Madson would have made $11 million next year under the mutual option. Instead, he got a $2.5 million buyout. The Reds weren’t going to exercise the 2013 option. They've expressed an interest in signing him to a less-expensive deal and giving him a chance to continue his recovery.
The wild-card Baltimore Orioles exercised their $1 million option on reliever Luis Ayala but declined an $11 million option on first baseman Mark Reynolds, who gets a $500,000 buyout and is eligible for salary arbitration.
The Cleveland Indians picked up their $5.75 million option on pitcher Ubaldo Jimenez. Also, the team declined its options on designated hitter Travis Hafner ($13 million) and starting pitcher Roberto Hernandez ($6 million), formerly known as Fausto Carmona.
The Pirates picked up their option on third baseman Pedro Alvarez ($700,000) and parted ways with catcher Rod Barajas, who had a $3.5 million option. Pittsburgh also released reliever Hisanori Takahashi.
The Toronto Blue Jays exercised their $3 million option on left-handed reliever Darren Oliver and signed outfielder Rajai Davis to a one-year, $2.5 million contract after declining the option on his previous deal.
AP Sports Writers Ronald Blum and Howie Rumberg contributed to this report.