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Although Frawley is yet to make a call on his future, it is widely believed he will exercise his free agency rights and head to either Geelong or Hawthorn.
To cover the resulting hole in its defence, Melbourne has begun talks with Merrett and Frost and are confident of getting both.
"The whole year we've looked at the situation, if James leaves the club we need to have someone to come in and play a key position role," football operations manager Josh Mahoney told SEN on Wednesday morning.
"Daniel Merrett was one name that came up, Sam Frost was another name.
"There's a number of guys out there we've been talking to that can potentially fill that role."
Merrett turns 30 in December, has played 171 games for the Lions and has two years remaining on his contract.
Lions talent acquisition manager Peter Schwab said on Tuesday that Merrett was exploring his options and the club would consider a trade "depending on what offers we get".
Frost is at the other end of his career, having just turned 21 and played 21 career games.
Mahoney said Melbourne was comfortable with its position.
"It's very early on in negotiations, but we'd like to think we're well placed for both of them," he said.
Mahoney said the Demons were also closing in on an agreement to land Collingwood defender Heritier Lumumba.
"Most people that have (been traded) of his age are around a second- to third-round draft pick, so that'd probably be what we end up with," he said.