Sheets reportedly needs surgery.

According to Adam McCalvy and T.R. Sullivan of MLB.com: • Ben Sheets may need surgery to repair a torn flexor tendon in his elbow. • Texas and Sheets had an agreement "late last week" on a two-year contract, but when the tendon tear was discovered during Sheets's physical, the deal was called off. • The Rangers could still explore a deal with Sheets that would allow him to rehab with the club (sounds like the Jon Lieber scenario I proposed this morning), but Jon Daniels is "not optimistic at this point." • There's an issue as to whether Milwaukee would be on the financial hook for Sheets's medical costs going forward since he was employed by that club when he suffered the injury. The Brewers will probably argue that surgery was not objectively indicated when the season ended or else they wouldn't have offered the righthander arbitration (which I suspect he regrets declining at this point). I'm still hoping for a Lieber deal, with even more conviction now than before, since Sheets – apparently – no longer has the leverage of negotiating on the basis that he might not be sidelined at all in 2009. But this is a bad development, for everyone concerned.