Theo can afford to be wrong.

That’s the bottom line.

In more ways than one.

Because Boston’s bottom line is considerably more lucrative than that of most other clubs in baseball – not including, of course, the ludicrously loaded with lucre Yankees of New York – Epstein can afford to overpay for underachieving players. He can afford to make mistakes that most other GMs cannot. And, when he makes a costly mistake – the most recent being Julio Lugo – the Red Sox, unlike the majority of teams, can afford to write it off.

It’s what makes evaluating Theo’s job performance as tricky as Lugo trying to field a hot grounder.

How good a GM is Epstein?

That’s the $122-million question. Which, by the way, happens to be the approximate amount of the Red Sox payroll this season.

The Red Sox have the second-highest payroll in the American League, although far behind the $201.5 million the Yankees are shelling out this season. Both clubs have actually reduced payroll – the Yanks down from the $209 million they spent last year, while the Sox are well below the franchise-record $143 million they spent while winning the World Series in 2007.

Speaking of the World Series, the Sox hadn’t won one since 1918 until, with Epstein as GM, they finally broke through in 2004. They now have won two championships in the last five years, and have qualified for postseason play in five of the six years since Theo took over prior to the 2003 season.

So, one might legitimately ask, how can it be said he’s done anything less than a stellar job, especially considering that the Boston farm system is stocked with talent, from Triple-A Pawtucket to the Single-A Lowell Spinners?

Here’s how:

The shortstop position has been problematic for Epstein since his gutsy deal that sent Nomar Garciaparra to the Cubs in 2004 and brought Orlando Cabrera and Doug Mientkiewicz to Boston.

The following year, Theo signed Edgar Renteria to a 4-year, $40 million, free-agent contract. Instead of a long-term solution at short, Renteria lasted just one season in Boston. He was traded to Atlanta, where the Sox picked up nearly one-third of his salary over the three remaining years of his deal.

Lugo was signed as a free-agent in 2007, the Sox luring him away from Tampa Bay with a 4-year, $36 million deal. He hit .237 that season, played in just 82 games last year because of injury, and this season lost his starting job to utility man Nick Green, who has only been holding down the position until Jed Lowrie got healthy.

Epstein, to his credit, didn’t hesitate to acknowledge that signing Lugo was a mistake.

“It was a free-agent signing that didn’t work out,” Epstein said after the Sox released Lugo last week. “We ended up paying for past performance, not current performance. Sometimes the best organizations make mistakes. It was a mistake and, as the decision-maker, that’s on me. We’ll move on, and we’ll make better decisions going forward.”

The Red Sox are, without question, one of the best organizations in baseball. And I wouldn’t hesitate to say that they make more good personnel decisions than bad ones. But, again, the huge advantage Epstein has is that he can afford to make mistakes.

J.D. Drew is the kind of ballplayer every team would like to have. But not at $14 million a year, which is what the Sox are paying him on a five-year contract that runs through 2011. He’s currently hitting .239.

If you’re Jason Bay, whose contract is up at the end of this season, it would seem that the minimum you ought to get in a multi-year deal is an average of $15 million a year.

Is there any question that Bay, whose 72 RBI and 20 homers rank him among the league leaders, is more productive, and more valuable, than Drew? Overpaying for one player certainly doesn’t justify overpaying for another, but it stands to reason that somebody – the Yankees, for example – will meet that lofty figure. And, if you’re Bay, how can you sign with Boston for less than fellow outfielder Drew is getting?

Then there’s the disabled Dice-K, for whom the Sox shelled out $103 million –– $51 million to obtain his rights, and another $52 million to sign him to a six-year contract that runs through 2012. After posting what may have been the least impressive, 18-3 record in baseball history last season, Matsuzaka is 1-5 this season with an 8.23 ERA, and has been on the DL since late June as a result of arm problems from throwing too much, too soon while pitching Japan to the World Baseball Classic title in March.

While, in relative terms, veteran pitchers Brad Penny and John Smoltz have been bargains at, respectively, $5 million and $5.5 million, the fact is that not many teams could drop more than $10 million on pitchers perceived as projects because of arm woes.

Although Penny is 6-4 for the Sox, his ERA is 5.02 and he hasn’t won a game in over a month. Smoltz, who wasn’t able to join the team until late last month, is 1-3, with an ERA of 6.31 in five starts, after having been rocked for three homers in Monday night’s loss to the Rangers.

Despite an 8-0 record against the Yankees, the Sox went into last night’s game in Texas tied for first with New York. With the trading deadline fast approaching at the end of the month, the focus is on Theo to make the moves that will keep Boston, if not atop the A.L. East – although that should be the goal – then at least in firm control of the wild-card spot.

The good news is that, in terms of money, Epstein and Sox can afford to make mistakes. The bad news is that, in terms of Boston making the playoffs again, Theo can’t afford to make a mistake in judgment now.

jdonalds@projo.com /401-277-7340