Right-hander Gerrit Cole has exercised the opt-out clause in his contract with the Yankees, according to Kiley McDaniel and Jeff Passan of ESPN on X. However, he hasn’t officially entered free agency yet, as the Yankees can cancel the opt-out by extending his deal by one more year at his current $36 million annual salary.
Cole initially signed a $324 million, nine-year contract with the Yankees in 2020, set at $36 million per season. Under the terms of that deal, he had the option to opt-out after five years, forgoing the final four years and $144 million. If the Yankees choose, they can counter the opt-out by adding a sixth year worth $36 million for 2029, effectively making it a $180 million commitment over the next five years. If the team opts not to add this year, Cole would then return to free agency.
In his first several years with the Yankees, Cole delivered the elite performance expected of him, pitching 664 innings from 2020 to 2023 with a 3.08 ERA. His strikeout rate was 31.1%, while he allowed just 5.9% walks and had a ground ball rate of 41.1%. He was credited with 15.4 wins above replacement (FanGraphs) during that period, ranking fifth among MLB pitchers. Cole won the American League Cy Young Award last season, finishing with a 2.63 ERA over 209 innings.
Originally, it seemed clear how things would play out: Cole would opt-out, and the Yankees would likely add the sixth year, committing $360 million over a decade. However, complications arose in 2024. Cole dealt with elbow inflammation in spring training, which forced him onto the 60-day injured list, although no structural damage was identified. He returned in mid-June and, after a shaky start with a 6.75 ERA in his first four outings, improved to a 2.67 ERA over his final 13 starts. His postseason was also solid, boasting a 2.17 ERA over five games as the Yankees reached their first World Series since 2009.
Cole’s durability is a key advantage over other veteran pitchers. He has logged nearly 2,000 innings in his career, significantly more than Jacob deGrom, who had just over 1,300 innings before signing his five-year, $185 million deal with the Rangers. However, Cole’s recent elbow issues might give the Yankees pause. Comparable contracts, such as Zack Wheeler’s three-year, $126 million extension with the Phillies and Max Scherzer’s $130 million over three years with the Mets, generally offer high annual salaries for shorter terms.
The Yankees are also weighing the potential free agency of Juan Soto, presenting a scenario where both Cole and Soto could depart. While retaining Cole could prevent the loss of two stars after a World Series loss, others argue the Yankees could redirect Cole’s $36 million salary toward keeping Soto. Letting Cole go would create a vacancy in the rotation, but the Yankees could still field Carlos Rodón, Luis Gil, Clarke Schmidt, Nestor Cortes, and Marcus Stroman. Alternatively, they could focus on other pitchers like Blake Snell, Corbin Burnes, or Max Fried, who are expected to be available.
This decision stands as one of the most intriguing of the offseason, given that most free-agent contracts yield diminishing returns over time. The Yankees now have the rare chance to avoid potential downside, though it would mean losing one of the game’s top pitchers. They have until Monday at 5 p.m. ET to decide, according to Mark Feinsand of MLB.com on X.
