The Cincinnati Reds are trying to make life difficult for the Philadelphia Phillies. With the free agent slugger weighing his options in free agency, his hometown Reds have emerged as a serious contender for his services, at least according to reports.

But aside from pursuing Schwarber, they were also busy on Wednesday night finalizing a deal to bring back closer Emilio Pagán. Per The Athletic’s Ken Rosenthal and C. Trent Rosecrans, Cincinnati and Pagan settled on a two-year, $20 million contract (subscription required), with an opt-out after the first year.

“The deal, which includes an opt out after the first year, is pending a physical. It is the first step by the Reds toward reconstructing their bullpen as they also continue their pursuit of free-agent designated hitter Kyle Schwarber,” The Athletic reported.

Reds’ Emilio Pagán signing gives them flexibility for Kyle Schwarber pursuit

But how does a bullpen signing connect to the Schwarber sweepstakes and the Phillies? With the Reds reportedly “serious” about signing Schwarber, who hails from just outside of Cincinnati in Middletown, Ohio, this new deal with Pagán provides them with payroll flexibility.

Even though Pagán’s contract is a two-year deal on paper, in truth it’s really just a one-year commitment, maintaining long-term flexibility for the Reds front office.

Murmurs of a possible return to Cincinnati started during the season, with Schwarber talking openly about returning to his childhood team to finish his career. The Reds even had him catch ceremonial first pitches from his dad and youth baseball coach at a game in August.

When news of the Reds joining the Phillies and other clubs in vying for Schwarber’s bat, nobody really took them seriously. Small-market teams like the Reds typically don’t spend enough to lure big-name free agents, even those who were childhood fans.

Unlike the Phillies, whose payroll topped $300 million this year, the Reds spent roughly $120 million in 2025. Right now, early in the offseason, FanGraphs projects their estimated luxury tax payroll for 2026 to sit around $130 million.

With reports that the Reds’ payroll will sit right around a similar level to 2025 next year, they really don’t have much wiggle room to sign Schwarber. That is unless they’re offering a back-loaded deal, maybe even with deferrals. That’s where keeping roster flexibility would become crucial to the bean counters.

Although, if the Reds’ goal is to bring in a big free agent like Schwarber and stay under the luxury tax threshold, they’re in good shape. They have plenty of space to work with. The first threshold for 2026 sits at $244 million.

Coming off a career season in which he hit .240 with a .928 OPS, 56 home runs and 132 RBIs, adding Schwarber to a young, dynamic lineup would give the Reds a giant boost in the NL Central. Not to mention having him playing in the hitter-friendly environment of Great American Ball Park 82 times a year.

Maybe the Pagán signing was just the first step in their plan to bring Schwarber home and deal a massive blow to the Phillies.