Peavy trade talks over

LAS VEGAS -- The Deal That Never Was will never be.

The San Diego Padres and Chicago Cubs called off their much-ballyhooed Jake Peavy talks Thursday morning, after Cubs general manager Jim Hendry informed Padres GM Kevin Towers he just couldn't justify giving up what it would take to get Peavy right now.

"Kevin and I spent a lot of time together," Hendry told ESPN.com. "This was something I felt we had to look into. Even though we felt very good about our pitching staff, I think the world of the pitcher, so we took the opportunity to see if we could make it work.

"Kevin and I had a lot of very healthy, very honest discussions. But at the end of the day, we had to do what was best for the organization. I just felt like when I weighed the total value of the talent going out against the economics of what was coming in, it was in the best interests of our organization not to make this deal."

Even if the teams had been able to agree on the players, however, Hendry said there were money complications that would have been tough to overcome. Peavy is owed $63 million over the next four years, with a 2013 option that could bring his total contract to $81 million.

So the Cubs explored moving pitcher Jason Marquis and discussed also trading second baseman Mark DeRosa in an attempt to clear enough payroll room to take on Peavy and to leave room for the team to afford a left-handed-hitting outfielder.

But the Cubs weren't able to make those moves this week, either. And "it wasn't just the salary of the one player coming in," Hendry said. "We would have had to spend money to replace the player or players we lost."

So knowing that the Padres had established a Thursday deadline for determining whether a trade was there to be made, Hendry sought out Towers on Thursday morning before the Rule 5 draft and informed him it wasn't going to work.

"He said he's got other things going on," Towers told reporters after the draft. "I respect his position."

Hendry said he made the decision late Wednesday night.

"Last night, I kind of took some time and went through the whole thing myself," he said. "And I just decided that for the volume of talent we would have had to give up, it just wasn't in our best interests as an organization."

So the Cubs will now move on to pursue that left-handed hitter they've been chasing. They've spoken to the agents for free agents Milton Bradley, Raul Ibanez and Bobby Abreu. They've also explored potential deals for right fielders such as Florida's Jeremy Hermida and Kansas City's Mark Teahen.

Despite losing out on Peavy, they might not make any more moves to address their rotation, however. They've looked into free agent Randy Johnson. But Hendry said they may just go with what they've got.

"We're fine," he said. "We've got Sean Marshall. We could get [Jeff] Samardzija ready to start. We've still got Marquis. So we've got options."

The Padres, meanwhile, are expected to pull Peavy off the market. The Los Angeles Times reported that the Angels may have interest. But Towers was noncommittal, telling reporters he would have to confer with Padres CEO Sandy Alderson and Peavy's agent, Barry Axelrod:

"I would imagine when we get back to San Diego, we'll sit down with Sandy and talk to Barry and see how we want to handle it moving forward," Towers said.

Peavy will earn $11 million next season. And that's a difficult salary to absorb for a team trying to cut its payroll to just north of $40 million. But Towers said earlier in the week he would just have to take a different approach to filling his club's holes if Peavy wasn't dealt.

"That will be tough," Towers said. "That's almost a quarter of our payroll. And it makes it tough to improve a great deal on the field. But I still consider Jake to be a tremendous asset. He's one of the best pitchers in the game. I'd much rather go into the season with a guy who's an established No. 1 [starter], and hopefully our young players are as good as we think they are, and improve that way, versus doing a poor baseball deal just because he's making a quarter of our payroll."

Jayson Stark covers Major League Baseball for ESPN.com.