According to Joel Sherman of the New York Post, Melancon's deal is for four years and $62 million. According to Jeff Passan of Yahoo Sports, Melancon can opt out of his contract following the second season.
In the contract, Melancon will earn $4 million in 2017, $10 million in 2018 and $14 million in both 2019 and 2020. So, if he decides to opt out, the contract goes form a four-year, $62 million deal to a two-year, $14 million deal in annual salaries. As part of the deal, Melancon will earn a $20 million signing bonus, $12 million of which will be earned up front and the other $8 million that will not be earned until the contract is up.
As for Melancon, the deal is a record-setting contract for a reliever. In terms of AAV, he'll earn $15.5 million per season, breaking the mark Mariano Rivera set from 2008 to 2012. MLBTradeRumors.com projected Melancon to earn $52 million over four seasons prior to the start of the offseason.
Even though Melancon's contract is a record setting deal for a reliever, it probably will not be for long. Aroldis Chapman and Kenley Jansen are both projected to earn more money than Melancon, with the former possibly pushing $100 million.
While Melancon is not Chapman nor Jansen, he still has a phenomenal track record.
In 2016, Melancon pitched 71.1 innings to the tune of a 1.64 ERA and a 65-12 K/BB ratio over 75 games. He saved 47 games in 51 opportunities for both the Pittsburgh Pirates and Washington Nationals.
In addition to San Francisco, the Nationals showed the most interest in signing Melancon during this offseason.