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The Toronto Blue Jays will officially have a new designated hitter next season. The team has reportedly come to terms with free agent switch-hitter Kendrys Morales on a three-year contract.

The Blue Jays were among several teams connected to Morales earlier this week. He became a free agent after declining his half of an $11 million mutual option with the Royals. Obviously that was a smart move. Morales received triple the guaranteed cash as a free agent.

Morales, 33, hit .263/.327/.468 with 30 home runs in 154 games with Kansas City this past season. A year ago he put up a .290/.362/.485 batting line with 22 home runs in 158 games as the team's cleanup hitter during their run to the 2015 World Series title.

Here are three things to know about the Morales signing.

Kendrys Morales is heading north of the border. USATSI

1. There is no draft pick involved.

The Royals did not tender Morales the one-year, $17.2 million qualifying offer prior to Monday's deadline, so they will not receive a draft pick for losing him to free agency. The Blue Jays, on the other hand, will not have to surrender a draft pick to sign Morales. It's just a straight free agent signing. No draft pick involved.

2. The contract looks like fair value.

Baseball salaries are growing more and more with each passing year, and since this is such a thin free agent class, there was some thought teams would overpay players. There's nowhere else to spend the money, after all.

According to the ZiPS projection system, three years and $33 million for Morales is essentially market value.

The contract is not an overpay nor is it a bargain. It's fair value. Nice deal for both sides.

3. What does this mean for Encarnacion?

I suppose the Morales signing doesn't completely close the door on the Blue Jays re-signing Edwin Encarnacion, but it doesn't look good. Toronto could re-sign Encarnacion and play him at first base full-time. It is an option. He's not a great defender though, and at age 33, you'd rather not make him play 81 games on the turf at Rogers Centre either.

We'll see where the Blue Jays, who are also dealing with Jose Bautista's free agency, go from here. All things considered, it appears to be much less likely the team retains Encarnacion after signing Morales. They'd have to make the two coexist for three years, remember. Not one.