Ted Lilly finalizes Dodgers deal

LOS ANGELES -- Veteran left-hander Ted Lilly effectively gave the Los Angeles Dodgers a hometown discount in agreeing to terms on a three-year, $33 million contract, a deal that was finalized Tuesday. Lilly, who could have filed for free agency early next month, opted not to test the open market because of his strong desire to remain with the club that originally drafted him in 1996 and reacquired him at last summer's trading deadline.

"I knew that I would prefer to stay here," Lilly said. "I thought this was a really good opportunity for me to be with this club and that the future looks really good. Fortunately, the Dodgers had interest in bringing me back, and I feel very grateful for the opportunity to be able to play here. Now we have this out of the way, which is nice because those aren't the things I want to be thinking about. I want to be preparing for the upcoming season."

Lilly's contract, at least in terms of average annual value, means a raise of just $1 million a year over his previous four-year, $40 million deal, which he signed with the Chicago Cubs in December 2006. That contract, which was heavily backloaded, actually paid him $12 million each of the past two years.

Lilly will never know now what he would have commanded on the open market, and Larry O'Brien, Lilly's Laguna Hills-based agent, conceded that his client might have passed up a bigger, better deal to remain with the Dodgers.

"I think there could have been more lucrative contracts out there if we went down that road," O'Brien said. "But I think Ted initially signed with the Dodgers in '96 and was disappointed about being traded [to the Montreal Expos in 1998, when Lilly still was in the minor leagues]. I think he kind of felt there was some unfinished business here, and he has come full circle. I think he is really happy with the opportunity to take care of business.

"Yeah, I think there probably was maybe something from a dollar standpoint out there ... but [Dodgers general manager] Ned [Colletti] came out of the gate here and put his best foot forward and was honest and forthright. ... He knew Ted's desire to stay, and he knew there was an opportunity to get something done prior to Ted becoming a free agent. He stepped up and offered something that was fair and equitable, and it was a win-win."

The Dodgers acquired Lilly from the Cubs on July 31, and he paid immediate dividends, winning each of his first five starts at a point when the Dodgers still were on the fringes of the playoff race. But as the Dodgers faded, so did Lilly. He wound up going 7-4 with a 3.52 ERA after the trade and finished the season 10-12 overall despite a 3.62 ERA, largely because of a lack of run support both before and after the trade.

The fact the Dodgers signed Lilly so quickly, agreeing to terms less than two weeks after the end of the season, would seem to be an indication embattled owner Frank McCourt is serious about increasing the player payroll even as his ongoing divorce and the court dispute with his estranged wife, Jamie, over her claim of partial ownership of the team remains unresolved.

Colletti said he has been given a player-payroll budget for 2011, and while he declined to specify what it is, he did say it is more than what it was at any time in 2010. The Dodgers began the 2010 season with a player payroll of about $83 million and ended it at somewhere between $85 million and $90 million.

"We know where we're going, and it's up from a year ago," Colletti said. "At this point, that is all I want to tell you."

By signing Lilly, the Dodgers assured themselves of returning at least 60 percent of their starting rotation from last year because Clayton Kershaw and Chad Billingsley remain under club control, and Colletti said Lilly's experience and influence over those two pitchers was a major consideration in the club's desire to re-sign him.

There are two other potential free agents from this year's rotation in Vicente Padilla and Hiroki Kuroda, and Colletti said he was prohibited by a new rule agreed upon by Major League Baseball and the Major League Baseball Players Association from commenting on the club's possible interest in re-signing either of those two pitchers.

Without mentioning any specific player, though, Colletti said he hoped to make offers to some other potential free-agent players before they become eligible to file for free agency after the end of the World Series.

Lilly, 34, who was born in Torrance but grew up in the Northern California town of Oakhurst, will receive a $3.5 million signing bonus to be paid out over the life of the contract, O'Brien said. O'Brien added that the remaining $29.5 million is weighted toward the back end of the deal but only slightly so. O'Brien and Colletti also said the deal grants Lilly complete no-trade rights in 2011 and 2012.

Despite the current state of dysfunction in the Dodgers organization, Lilly said he saw enough in his two months with the club to convince him he wanted to stay.

"Obviously, with the ownership, I believe that is getting ironed out," he said. "When I say that, I believe that for one, we have incredible backing from our fan base. I like the talent that is in the organization. I saw the way things are done here, and it wasn't hard for me to want to be a part of this. I live here in California, but I have traveled so much in my career that that certainly wasn't one of the things that led me here necessarily, just to be here. I just believe this organization can do something special going forward, and I have a great desire to be a part of that, and I want to contribute to [it]."

The Dodgers originally drafted Lilly in the 23rd round in 1996, then traded him to the Expos two years later in a seven-player, trade-deadline deal that brought pitcher Carlos Perez and infielders Mark Grudzielanek and Hiram Bocachica to Los Angeles. They reacquired him exactly 12 years later, along with second baseman Ryan Theriot, for infielder Blake DeWitt and two minor leaguers.

Tony Jackson covers the Dodgers for ESPNLosAngeles.com.