According to Buster Olney of ESPN.com, if (and when) Gallardo's deal with the Orioles does get completed, the deal would be worth about $40 to $45 million. Jerry Crasnick of ESPN notes that the deal still needs some "tweaks" before it can be completed.
Gallardo, who turns 30 later this month, spent 2015 with the Texas Rangers. He went 13-11 with a 3.42 ERA (124 ERA+) and a 121 to 68 strikeout-to-walk ratio (4.00 FIP) in 184 1/3 innings pitched. According to FanGraphs, he was worth 2.5 Wins Above Replacement.
The Orioles had been one of the teams connected to Gallardo this offseason, with the Rockies and Astros also showing interest at different points.
Baltimore's rotation could use some upgrades if they want to contend in 2016, but at what cost? Because he was given a qualifying offer from Texas, Gallardo has draft pick compensation attached to him. If the Orioles do sign him, then they will lose their 2016 first round pick (No. 14).
As of now, the Orioles' projected 2016 rotation includes: Ubaldo Jimenez, Chris Tillman, Miguel Gonzalez, Kevin Gausman, and Mike Wright. Last year, the unit posted a 9.3 fWAR, 18th in the Majors. Gallardo would be a definite upgrade there.
If the Orioles do sign Gallardo, that could lead them to pursue other available free agents. This could include Dexter Fowler, as the team would only have to give up their second round draft choice if they signed the outfielder. The possibility of a deal there remains to be seen.