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San Diego did complete one trade Thursday, getting outfielder Tony Gwynn Jr. from Milwaukee for outfielder Jody Gerut. Peavy hugged Gerut before he left for the Brewers.
The Padres, who lost 99 games last season and aren't expected to contend this year, have been cutting payroll. Peavy is to earn $11 million this season, $15 million in 2010, $16 million in 2011 and $17 million in 2012. The Padres have a $22 million option for 2013 with a $4 million buyout.
Padres general manager Kevin Towers said Peavy is aware of the situation.
"He's a very mature young man, Towers said. "He understands what's happening. I think he will handle it well."
White Sox chairman Jerry Reinsdorf has expressed concern about spending big money in the current economic climate. Several older, high-paid players -- including Jim Thome, Jermaine Dye, Jose Contreras and Octavio Dotel -- can leave after this season, and that would've freed up payroll for the most expensive part of Peavy's contract.
The White Sox are off to a slow start, but are expected to contend in the closely bunched AL Central.
"Having him in the rotation would be great," Guillen said earlier in the day. "He's one of the best in the game -- if not the best in the game, at least the National League. He's going to make our ballclub a lot better."
Had he accepted the trade, Peavy would have anchored a strong rotation along with Mark Buehrle. Instead, he's scheduled to take the mound Friday against the Cubs.
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