Ryan has shown much better ability to manage these situations than Smith ever did.
I believe this is the correct path to take with Frankie (in this order):
1. Sign him to a team friendly extension. The Twins pitching problem is so extensive that they have to catch lightning in a bottle to fix it soon. If Liriano were to turn into a decent top of the rotation starter, this would be a huge step in solving the problem. Worth taking the gamble when you consider how few good pitchers are out there.
2. Trade him but only for a haul. There is no need to deal him "no matter what" - I don't get that mindset.
3. Keep him and offer the $12mil. If he takes it, we get another year to see what he can do, we gain a starter for next year which buys us some time for other pitchers to develop, etc. If he doesn't take the money, we still get a pick.