For some people this probably seems like a foregone conclusion: don't pick up Scott Baker's option. But I'm also curious about what you would do next, if you were Terry Ryan. The Twins will need talented starting pitchers next season, and when he's healthy he certainly checks that box.
Baker's option for 2013 is worth exactly $9.25 million dollars and can only be exercised by the club. There is no buyout penalty, so if the Twins decline the option they're free and clear of any financial considerations.
Next year's current in-house rotation options look something like this.
Nick Blackburn: $5.5 MM (plus 2014 option)
Scott Diamond: Pre-Arbitration
Cole De Vries: Pre-Arbitration
Samuel Deduno: Pre-Arbitration
Brian Duensing: Arbitration (Year 1)
Anthony Swarzak: Pre-Arbitration
Jeff Manship: Pre-Arbitration
Liam Hendriks: Pre-Arbitration
With those facts in mind, what would you do with Scott Baker?
Pick up his option: Pay Baker $9.5 million for 2012 in the hope that he regains his 2011 form.
Decline his option, attempt to re-sign: A single year deal? Multi-year deal with low annual payroll hit? Incentive-laden offers?
Decline his option, grant free agency: Allow Baker to walk away and focus your efforts elsewhere.