How Giles and Blue Jays can use Phelps’ contract as framework to stay together

Charlie Montoyo tells the media that Ken Giles needs Tommy John surgery and gives an injury update on other members of the Toronto Blue Jays.

TORONTO — Once Ken Giles returned to the injured list last week with a right flexor strain, the Toronto Blue Jays immediately understood that they’d be without their closer for the rest of the season. Between the time needed for recovery and then to ramp up again, there simply wasn’t enough runway to get him back on the mound this year.

The loss for a bullpen desperate for his return to help shorten games was immense, especially amid the ongoing absence of Jordan Romano (finger pulley). Julian Merryweather’s trip to the injured list with elbow tendonitis further thins out manager Charlie Montoyo’s options.

Still, the personal cost to Giles didn’t come into focus until Monday when the 30-year-old decided to undergo Tommy John surgery. He’s likely to miss most, if not all of 2021 recovering from the procedure, severely undermining his first foray into free agency this fall.

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A strong, healthy season would have positioned Giles as one of the top relief arms on the market, alongside Liam Hendriks, Blake Treinen and Alex Colome. Last winter, Atlanta signed Will Smith to a $40-million, three-year deal while Drew Pomeranz got $34 million over four from San Diego in free agency, so there was an opportunity for a significant payday, even amid all the pandemic-caused uncertainty.

Instead, a dreaded limbo.

“It’s awful, there’s no better way to put it, it’s just a terrible situation,” said teammate Matt Shoemaker, another pending free agent who returned from a lat strain to throw three innings in Monday’s 11-5 win over the New York Yankees. “But just talking to him the last couple of days, more in depth once he got the final news, he’s in a good spot mentally. Obviously, when he probably first heard it, it wasn’t great. Just talking about what his plans are, what he’s going to do moving forward, he’s going to be more than OK.”

Focusing on his recovery is certainly one way to accomplish that, limiting the financial impact to one year in a market that could be restrained by the economic fallout of COVID-19. At the same time, there have been a handful of creative contracts for pitchers just coming off Tommy John surgery in free agency that offer an interesting potential pathway for Giles.

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One in particular, the Blue Jays’ deal with reliever David Phelps last year, presents the type of win-win framework that could benefit both player and club. Phelps, who was also coming off ligament-replacement surgery (although his was in the spring as opposed to the fall), received a $2.5 million guarantee, with his salary increasing in increments of $250,000 for appearing in 25, 30 and 35 games. His salary went up further in increments of $350,000 by appearing in 40, 45, 50, 55, and 60 games, with an extra $125,000 for finishing 25 and 30 games, and $250,000 for finishing 35 and 40 games.

In exchange for all that, the Blue Jays got a 2020 club option at $1 million that increased to $3 million if Phelps pitched in more than 30 games in 2019, $5 million if he appeared in more than 40, $7 million if more than 50, and $8 million if he reached the 50-game threshold along with 40 games finished. There was another set of bonuses determined by the number of games Phelps pitched in the first year.

Phelps ended up in 41 games between the Blue Jays and the Chicago Cubs, to whom he was traded at the deadline for Thomas Hatch, and the Cubs ended up declining his $5 million option. Still, the bonus structure ensured that Phelps would be fairly compensated for how much he pitched, while the club wouldn’t be on the hook financially if he wasn’t able to deliver.

Clever all around.

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“The free-agent process is interesting enough when you’re not hurt. When you are hurt it’s not an ideal situation,” Phelps said of his free-agent experience last spring. “Early on, teams were like, ‘Yeah, we’re interested, keep us posted on how he’s throwing.’ Then that interest just kind of stayed the same. From talking to other guys who were also in the market, kind of the same conversations, ‘We’re interested, keep us posted if anything happens,’ and the offers don’t ever come. We were ready to pounce as soon as we got something that was fair, and it’s certainly an interesting contract, but there’s protection on both sides.”

The setup and values would need to change for Giles given that he’s been an elite closer and he may not be able to pitch at all in 2021. But teams have made aggressive guarantees for starting pitchers coming off Tommy John.

The Cubs, for instance, gave Drew Smyly a $10-million, two-year guarantee in the winter of 2017 while a year later, the San Diego Padres handed Garrett Richards $15.5 million over two years. Smyly spent the whole first year rehabbing before he was traded to Texas and later released, while Richards made only three starts last year before pitching in 12 games, 10 starts, this year, logging 48.1 innings with a 4.28 ERA and 43 strikeouts.

Giles has said several times that he wants to remain with the Blue Jays, and he’s made a strong impression since arriving from the Houston Astros in the Roberto Osuna deal. He’s been a good teammate, a good presence and a strong performer, converting 38 of 39 save opportunities in 78 games, with a 2.83 ERA and 111 strikeouts against 25 walks in 76.1 innings.

“He was a great clubhouse leader. He was awesome. I love the guy,” said Montoyo. “When he was on the mound, when he was healthy, he was one of the best relievers in baseball. In the clubhouse, he was great with everybody. He was a great teammate. I don’t think people realize that about him.”

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There’s incentive beyond that for the Blue Jays to strike such a deal with Giles, as the way things stand, the asset has gone to zero on them after a trade with the New York Yankees died at the finish line just before the July 31 trade deadline in 2019. They kept him again this past off-season without extending him, believing that if they didn’t trade him at this year’s deadline, they could make him a qualifying offer if he performed well and collect a compensatory draft pick if he departed.

All that is out the window, now.

“It doesn’t benefit me to look too far into the future,” Giles said of his pending free agency on Sept. 12, right after he returned from the injured list. “Does it suck that (the injury) happened? Absolutely, because I wanted to repeat what I did last year, short season or not. Overall, I can’t whittle myself down to the ground, I can’t feel sorry for myself. You know what? I go out there and compete as best I can, and show that I’m healthy all the questions will be answered if I show them I’m healthy and get through the season in one piece, basically. I’ll let that stuff work itself out towards the off-season. As of right now, we’re looking toward the post-season and I’m going to do my best to compete for the guys.”

To his credit, Giles tried. It didn’t work out. Now both he and the Blue Jays are left trying to mitigate their losses, a path forward together staring them right in the face.

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