One of six remaining Reds eligible for arbitration this offseason, Bailey made $5.35 million in 2013. There were contract talks with Bailey's representatives before the holidays.
"He would be probably the one guy that's going to be the most difficult because of how well he's done and where he's at in this service class," Reds general manager Walt Jocketty said. "Young pitchers are getting quite a bit."
After a slow start and some injuries early in his career, Bailey put together his two best seasons in 2012 and '13. In '12, he was 13-10 with a 3.68 ERA, a career-high 33 starts while striking out 168 in 208 innings. That included a Sept. 28 no-hitter against the Pirates.
Last season, Bailey was 11-12 with a career-best 3.49 ERA in 32 starts and achieved career bests in innings (209) and strikeouts (199). On July 2 vs. the Giants at Great American Ball Park, he threw his second no-hitter.
During the Winter Meetings, Jocketty said he told clubs he was not interested in trading Bailey because the Reds wanted to sign him. Even if they can't sign him long term, there are still benefits to not dealing him ahead of free agency. The primary reason is Cincinnati is trying to contend for the National League Central title again and the rotation is better with Bailey than without him.
On the flip side, the Reds have other needs on the offensive side and Bailey would make for an attractive trading chip.
If Bailey is not dealt and signs only a one-year contract, the Reds are sure to make a qualifying offer next offseason that would net them a first-round compensation Draft pick in 2015 if he were to sign elsewhere.
Bailey is represented by the Excel Sports Management, headed by agent Casey Close.
The Reds have five other arbitration cases pending -- closer Aroldis Chapman (first year), outfielder Chris Heisey (second year), right-handed starter Mike Leake (second year) and right-handed relievers Sam LeCure (first year) and Alfredo Simon (second year).
The deadline for eligible players to file for arbitration is Jan. 14. Players and clubs exchange salary figures on Jan. 17 and arbitration cases for all eligible Major League players are slated to be heard from Feb. 1-21.
Cincinnati has a long track record of avoiding hearings with its players and hasn't experienced one since 2004. While one-year deals are all that's needed to avoid arbitration, it's possible that there could be some multiyear signings. But there hasn't been much movement yet on that front.
"At this point, we really haven't discussed anybody but Homer to sign long term," Jocketty said. "Homer is the only one we've pursued, but we've had internal discussions on the other guys. We just have to see how it all fits in, financially."