DODGER DEAL STILL ON HOLD.

Byline: Tony Jackson  Staff Writer

Dodgers pitcher Brad Penny, one of the principal players in a potential three-team trade with Arizona and the New York Yankees, told ESPN Radio on Friday that he possibly could undergo a physical examination for the Diamondbacks next week, a strong indication the widely reported deal is close to completion.

Meanwhile, the Dodgers have agreed in principle on a one-year contract with free-agent infielder Jose Valentin, a deal that isn't expected to be announced until next week. Valentin, a 13-year major-league veteran, will fill the third-base vacancy created Thursday when Adrian Beltre signed a five-year, $64 million deal with Seattle.

The Dodgers also have agreed on a new contract, probably for one year, with left-hander Wilson Alvarez, who filed for free agency after last season but has elected to stay in Los Angeles.

Penny made three starts for the Dodgers after he was acquired from Florida at the trading deadline, with each of the final two being cut short by a nerve injury in his right biceps. The trade as reported would send Penny to the Diamondbacks, along with Shawn Green, reliever Yhency Brazoban and possibly pitching prospect Brandon Weeden.

The Diamondbacks would then send five-time Cy Young Award winner Randy Johnson to the Yankees, who in turn would send right-hander Javier Vazquez and two top prospects to the Dodgers.

``It's pretty close to being done, from everything I understand,'' Penny told the radio network. ``There are still a few ways it couldn't happen. You have a couple of no-trade clauses. But everything's looking good. I think I'm going to take a physical next week if this goes through, and if that goes through, everything will be fine.''

Dodgers officials continue to decline comment on the potential trade - which isn't expected to be officially completed and formally announced until at least Tuesday, if at all - but general manager Paul DePodesta did say Friday he was unaware of any plans for Penny to undergo a physical for the Diamondbacks.

While the trade appears close to completion, it might be just as close to falling apart. Assuming the players involved have been agreed upon by all three clubs, there still are several hurdles to clear - including reports that a fourth team, possibly St. Louis, has gotten involved. The entire deal must be approved by the commissioner's office, and the more teams a trade involves, the more unwieldy it becomes and the greater the chance of it collapsing.

Johnson and Green have no-trade clauses, but Johnson is expected to waive his for a trade to the Yankees. Green's former agent, Jeff Moorad, is scheduled to take over as the Diamondbacks' chief executive officer in January. Green, who is entering the final season of a six-year, $84 million contract and due to receive $16 million, probably will want an extension before agreeing to accept a trade.

The Associated Press, citing an unnamed baseball source, reported that the Yankees plan to ask for a 72-hour window to negotiate a contract extension with Johnson. Theoretically, the Diamondbacks could seek permission to negotiate with Green during the 72-hour window, although it isn't clear when that window officially begins.

The passing of Monday's 9 p.m. deadline for clubs to tender contract offers to their players could touch off a flood of activity for the Dodgers, who freed up considerable payroll space by not re-signing Beltre and would free up a lot more by trading Green. The primary focus is starting pitching, and the club is believed to be in intense discussions with representatives for free-agent right-hander Orlando Hernandez.

The Dodgers also are believed to be pursuing free-agent right fielder J.D. Drew, who would be a solid replacement if Green gets away.

The switch-hitting Valentin is primarily a shortstop and last played third base in 2002. He figures to play most of the time at third for the Dodgers, although utilityman Antonio Perez probably will see more time at third than he did when Beltre was around.

Valentin, who has a career average of .243, received the same $5 million salary as Beltre earned last season. He will command a much smaller figure than the reported $17 million Beltre will receive in his first season with the Mariners, and the Dodgers won't be on the hook for another long-term contract. The Valentin signing means newly signed Jeff Kent can play on the right side of the infield, which club officials would prefer. Whether Kent plays first base or second base won't be determined until after the club completes its offseason maneuvering.

Alvarez, 34, shuttled between the rotation and the bullpen last season, his second with the Dodgers. He went 7-6 with a 4.03 ERA in 40 appearances, earning a base salary of $1.5 million. Since joining the Dodgers as a free agent two winters ago, Alvarez has revived what appeared to be a dying career after he missed all of the 2000 and 2001 seasons following shoulder surgery.

Alvarez probably will open the season in the bullpen, where he had a 2.44 ERA last season, but that could change if DePodesta isn't able to land another frontline starter. Before signing Valentin and Alvarez, the Dodgers have about $51.25 million committed to seven players for next season, with a $100 million payroll budget.

Tony Jackson,[phone]

tony.jackson(at)dailynews.com

CAPTION(S):

3 photos

Photo:

(1 -- color) VALENTIN

(2 -- color) Pitcher Brad Penny, right, might take a physical next week for Arizona, strengthening the chances of a deal getting done.

Lenny Ignelzi/Associated Press

(3) The Dodgers re-signed left-hander Wilson Alvarez, who can start and work out of the bullpen.

John Lazar/Staff Photographer