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12/14/10 1:51 PM EST

Seventh year deal-breaker for Lee, Rangers

Texas drew the line at six seasons in negotiations with lefty

ARLINGTON -- The Rangers could have had pitcher Cliff Lee back in their rotation next season, but they weren't willing to do a seven-year guaranteed contract with him.

Club officials said Tuesday they have reason to believe Lee would have accepted a seven-year deal to return to Texas. The offer was on the table and the Rangers walked away. That's why Lee will be pitching for the Phillies next year and the Rangers will have to settle for two compensation picks in the 2011 First-Year Player Draft for losing their No. 1 starter.

"It would have been a matter of saying yes on terms we weren't comfortable with," CEO Chuck Greenberg said Tuesday morning. "He was willing to be with the Rangers but it was beyond the aggressive parameters we were operating under. We didn't think it was in the best long-term interests of the organization.

"We were very aggressive and willing to step out. But along with being aggressive, we did not want to put this franchise back in a position where it was for a number of years before we bought it."

The Rangers went into the process not wanting to go beyond five years. They were willing to go to six years at $138 million (significant money deferred) and a vesting option, even though they were uncomfortable with the idea from the beginning. But they drew the line at going seven years.

"We were in regular contact," general manager Jon Daniels said. "We exchanged ideas and proposals, but we couldn't find terms that worked for our side. We knew what it would take and we weren't comfortable with that. We went as far as we were comfortable going.

"Our ownership stepped up. I can't fault anybody on both sides. They had three good offers from three contending clubs. They went to a place where they are comfortable with a chance to be in a potentially historic rotation."

The Rangers were under the impression that it was between them and the Yankees. But the Phillies became aggressively involved after the Winter Meetings and seemed to catch everybody by surprise Monday night.

"I was very surprised the Phillies came into the picture at that point last night," club president Nolan Ryan said. "I was under the impression that it was between us and New York. When we didn't hear from them over the weekend, it made us feel he was giving a lot of thought to coming back to us."

But Greenberg said that Lee brought up his experience with the Phillies in an early meeting with Rangers officials. The Phils acquired Lee from the Indians on July 29, 2009, and he was 7-4 with a 3.39 ERA in 12 starts for them, then won four more games in the playoffs. He beat New York twice in the World Series but Philadelphia lost in six games.

Lee was traded to the Mariners in the offseason and then acquired by the Rangers on July 9. He went 4-6 with a 3.98 ERA in 15 starts for Texas, plus two more over the Rays in the American League Division Series and one victory over the Yankees in the AL Championship Series. That put the Rangers in the World Series for the first time in franchise history, but they lost in five games to the Giants. Lee lost two of those games.

"We felt all along that if a third club jumped in ,it might be the Phillies," Greenberg said. "He had an experience there that was similar to the one he had with us. While we hadn't heard about the Phillies, they were in the back of our minds. We realized the Phillies had made a positive impression.

"If we had known the Phillies' intentions, we wouldn't have done anything different. We played hard and we played aggressively. It just didn't work out."

There is a possibility that it will eventually work out for the Rangers. Paying that much for any pitcher can be risky and the possibility exists that Texas will prove smart in walking away from the table. Maybe the two extra picks in next year's Draft will eventually be All-Stars.

But the Rangers were not rejoicing on Tuesday morning.

"We wanted to take the risk," Daniels said. "We felt it was a smart gamble. We're disappointed we don't have the player. Maybe down the road we'll look at this differently, but I don't want to paint this with that brush. I don't want to pretend we're happy or relieved. We wanted to sign the player."

T.R. Sullivan is a reporter for MLB.com. Read his blog, Postcards from Elysian Fields and follow him on Twitter @Sullivan_Ranger. This story was not subject to the approval of Major League Baseball or its clubs.