The $105 million contract the Cincinnati Reds gave Homer Bailey before the 2014 season has turned into a $105 million gut punch, and the team may be reeling from it for a while.

The bad news came down late Friday morning. After making only two starts in 2015 due to a delayed return from elbow surgery, Bailey now needs a more serious operation. As the Reds announced, the 28-year-old right-hander is due for season-ending Tommy John surgery:

Bailey isn’t the first ace to need Tommy John surgery, nor will he be the last. But there is a bit of history going on here, as Jeff Passan of Yahoo Sports notes that he’s only the second $100 million pitcher to need the operation:

Apart from the history, there’s the reality of the situation for the Reds. And it’s not good.

Bailey only managed a 5.56 ERA in his two starts this season, but he was an above-average starter with a 3.61 ERA across 562.2 innings between 2012 and 2014. And on occasion, he was much more than merely above average. He tossed no-hitters in 2012 and 2013 and posted 31 starts of at least seven innings and no more than two earned runs.

In light of that, losing Bailey for the season is certainly a blow for the Reds. In the long run, it may even the killing blow. The 11-11 Reds might have been able to stay in the NL Central race had Bailey eventually regained his 2012-2014 form, but it’s hard to see that now.

There’s too steep of a drop-off in their rotation after Johnny Cueto, Mike Leake and rookie sensation Anthony DeSclafani. Their offense is riddled with inconsistency outside of the rejuvenated Joey Votto. And outside of Aroldis Chapman, Cincinnati’s MLB-worst bullpen is “Nope Nope Nope Nope” territory.

If the Reds do fall out of contention, it’s possible they could wave the white flag not just on the rest of 2015, but on subsequent seasons as well. 

The Reds have a farm system that could use some rebuilding, and they have several tradeable pieces that could help them do so. Cueto and Leake are both free-agents-to-be, and Chapman and Jay Bruce could also be made available with their contracts set to end in 2016.

Consider this your reminder that the Reds entered 2015 seemingly a mere push away from an all-out rebuild. Ultimately, Bailey’s injury could be that push.

Maybe things didn’t have to happen this way. Heck, it’s hard not to ask what might have been had the Reds not rolled the dice on Bailey last year.

Understand, the Reds didn’t make a mistake when they handed Bailey his six-year, $105 million extension in February 2014. It’s easy to say so in hindsight, but at the time, it was a fair deal.

Bailey had posted a 3.58 ERA across 417 innings in 2012 and 2013, and that ERA undersold how well he actually pitched. With escalating strikeout rates and improved command, FanGraphsFIP-based WAR ranked Bailey as the NL’s 12th-best pitcher in those two seasons.

And because 2013 was only his age-27 season, Bailey looked like a pitcher on the rise. The Reds thus had several reasons to hand him his nine-figure contract, and it wasn’t an overpay. Rather, it was fair market value.

But this isn’t to say there was no risk involved. While Bailey’s contract itself was fine, the Reds put themselves in a tight financial spot as soon as they filed it away.

Bailey joined Votto, Bruce and Brandon Phillips among Reds players who had been extended for multiple years at lofty prices. That’s a lot of big-money players for a small-market team like the Reds, and there was a possibility that so much guaranteed money would render the franchise unable to lock up other players.

Namely: Cueto and Mat Latos. Both were desirable long-term options at the time Bailey signed his deal, and the clock to extend both was ticking with the two of them due for free agency after 2015.

As Jonathan Bernhardt wrote for Sports on Earth, the Reds might as well have been waving goodbye to them right then and there:

 Unless they get a major new source of revenue (possible, given that the team’s TV contract is up for renewal in 2016) ,or drastically increase their budget from the $100 million range to the $150 million range — and this is only the second season the Reds have had being a member of the $100 million club to begin with — their payroll can’t sustain another large contract for a high-end pitcher while still providing for the rest of the team. That would mean that the Reds likely wouldn’t be choosing between Latos and Cueto; they’d be letting them both walk.

In the case of Latos, this has proved to be no harm, no foul. His own health betrayed him in 2014, and now Reds general manager Walt Jocketty looks like a genius for trading him to the Miami Marlins for DeSclafani, who has a National League-best 1.04 ERA and only recently turned 25.

Cueto, however, is a different story.

Because Cueto was coming off an injury-wrecked 2013 at the time Bailey signed his contract, it’s revisionist history to say that the Reds obviously made a mistake in not extending him instead of Bailey. All the same, Bernhardt was correct in his notion that when Bailey signed on the dotted line, Cueto was likely as good as gone.

Since the start of 2014, Cueto‘s been as good as any pitcher in the Senior Circuit. He’s racked up a 2.21 ERA in 280.2 innings and has four more starts of at least seven innings and no more than two earned runs than any other NL hurler. On a WAR basis, he’s been right there with Clayton Kershaw.

The Reds made a sincere effort to get something done with Cueto over the winter, but it’s no surprise that effort went nowhere. With so many expensive players already on the books, the Reds only had so much money to offer. And with free agency just months away, Cueto had no reason to settle.

Obviously, nobody can say for certain what the Reds would have done had they chosen not to extend Bailey. But it’s fair to wonder, what if?

Maybe the Reds could have extended Cueto to at least have a real ace for their currently bleak-looking future. Or maybe they could have taken Bailey’s money and invested it in smaller parts instead, building a team with a real chance to do something special before embracing a rebuild after 2015. Either way, maybe things would look a lot better in hindsight than they do now.

To note as much isn’t to wag a finger at the Reds for extending Bailey. It was a reasonable move at the time, and what’s happened in the subsequent year-plus shouldn’t change that perception.

But it was still a gamble. And if nothing else, today’s news is a reminder that when you gamble, sometimes you lose.


Note: Stats courtesy of Baseball-Reference unless otherwise noted/linked.

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