The Padres have agreed to a four-year, $16.5MM contract with free agent left-hander Wandy Peralta, Ken Rosenthal and Dennis Lin of The Athletic report. The deal contains three opt-out clauses, meaning Peralta will have the annual ability to opt back into free agency. The agreement is pending a physical. Peralta is represented by The MAS+ Agency.
Peralta, 32, has been one of the steadiest relievers in the Yankees’ bullpen for the past several seasons. From 2021-23, the southpaw logged 153 innings and turned in a 2.82 ERA with a 21% strikeout rate, 10.2% walk rate and excellent 56.5% ground-ball rate. He’s also limited hard contact quite nicely, sitting in the 88th percentile (or better) of MLB pitchers in opponents’ average exit velocity during each of the past four seasons.
In 2023, Peralta had some uncharacteristic command struggles, as his walk rate jumped from 7.6% to 13.6%. He also plunked a career-high six batters — as many as he’d hit over the four previous years combined. Still, the track record is good, he kept his ERA below 3.00 even with the shaky command, and at 32 he’s younger than most of the other southpaws available. The Yankees reportedly had interest in retaining him, and the Mets were known to have some interest as well. Instead, he’ll head clear across the country and join a revamped Padres bullpen that has lost closer Josh Hader to the Astros but has added several interesting arms.
Peralta joins star NPB left-hander Yuki Matsui and star KBO righty Woo Suk Go as free-agent pickups for San Diego president of baseball operations A.J. Preller. The Friars also acquired Enyel De Los Santos in a trade sending Scott Barlow to Cleveland. That quartet will join right-hander Robert Suarez as he seeks a bounceback after a difficult 2023 campaign. Righty Steven Wilson is also locked into a middle relief role.
It’s almost unheard of for a reliever to sign a deal with three opt-out provisions, but Preller has shown a willingness to utilize opt-out clauses more than any executive in the sport as a means of luring free agents to San Diego. Both Matsui and Suarez have opt-outs in their five-year contracts (which is an extremely rare length for relief contracts as well). Recent offseasons have also seen the Friars grant opt-out clauses to Michael Wacha, Nick Martinez, Seth Lugo, Matt Carpenter, Manny Machado and Eric Hosmer (multiple opt-outs, in the case of Wacha and Martinez).
The frequent opt-out provisions are clearly a successful tactic in terms of reeling in free agents, but they’re also one of the main factors behind the Padres’ perennial roster churn. Moreover, the risk is rather clear from the team vantage point; if Peralta pitches well in 2024, he’ll likely opt back into free agency next season and turn the contract into a one-year deal. If he’s injured or performs poorly, the Padres will remain on the hook for what could quickly look like an undesirable contract. And, even if Peralta is pitching well this summer but the Padres fall from contention, the trio of opt-outs will sap much of Peralta’s trade value. Any potential trade partner will be wary of acquiring a player who’ll bolt for free agency at season’s end if things go well but is still guaranteed additional seasons if the trade pans out poorly.
The uncommon structure of the contract also succeeds in lowering the luxury tax hit for the Padres, who’d surely like to dip beneath the $237MM threshold and reset their penalty after soaring past last year’s tax barriers. The Friars have trimmed back much of their actual, bottom-line payroll but are still only about $22MM shy of that first-tier tax level after signing Peralta, per Roster Resource. That’s due largely to backloaded contracts for Machado, Matsui, Fernando Tatis Jr. and Jake Cronenworth.
Peralta’s addition provides a solid veteran arm to what looks like a volatile Padres bullpen. While all of Suarez, Matsui and Go are clearly talented, there’s a broad range of outcomes on each of the three as Suarez looks to put last year’s injuries behind him while Matsui and Go transition to North American ball after starring in their respective leagues across the Pacific. That’s key for the Padres, as is getting Peralta on an affordable yearly rate. While there’s ample downside because of the opt-outs, as previously discussed, the contract also creates the possibility of getting one year of Peralta at a highly affordable rate that wouldn’t have been otherwise feasible.
The lower salaries on the contract also leave Preller & Co. some additional wiggle room as they look to round out a top-heavy roster. The Padres have clear needs in the outfield and rotation, and they could also use another bat to bolster the corner/designated hitter mix. The Padres, though, were also looking to reduce payroll by as much as $50MM from last year’s $255MM mark. They’re currently at a projected $160MM. On the surface, that seems to leave ample room for further additions, but as already noted, the team is only a notable addition or two away from being right back up against the luxury threshold, which could prove instructive in forecasting the remainder of their offseason dealings.