Days after reaching a preliminary agreement with the free agent pending a physical, the Orioles said Friday that they weren't satisfied with the results of Balfour's exam.
"This is a deal that's not going to come together," Orioles executive vice president of baseball operations Dan Duquette said on a conference call.
Duquette declined to say what specifically concerned him about Balfour, who turns 36 later this month. Balfour had shoulder and elbow surgeries that kept him out of the majors in 2005 and '06.
"The Orioles were disappointed we couldn't complete a contract with Grant Balfour," Duquette said.
Baltimore and Balfour came to a reported two-year, $15 million agreement with $1 million deferred on Tuesday, depending on the physical. Duquette said the team would not seek to restructure the agreement.
"We're going to turn our attention elsewhere for now," Duquette said.
The Orioles were hoping Balfour, who had 62 saves over the last two years for Oakland, would replace Jim Johnson. Baltimore traded Johnson, who had 101 total saves in 2012 and '13 to the Athletics on Dec. 2.
"Grant is completely healthy and that was told to us today by Dr. Koco Eaton, a well-respected club physician," said Seth Levinson, one of Balfour's agents.
Levinson said Reds team physician Dr. Timothy Kremchek "reviewed the Orioles' medical report and advised that he is remarkably impressed that there has been little change in Grant's arm for almost 10 years."
"The only reasonable conclusion is that Grant is healthy and the Orioles at the last moment changed their minds," Levinson said.
Baltimore could trade for a closer, sign another free agent or use an existing player. Duquette pointed out that Johnson did not come through the minors as a closer.
"The good news is we have other options to look at," Duquette said.
Besides Balfour, there are two other prominent free agent closers still available, Chris Perez and Fernando Rodney. Perez saved 123 games over the last four seasons for Cleveland, and Rodney saved 85 in the last two years for Tampa Bay.
Duquette said the team still hopes to make some moves.
"We're not done yet," he said.
Baltimore signed lefty-hitting outfielder Xavier Paul to a minor league deal. He was not offered a contract by Cincinnati earlier this month.
Paul batted .244 with seven home runs and 32 RBIs in 97 games with the Reds in 2013.