardo passing his physical, which could take place Sunday.

Update: I’m told the physical is more likely to take place on Monday.

It’s not the last order of business, but they’re getting closer.

The club targeted Gallardo early in free agency, but they had reservations about surrendering the 14th overall pick. Gallardo turned down a qualifying offer from the Rangers.

The Orioles appeared to move away from Gallardo until about three weeks ago, when they began checking his medicals again and stepped up their efforts to sign him. They vowed to upgrade the rotation after finishing at .500 last season, and Gallardo was their best remaining option in free agency.

Gallardo-Rangers-Sidebar.jpgGallardo initially sought an opt-out clause in his contract, but the Orioles are firm in their belief that it doesn’t benefit the club. The clause wasn’t a deal-breaker. Instead, the sides needed to revisit the amount of guaranteed money that would complete negotiations and further discuss the option.

I’m told that talks began to heat up again yesterday.

A former second-round pick of the Brewers, Gallardo is 102-75 with a 3.66 ERA in nine major league seasons. He’s made 30 or more starts in seven consecutive years.

Gallardo, who turns 30 later this month, brings some concerns about his slight drop in velocity and strikeouts per nine innings, which have gone from 9.0 to 7.2 to 6.8 to 5.9. His WHIP rose from 1.295 in 2014 to 1.416 last season.

The rotation now consists of five right-handers, including Chris Tillman, Ubaldo Jimenez, Miguel Gonzalez and Kevin Gausman. The Orioles also traded for right-hander Odrisamer Despaigne, who has three minor league options remaining.

The Orioles still want to add another hitter and are willing to part with the compensatory pick, awarded after Chen signed with the Marlins, in order to secure switch-hitting outfielder Dexter Fowler. They also have talked to the Reds about Jay Bruce and retain interest in Pedro Alvarez, a free agent who’s represented by Scott Boras. However, Fowler is the guy they’re targeting and a source said tonight that he expects the Orioles to complete the deal.

The source said the Orioles have talked about a two-year deal worth around $24 million that would include an option. They would relinquish the 28th overall pick.

Alvarez projects mostly as a designated hitter and that role should be filled by Mark Trumbo, with Chris Davis getting the bulk of the starts at first base. Fowler can play right field, bat leadoff and enable Manny Machado to move down in the order, though manager Buck Showalter is fine with his third baseman batting first again in 2016.

The addition of Gallardo gives the Orioles 59 players on their spring training roster, including 31 pitchers. However, they still have to make a corresponding move to place Gallardo on their 40-man roster.

MLB Network’s Jon Heyman first reported the agreement with Gallardo.

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