A's general manager Billy Beane has said all year that Zito likely will be out of Oakland's price range, and the ace recently received interest from the Rangers.
Payton led Oakland in batting average in 2006, but he has been seen as expendable because young slugger Nick Swisher could replace the 34-year-old Payton in the outfield. If Swisher moves to left field, where he started the 2006 season, Dan Johnson or prospect Daric Barton likely would move to first base.
Zito is a Type A free agent, and if he declines the offer, the A's would receive a first-round pick in the 2007 First-Year Player Draft from the team that eventually signs the southpaw. If Zito surprises many and accepts arbitration, the A's most likely would have to pay much more than $8 million -- his salary in 2006 -- for next season.
Zito first came up with the A's in 2000, and he hasn't missed a start due to injury while going 102-63. Zito went 16-10 with the lowest ERA (3.83) among the team's starters during the 2006 season. He had one win in the American League Division Series against the Twins.
Beane has said he will look to the market to replace Zito in the rotation. But the A's also have a number of pitchers in the bullpen who could contend for a starting spot in 2007, including Kirk Saarloos, Joe Kennedy, Brad Halsey and Chad Gaudin. Upcoming prospects for the spot include Jason Windsor and Shane Komine.
Under the new collective bargaining agreement rules, the A's can still negotiate with Payton for a new contract. Payton has drawn interest from at least seven teams, including Baltimore and Colorado. The Oakland Tribune reported the A's touched base with Payton's agent last week, but there's no urgency with either side.
Payton has been with five different teams since the middle of the 2002 season. Payton's .296 average in 2006 was his highest since 2003, when he batted .302 with the Rockies.
Payton entered the 2006 season as Oakland's fourth outfielder, but he emerged as one of the team's most consistent offensive contributors. He made a team-high 134 starts -- 51 in left field, 44 in center and 41 in right -- but he might have priced himself out of Oakland's range. Payton made $4 million last season.
The A's other free agent, Frank Thomas, was signed by the Blue Jays on Nov. 17.
Ryan Quinn is an associate reporter for MLB.com. This story was not subject to the approval of Major League Baseball or its clubs.