It’s tempting to wait for something you want. The question is how much waiting costs you.

In this case, that something is Carl Pavano. Pavano is certainly worth waiting for. He was the second best starting pitcher on the team, the team’s horse, and proved to be a super-powered Luigi, outdueling the likes of Roy Halladay and Johan Santana
It also looks like he might be more affordable than we might have thought. Originally, he looked like he would earn at least a 3-year, $30M deal. But the market for his services became a lot thinner once the Twins offered him arbitration and he turned it down. Faced with needing to give up a high draft pick to sign Pavano, the field has reportedly narrowed to:
-         Milwaukee (who says they won’t offer more than a 2-year contract),
-         Washington (who says they won’t offer a multi-year deal),
-         Texas (who everyone assumes would be interested if they lost out on Cliff Lee, but hasn’t pursued Pavano yet) and
-         your Minnesota Twins.
It seems increasingly likely that the Twins could re-sign him for just 2 years and $20 million. Or even $2/18 with a 3rd year team option that they can buy out for $2M? Either contract would be a bargain given his performance last year. And with an xFIP (a stat that is a better predictor of ERA than ERA) of 4.02, why shouldn’t he remain effective?

Geek Chorus: It’s not like the moustache from which he clearly derives his superpowers is going anywhere soon.
On the other hand, we found out yesterday what waiting for his price to come down can cost when Jesse Crain signed with the White Sox. It isn’t a surprise that Crain left – the Twins never looked like they were interested in paying the top-flight money Crain received. But it is also clear that the Twins are working within a fairly limited budget, and they aren’t spending that money until they have resolved the Pavano situation.

Geek Chorus: So what was ths cost exactly? Or is this more about what Crain "represents?"
The latter, and losing him and Matt Guerrier signals that the reliever free agent market is heating up. The Twins must address other needs. Their bullpen is almost completely empty. Their bench lacks any kind of real replacement and their starting lineup is filled with players that missed significant time last year. Nick covered this yesterday, and if there is one thing we’ve learned about the AL Central in this last decade, it is that the deeper team usually survives to go to the postseason.
I don’t have real strong feelings one way or the other on Pavano, even at a bargain price, but the timing is important. The high-end relievers are starting to sign, and that’s a market that the Twins can’t miss out on. There is an unbelievable amount of talent out there this year for relievers – a lot of it supplied by the Twins. It is a buyer’s market, and could allow the Twins to establish a strong bullpen for the next couple of years - if they don't miss out on it.
If Pavano really wants to come back to the Twins, and the Twins really want to have back Pavano, it’s time to supply him an offer with an expiration date. By the end of the weekend, we’ll start spending the money that we are offering you.
Personally, I might walk away now. Pavano is great, but he’s not the left-handed ace or right-handed power that should be the top two priorities this offseason, so I can’t justify spending limited money on him. This team signaled how strapped for cash they were when they traded away a pretty decent shortstop for two intriguing but marginal prospects. It will cost at least another $9M to sign Pavano, and that is $9 million that can’t be spent on filing several other needs.
In fact, it sounds increasingly like the Twins would need to trade away one of their younger cheaper starters to find room for Pavano’s salary in the budget. There is a reason why Kevin Slowey has been the subject of trade rumors lately, and it’s not just because the Twins would have six reasonable starting pitchers. They’re never been afraid of that in the past. It's because they would want to get the $3M he could make in arbitration off the books.
I also worry about giving a multi-year contract to a guy who was injured for so much of his career. It wasn’t just New York. This year was only the third time he had ever achieved 200 innings. And while in New York an orthopedic specialist diagnosed him with a hip dysfunction that led to one leg being longer than the other, which they thought was the root cause of all his back/elbow/shoulder problems. He's been reasonably healthy the last two years, but Twins fans who watched his exceptional year might not understand just how rare that was.
But I’ll say this: it’s a close call. If the Twins sign Pavano at a reasonable deal, and he performs anywhere near to what he did last year, the worse case scenario is that he’s a tradable asset next offseason. Best case? He keeps on rolling and finally lives up to the hype that surrounded him in his youth, when he was both a premier free agent signing and the guy who was traded for Pedro Martinez.
And so, neither is a bad option. What is critical is that the decision be made fairly quickly, so that if the money isn't spend on Pavano, it's spend while there are still other options available.