According to Andrew Baggarly of CSN Bay Area, the San Francisco Giants will not make a qualifying offer to free agents Angel Pagan, Melky Cabrera or Jeremy Affeldt. Marco Scutaro was acquired during the season, so he was ineligible to receive a qualifying offer.
Baggarly also reported that the Giants maintain interest in bringing back Affeldt, Scutaro and Pagan; though they aren't confident that they can keep Pagan.
Under the new Collective Bargaining Agreement (CBA), in order to receive draft-pick compensation for losing a free agent, a team must submit a qualifying offer to a potential free agent. The qualifying offer is a one-year contract offer for the average of the top 125 salaries, which is $13.3 million this season.
Due to Cabrera's suspension for PED use, it makes sense that the Giants wouldn't submit a qualifying offer to him because it isn't clear if he can get $13.3 million on the open market. Affeldt is a reliever, and relief pitchers just aren't worth that kind of money for one season.
However, in the case of Pagan, the Giants made a tactical error.
According to FanGraphs, Pagan was worth 5.4 Wins Above Replacement (WAR) in 2010 and 4.8 WAR last season. According to their calculations, that means Pagan was worth nearly $22 million in both of those seasons.
Pagan is almost definitely going to get offered a multi-year deal, which means he was likely to reject the qualifying offer and become a free agent.
Had Pagan accepted the qualifying offer, the Giants would have gotten themselves a bargain. A one-year, $13.3 million deal for a player that hit .288/.338/.440 with 29 steals from a premium defensive position last season is an absolute steal.
Major League Baseball is now even more flush with cash from new cable contracts, making it unlikely that the market will suddenly bottom out for a player as good as Pagan. Thus, Pagan wouldn't have accepted a one-year deal in all likelihood, so extending the qualifying offer was a low-risk move.
The potential rewards were the possibility that he would accept. The deterrent being that if he did reject it, a team that wants to sign Pagan would have to consider forfeiting a first-round draft pick in order to do so; unless they finished in the bottom ten in the overall standings.
If a team decided to sign Pagan anyway, the Giants would at least have received a compensatory draft pick between the first and second rounds of next year's draft.
In the end, the Giants can still re-sign Pagan, which they are reportedly trying to do.
He's an elite baserunner, a solid hitter who puts the bat on the ball and a good defensive center fielder by most metrics. His speed plays very well with the Giants given the spacious confines of AT&T Park. His gap power is well-suited to AT&T as well, which is partially why he hit 15 triples and 38 doubles last season.
However, there are concerns with giving a massive and long-term contract to Pagan. His only elite tool is his speed, and at 31 years old, that could go quickly. If he loses his speed, he could go from being a star to an average player in a hurry.
Pagan doesn't have a great swing or much patience, making him a somewhat inconsistent player.
His month-by-month OPS numbers from last season (.759, .884, .608, .553, 1.003, .749, .578 in postseason) show him to be a streaky player.
By extending the qualifying offer, the Giants would have created a deterrent for other teams who may want to sign Pagan, but who don't want to lose a draft pick. They also could have created the possibility of singing him to a one-year contract, which would have been an ideal situation.
The Giants should bring Pagan back, but by not extending him a qualifying offer, they've made the process of retaining him harder. If they lose him now, they won't receive a draft pick.
The best the Giants can hope for now is that he accepts a three- or four-year contract to stay in San Francisco.
Such a scenario isn't without risk given his age and inconsistency, but the Giants need Pagan more than he needs them, and they don't have any leverage left.