$7mm for AJP? Buh-bye ... it's been fun
While this is a very realistic outcome, the team will be mediocre again and would do nothing to make the team younger / closer to a WS....
Would completely re-build, keep Paulie around to retire here, keep a fan favorite. Get rid of Peavy, Youk, Dunn, Rios, Beckham, AJ, Gavin (dude is never going to be a winner) for whatever you can get back, even if you eat a bunch of their contracts, in the form of prospects / don't re-sign free agents like AJ. Keep DeAza and Dayan around, cheap fillers with some potential. Danks could be worth a lot at trade deadline next year, if healthy, keep him around unless a good off-season offer comes-in.
Sign Sale to a real contract extension. Moneyball the rest of the line-up. Build for the future. 2013 is a lost cause...