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Right-hander Gerrit Cole will return to the Yankees, per Jon Heyman of The New York Post on X. Going into 2020, Cole and the Yankees signed a nine-year deal with a $36MM salary in each season, a $324MM guarantee. That deal gave Cole the ability to opt out after 2024, but the Yankees could negate that opt-out by adding yet another $36MM season for 2029. He did indeed trigger that opt-out a few days ago, forcing the Yankees to decide whether or not they wanted to add the extra year. Essentially, they would be deciding between letting Cole become a free agent versus keeping him around for five years and $180MM. Per Jeff Passan of ESPN on X, Cole will remain with the four guaranteed years and $144MM as though he did not trigger his opt-out, but extension conversations will continue.

For the first four years of the deal, Cole continued to perform at an ace level and it seemed like a slam dunk that he would trigger that opt-out but the Yanks would add the final year and keep him around. That was the general consensus one year ago when Cole won the 2023 American League Cy Young award after posting a 2.63 ERA in 209 innings over 33 starts.

But one year later, much has changed, which made the respective decisions more interesting. Cole was shut down during spring training this year with some elbow inflammation. No structural damage was found but his non-surgical rehab kept him on the shelf until June. He returned and posted strong results, but not quite as good as before the injury.

He eventually made 17 starts on the year with a 3.41 ERA. There might have been a bit of rust after the injury layoff, as he had a 6.75 ERA in his first four outings but a 2.67 in the final 13. He then posted a 2.17 ERA over his five postseason starts.

That injury-shortened season made is somewhat debatable as to whether Cole should walk away from the four years and $144MM left on his deal but he ultimately felt confident in doing so, forcing the Yankees into making a call.

Cole has been their ace but there were at least some arguments for them letting him go. Generally speaking, a free agent deal provides the best return on investment at the beginning, while the later years tend to be more painful. Getting a chance to walk away before it starts to hurt is going to have some appeal to a team, especially one that wants powder dry to bring back Juan Soto.

Beyond that, Cole’s strikeout rate declined this year, perhaps due to the injury but it was the fourth straight year of that trend. He punched out 33.5% of batters faced in 2021, 32.4% in 2022, just 27% in his Cy Young year and 25.4% this year. Each of his pitches in 2024 was about one mile per hour below their ’23 levels, per Statcast. Though his playoff results were good as the Yanks charged to the World Series, he actually only struck out 17.7% of batters faced.

Without Cole, the Yankees would have been going into the winter with a rotation of Carlos Rodon, Nestor Cortes, Clarke Schmidt, Luis Gil and Marcus Stroman, with Will Warren and other prospects around as depth. They could have used the extra $36MM of payroll capacity to pursue Soto while also considering reuniting with Cole or perhaps going after younger free agent starters like Corbin Burnes, Blake Snell, Jack Flaherty or Max Fried.

It seems as though the two sides may have discussed some alternate arrangements but wanted more time to hammer them out, so Cole has essentially agreed to rescind his opt-out decision. He will stay on the Yankee roster at the same terms of his previous deal, perhaps allowing him and the Yankees to work out some new deal without the ticking clock of today’s deadline for decisions on options and opt-outs.

At this point, it’s unclear if the two sides expect to work out a new deal shortly or well into the offseason. If the latter is the case, then the club will pivot towards it’s other offseason priorities, headlined by the desire to get Soto back into the fold.

The main takeaway here is that Cole will be staying in pinstripes, with the contractual stuff to be worked out another day. With him back in the rotation, now perhaps the Yankees will consider further moves to augment their rotation. They reportedly had interest in Snell last winter and could circle back to him this offseason. They almost traded for Flaherty at the deadline and might pursue him as a free agent. There were some trade rumors surrounding Cortes this year, so perhaps those could pop up again in the coming months. Stroman got bumped to the bullpen late in the year and might make more sense on the trading block, allowing the Yankees to free up some payroll for other pursuits.

TODAY: The Yankees’ deadline to decide on Cole is 4pm CT on Monday, according to MLB.com’s Mark Feinsand (X link).  The New York Post’s Jon Heyman reported earlier today that the deadline was on Monday, rather than tonight.

NOVEMBER 2: Right-hander Gerrit Cole has triggered the opt-out in his deal with the Yankees, per Kiley McDaniel and Jeff Passan of ESPN on X. However, he is not yet a free agent, as the club has a chance to void the opt-out by tacking on an extra year at the same $36MM salary as the rest of the contract.

Cole’s original deal with the Yanks was for $324MM over nine years with even salaries of $36MM in each season, starting in 2020. Per that deal, he could opt out after five years, walking away from the final four years and $144MM. The Yanks could then tack on another $36MM for 2029 and negate the opt-out. Now that Cole has triggered his opt-out, the Yankees now have to effectively decide if they want Cole back for $180MM over the next five years. If not, Cole will return to free agency.

For the first few years of the contract, Cole continued to pitch to his usual excellent standards. From 2020 through 2023, he tossed 664 innings, allowing 3.08 earned runs per nine. He struck out 31.1% of batters faced, limited walks to a 5.9% clip and got grounders at a 41.1% clip. He racked up 15.4 wins above replacement in that time, per the calculations of FanGraphs, fifth in the majors behind Zack Wheeler, Corbin Burnes, Kevin Gausman and Aaron Nola. He won the American League Cy Young last year by posting a 2.63 ERA over 209 innings.

Throughout that time, it seemed quite obvious how the contract situation would play out. Cole would make the no-brainer decision to trigger his opt-out while the Yanks would make the equally-easy decision to add on the extra year, bringing their total commitment to $360MM over 10 years.

But the road ahead became a little less certain as things developed in 2024. Cole dealt with some elbow inflammation during spring training and was shut down for a while. No structural damage was found but he was sent to the 60-day injured list as he underwent his non-surgical rehab. He was eventually able to get back on the mound, making his season debut in the middle of June.

He was a little shaky at first, with a 6.75 ERA through his first four starts, but his numbers were far more Cole-like from there. He posted a 2.67 ERA in his final 13 starts of the year. His 25.7% strikeout rate wasn’t quite all the way back to his usual level but his 6.8% walk rate was still quite strong. He made another five postseason starts with a 2.17 ERA, helping the Yanks reach their first World Series since 2009.

While Cole has seemed like his old self for months, the Yanks may still have to think about this one. As seen in MLBTR’s Contract Tracker, the largest deal for a pitcher aged 34 or older was the five years and $185MM that the Rangers gave to Jacob deGrom. That deal hasn’t gone well so far, as deGrom required Tommy John surgery and hardly pitched for the Rangers in the first two years of that pact. The Yankees would have to essentially match that deal to prevent Cole from getting away. As mentioned, tacking on the extra year would mean committing to paying Cole $180MM over the next five years, just shy of the deGrom deal.

Cole’s record of durability is far better than deGrom’s. Cole has thrown almost 2,000 innings to this point in his career while deGrom was just over 1300 when he signed with Texas. Still, Cole is just recovered from a notable absence related to his throwing elbow. Most of the other pitchers in this age bracket signed shorter deals with higher average annual values, with Wheeler’s recent extension with the Phillies coming in at $126MM over three years. Max Scherzer’s deal with the Mets was $130MM over three, though he was a few years older, starting that deal at age-37.

The Yankees are facing the prospect of Juan Soto hitting free agency and Cole is potentially a second superstar departure. Some have argued that the Soto situation should motivate the Yanks to keep Cole, just to stave of that possibility of losing two stars on the heels of a frustrating World Series loss. On the other hand, some have suggested that the Yanks might welcome having an extra $36MM of payroll space to use on luring Soto back to the Bronx.

The latter line of thinking would leave a big hole in the rotation, but it wouldn’t be an awful group without Cole. The projected rotation would still include Carlos Rodón, Luis Gil, Clarke Schmidt, Nestor Cortes and Marcus Stroman. If the Yanks let Cole go, they could focus on Soto and circle back to him later or pursue some other starting pitchers. They had reported interest in Blake Snell last winter and he is opting out of his deal, becoming a free agent again. The market will also feature Burnes, Jack Flaherty, Max Fried and plenty of others. Garrett Crochet, Erick Fedde and dozens of other could be available in trade.

It’s one of the more interesting decisions of the offseason. Most free agent contracts bring back the best returns in the early years and get more painful as the deals go along. The Yankees have a chance to walk away after the best years and perhaps avoid the downside. But doing so would mean letting one of the best pitchers in the league slip through their fingers. They have until Sunday evening to decide, per Bob Nightengale of USA Today on X.