As a fan with an emotional interest in the Chicago Cubs, the handling of Kerry Wood is hard to take: The team announces last month they are parting ways with the most popular player on the team.

Everyone is disappointed, but some of us make peace with it because it will free up considerable resources to improve other areas of the team - and, hey, the Cubs get two draft picks once he declines arbitration.

But the Cubs ultimately decide not to offer arbitration, meaning they lose him for nothing.

Odd, on its surface. But, from a gambling and economic standpoint, it still makes sense, though it's not the optimal outcome one would have hoped for when all of this started.

First, the gambler's perspective: By offering Woody arbitration, the Cubs would be making a $10 million (estimated) bet that he would not accept. This was no sure bet, however, with Wood expressing a desire to stay and the changing economic conditions around the country generally and the Cubs and baseball specifically.

So, Jim Hendry and company had to ask themselves: Do we gamble on arbitration if a "win" means he declines arbitration (and the Cubs get two picks and free up salary) and a "loss" means spending roughly $10 million to keep Kerry Wood - and no left fielder (or trade for Jake Peavy, if that chatter is real).

At $10 million, the pot odds weren't good enough for the Cubs. They simply couldn't risk that he would accept and hamstring them in other pursuits.

Or, to borrow from "The Girl Next Door," the juice wasn't worth the squeeze.

Economically, it's much the same. Some are asking why the Cubs don't have $10 million for Kerry Wood but could have $20-$30 million over a period of years for an outfielder or tens of millions more for the remainder of Jake Peavy's contract.

Simple: The Cubs value those things more than one, two or three years of Kerry Wood.

I have $200 I'm happy to spend each month for DirecTV, but I don't have $150 a month for, say, theater tickets. Even though taking in a show would be nice, I must have my 200-some channels of home-based entertainment.

It's all opportunity cost:

Opportunity cost or economic opportunity loss is the value of the next best alternative foregone as the result of making a decision. ... Opportunity cost is a key concept in economics because it implies the choice between desirable, yet mutually exclusive results. It has been described as expressing the basic relationship between scarcity and choice. The notion of opportunity cost plays a crucial part in ensuring that scarce resources are used efficiently. Thus, opportunity costs are not restricted to monetary or financial costs: the real cost of output forgone, lost time, pleasure or any other benefit that provides utility should also be considered opportunity costs.

Still, it sucks that Kerry Wood will no longer be a Cub.

Labels: Arbitration, Chicago Cubs, Girl Next Door, Kerry Wood