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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.