The compensation the Cubs will send to the Red Sox for Theo Epstein has been going on for seemingly ever. It’s now in Bud Selig’s hands and he’ll soon rule on what the Cubs have to give the Red Sox. Apparently the Sox still want something significant, but as has been said time and again, there’s no precedent for a significant package in this type of situation. When Andy MacPhail left the Twins for the Cubs the Twins received 2 mediocre prospects. The Red Sox have insisted all along that they will receive a significant value in return. At one time, and perhaps still, they wanted Matt Garza. That’s not going to happen. It never was going to happen.

At first I thought Brett Jackson or Trey McNutt might be the guy sent to Boston. That was based on the player the Red Sox had agreed to send the A’s for Billy Beane several years ago. That player was Kevin Millar Kevin Youkilis. Although Youkilis was not the highly ranked prospect that Jackson is, the numbers in the minors were in some ways similar. Youkilis got on base more, but hit for less power. He was a little older than Jackson too. Brett Jackson won’t be going anywhere though.

I still wouldn’t be surprised to see Trey McNutt involved. McNutt was highly thought of entering last season, but after a series of blisters and a baserunning collision his numbers weren’t nearly as good as the previous years. He’s not ranked in mlb.com’s top 100 prospects. He’s more than likely not going to be ranked in Baseball America’s either. He’s still young and the Cubs would much prefer to keep him so they won’t be happy if they give him up.

Based on the bashing the Red Sox did of Theo Epstein shortly before he left I can’t imagine that helps their case too much. If what they said is true then perhaps Selig should give them Alfonso Soriano and his contract. That’s the type of compensation package I’d love.

It was mentioned awhile back that the Cubs and Red Sox could use the compensation if the Sox were to trade for Matt Garza. Maybe the Cubs throw in another low-level prospect at no cost or the Red Sox give up a little less in return. That’s not going to happen at this point.

Selig said Friday night he’d like to have it done as quickly as possible. He said he gave the clubs more latitude in hopes they’d reach an agreement, but they couldn’t. Selig said now it’s his decision and that’s OK, all part of the job.

Levine is essentially saying that the two clubs are no longer even discussing this and it’s all up to Selig. Selig made some comment recently that were similar to this. As a result, the compensation will be a player or two going to Boston. The Sox could still go after Matt Garza if they wanted, but that’s probably not going to happen given the asking price.

Speaking of Garza, I was doing a little more thinking about the arbitration values the two sides exchanged. The Cubs offer was $7.95 million and Garza asked for $12.5 million. It’s interesting because there’s such a large difference between the two figures.

The Cubs offer was ridiculously low. Garza received a raise of $2.6 million last year after a league average season in 2010. He wasn’t significantly better than that in 2009 either. In fact, Matt Garza hadn’t really been that good a pitcher until 2011. Despite that, he still received that $2.6 million raise. It was his second year of arbitration and since he’s a Super 2 he’ll have 4 of them. Assuming the player doesn’t fall off a cliff players are paid more each time through arbitration. Garza earned $5.95 million last year so the Cubs only offered a raise of $2 million. That’s more than half a million less than the raise Garza received after being average in 2010.

Was Garza’s offer too high? Let’s say Garza was a free agent and you were going to sign Garza for 1 year. How much would we pay? Off the top of my head I’d go with about $15-17 million. I’m fairly confident he won’t be nearly as good as last season, but I’m also confident he’s a better pitcher now than he was prior to joining the Cubs. I think 3 to 3.5 WAR is more than reasonable and probably a lot lower than many other fans are expecting. At $5 million per win that’s $15 to $17.5 million.

I also wonder if the discussions the Cubs have had about trading Garza this offseason can or will factor into an arbitration hearing if it goes that far. It’s plainly clear the Cubs think Matt Garza is an ace and that he’s a rare talent. Theo has said so several times. If this can be used in an arbitration hearing Garza’s representatives could easily talk about ace-caliber starters and their contracts. I don’t know for sure if this can be discussed, but if you think about what these aces are being paid, it’s more than the $15-17 million I’d give Garza for one year if he was a free agent.

Furthermore, the Cubs have asked for way too much in a trade. I can’t help but think this is relevant information to determining how much a player should be paid. It may not be allowed in a hearing, but it should be. This is the best evidence we have of how much the Cubs value Matt Garza. It’s clear the Cubs value Garza highly. It’s even clear they value him more highly than the $2 million raise they offered.

But arbitration is about picking one of two numbers. The reason I started thinking about this again is because the difference between the two figures might lead to an extension. For awhile now I’ve been thinking if the Cubs signed Garza to an extension it would be at least a 4 year deal and perhaps as many as 6 years. Tim Lincecum was signed to a 2-year deal last week buying out his remaining arbitration years. The Cubs could do that with Garza.

I actually think they will. I think the big difference between the figures submitted hints at that. The Cubs can’t take the chance that Garza earns $12.5 million next year. If he had a decent season next year he’d earn close to $16 million in 2013. If the Cubs wanted to trade Garza at that point he’d have very little trade value. It was obvious this offseason that the Cubs aren’t yet interested in signing players to contracts for more than a few years.

If the Cubs were to sign Garza for two years the Cubs could still trade him rather easily. The question is how much is he worth over 2 years? Let’s say he’s a 3.5 WAR pitcher in 2012 and the win value is $5 million. The WAR decreases by .5 the following year and the win value increases by 5%. Over 2 years he’d be expected to provide 7.5 WAR. That’s $38.4 million in value. Factoring in arbitration that would be a 2-year deal for $26.9 million.

That’s not what the Cubs are going to sign him to though. If Garza wins arbitration this year he’d earn $12.5 million and then maybe $16 million next year for a total of $26.5 million. If the Cubs were to win arbitration they’d pay him $7.95 million this year and about $12 million the following year for a total of $20 million. Split the difference and call it a 2-year deal for $23.25 million.

The Cubs would retain about $15.15 million in surplus trade value, which is almost exactly what we estimated it would be based on earning $8.7 million in 2012. Assuming the Cubs and Garza meet somewhere in the middle they’d pay him $10.2 million next year and about $15 million the following year. If that happened the surplus trade value would be about $2 million less.

Signing Garza to a 5-year extension doesn’t make a lot of sense in my opinion even if you think he’s better than the projections. Signing him to a 2-year deal keeps his cost down and the Cubs retain almost all of his previously estimated surplus trade value.