Merrill Kelly Rejected Padres’ 3-Year Offer in Free Agency for Unbelievable Reason

The San Diego Padres' three-year offer to right-handed pitcher Merrill Kelly was rejected by the right-hander because of the harsh tax implications in California, he revealed on Thursday.

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"They take too much money," Kelly said of California Thursday on Foul Territory. "The taxes over there are unbelievable."

Merrill Kelly reveals he had a three-year offer from the Padres on the table.

"It definitely made the decision to come back here a lot harder." pic.twitter.com/Da7oGkO7dv
— Foul Territory (@FoulTerritoryTV) February 26, 2026

The right-hander was originally coy about what team from California had made him an enticing offer, but he further explained that the drawback in San Diego eventually made a reunion with the Arizona Diamondbacks make the most sense in free agency.

"There was a team out in California, I think everyone can pretty much figure out who that was, there was a three-year offer guaranteed on the table," he said. "I don't think it's any secret how much money you get taken out of your pocket when you go to California.

"There was a lot of factors that went into the three-year deal, it was definitely enticing. It definitely made the decision a lot harder to come back here, but once Arizona got to the number that they did, it made a lot more sense to come back here."

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Merrill Kelly had a three-year offer from the Padres, but the tax implications were absurd enough that it made more sense to take the D'backs two-year deal. pic.twitter.com/z5c9JftGqi
— Foul Territory (@FoulTerritoryTV) February 26, 2026

The Padres had been linked to Kelly throughout the offseason as the team was searching for a starting pitcher to add to the rotation.

Before the Padres re-signed Michael King on a three-year, $75 million deal, president of baseball operations A.J. Preller made a competitive offer for Kelly. However, it appears San Diego missed out on Kelly because of the hefty tax implications that come with being in California.

Who is a lock for the Padres' Opening Day starting rotation?

This spring, the Padres are looking to fill the final two slots of their rotation. The three locks in the starting rotation are Nick Pivetta, Joe Musgrove and King.

The Padres' frontline starters are certainly strong, but the team does lack depth heading into 2026.

Both Musgrove and King present injury concerns while Pivetta will be looking to replicate what was by far the best season of his career last year. This is where Kelly would have played a key role for the Friars.

While the Padres missed out on the right-hander, it's never too late to count out Preller. He's added pitchers late in spring training before, including Pivetta and former Padre Dylan Cease, who he acquired in a trade just days before Opening Day.

The Padres are reportedly open to trade some of their relievers in order to bolster other areas on the roster. Perhaps, the front office could look to add to the rotation via trade.

As for internal options, Randy Vasquez appears to have the inside track in terms of earning one of the final two slots in the rotation this spring. Other candidates include Germán Marquez, Walker Buehler and JP Sears, among others.

For more Padres news, head over to Padres on SI.