Under the terms of the agreement, the Phillies receive Cliff Lee and outfielder Ben Francisco from the Indians in exchange for prospects Jason Knapp and Carlos Carrasco, as well as Jason Donald and Lou Marson. The key for the Phillies was not including their prized prospect, Kyle Drabek. No cash will be exchanged in the deal.

Rosenthal and Morosi say the deal is great for both sides, as the Phillies get a much needed starting pitcher, the reigning AL Cy Young Award winner no less, as well as Francisco who can be a solid substitute. The Indians get a plethora of prospects, which is exactly what they were looking for if they were going to trade Lee.

Obviously, this has ramifications for other deals. Specifically, this hurts the Blue Jays bargaining position by quite a bit. The Phillies were the previous favorites for obtaining Halladay, and now that they are out of the race, it leaves Boston as the sole frontrunner, with the Rangers, Yankees, Dodgers and Angels with outside shots. Even worse for the Jays is that since the Indians have decided to get rid of Lee, it makes it easier for them to part with Victor Martinez too, who’s main suitor is, coincidentally, the Red Sox. So while the Jays still retain the best player on the trading block, they’ve lost a lot of their chips. If they really want to make a deal, don’t be surprised to them take the offer from Boston that they previously rejected.

In other news, the Mariners and Pirates swapped some players. Instead of being a seller, the Mariners actually were buyers this time around, picking up defensive shortstop Jack Wilson from Bucs in exchange for some minor league talent. The consensus is that the M’s will pick up Wilson’s club option, worth around $8 million, which the Pirates would not have been able to do. The Pirates also are on the verge of trading Freddy Sanchez to the Giants.

The Mariners seem to finally have decided that they will be sellers. While Erik Bedard’s status is in limbo due to his injury, I think the first move you’ll see will be for Jarrod Washburn, and I’ll bet the Yankees will snag him. The Yanks haven’t found the starter they’ve wanted yet, with Bronson Arroyo seeming to carry too much of a price tag, and when they previously asked about Washburn the M’s were unwilling to deal. Look for the Yankees to move quickly and get Washburn over the Brewers, who will likely be his other suitor.

Jason Stark twits that the Pirates are putting aside contract negotiations and willing to deal Freddy Sanchez and Jack Wilson. On SportsCenter today Stark said the Red Sox basically had a deal completed for Wilson earlier in the year but elected to hold off. Now that Jed Lowrie is back and having offensive woes, the Red Sox will probably try and revive the old deal for Wilson to get him as now a defensive and offensive upgrade on Lowrie. Who knows what this means for Lowrie and Nick Green. If so, this may get Bucs fans going again about being a Red Sox farm team, and rightly so.

On other Red Sox news, it appears the team is still considering Victor Martinez as an option, although they may not have offered Clay Buchholz as previously thought. The Rays too like Martinez, but are more focused on obtaining Cliff Lee in a deal that might involve the Mariners somehow. As eyes shift to Lee from Halladay, the Indians have said the asking price is high, probably costing almost as much as Halladay. Back quickly to the Rays, they are considering sending Scott Kazmir to the Angels or possibly the Mets (would be awfully ironic) or Tigers but I think its less likely considering they are trying to win now.

Finally over to Roy Halladay. The number of teams interested have dwindled, and the Phillies and Blue Jays have reached an apparent stall in negotiations over Kyle Drabek. According to one source, there are three teams still interested: Phillies, Rangers and Red Sox. The Rangers want Halladay, the question is can they do it financially. The Red Sox can do it, (via some combo of Buchholz, Bard, Bowden, Masterson) the question is whether they want to.

Therefore, it’s always best to start at the top, and that, of course, means Roy Halladay. J.P. Ricciardi said today that the likelihood of a deal has moved to “very slim.” Still interested teams are the Phillies, Rangers, Angels, Yankees, Red Sox. The holdup has been that the team most capable and needing of a deal, the Phillies, rejected the Blue Jays original offer which included Kyle Drabek and J.A. Happ, and then had their counter-offer (Happ plus four prospects not named Drabek) rejected as well, putting the parties at odds. The Rangers are still interested but have financial issues to worry about if they are going to get Halladay. If the Yankees want to make a deal they can try the route of taking on bad contracts (Vernon Wells) and Halladay instead of giving up top prospects, because they don’t have any really. They have said they will part with Joba Chamberlain, but not Chamberlain and Phil Hughes. If I’m the Jays, I forget about the division rivalry and send him to the Yanks, and then ship off Rolen, Scutaro and Rios if you can.

If Halladay is out of the picture, the focus turns to other pitchers on the market. The next-best being Cliff Lee. The Red Sox and Yankees don’t really need to overpay for Lee, but the Phillies and Rangers have said they are interested if they can’t get Halladay, and the Dodgers are increasingly interested since they feel like a Halladay deal isn’t going to happen. Interestingly, the Rays seem to be the biggest players for Lee, which is somewhat surprising considering how money-concious they are. It would put them in a better place to fight off either the Red Sox or Yankees for a playoff spot. Apparently, if a Rays deal for Lee is pulled off, it would be a three-way deal involving the Mariners.

The Mariners have their own players they may be selling in Erik Bedard and Jarrod Washburn. Bedard has drawn interest from the Phillies, probably more so than their interest in Lee. Obviously the cost for him has gone down. Bedard is an effective when he wants to be (it’s a contract year, so let’s say that’s a yes) and when he’s healthy. He conveniently enough just landed himself on the DL, bringing his value down. But if the M’s are still willing to deal him, he might be a lower-cost alternative that could pay off. Washburn has had a good season and the Brewers may be after him, as are the Yankees. I could see the Rangers and Rays going for him as well if they can’t land a bigger fish.

The Red Sox had two deals rejected for Victor Martinez. First was basically a straight-up deal for Clay Buchholz and the second was for Justin Masterson and Michael Bowden. I really don’t understand this. It doesn’t really seem like a great idea to give up such good prospects for a guy like Martinez who is iffy health-wise, but even if you’re going to, the Adam LaRoche deal makes no sense then. Furthermore, why would the Indians ever say no to either of these deals? They’re getting great prospects, with Buchholz being the Red Sox top prospect (considering Lars Anderson’s recent struggles). The Red Sox, among other teams, have also indicated an interest in Padres first basemen Adrian Gonzalez but it doesn’t look promising. Again, why get LaRoche if you want a bigger first basemen bat?

Lastly, the Twins are almost definitely going to make a deal for a new shortstop, as Nick Punto isn’t going to cut it. A’s shortstop Orlando Cabrera and Pirates shortstop Jack Wilson seem to be the top candidates. Either one would make sense. Marco Scutaro of the Blue Jays is also an option.