While $40 million sounds like a lot of money, this is a good deal for the Giants. Pagan has been an elite center fielder in two out of the last three seasons, and worth more than the $10 million average annual value on this deal.
Pagan, who will turn 32 next July, was a late-bloomer that didn't get a shot at a full-time starting job until 2010.
He broke out that season by hitting .290/.340/.425 with 11 home runs, 31 doubles, seven triples and 37 stolen bases for the Mets. According to FanGraphs' version of Wins Above Replacement (WAR), he was worth 5.4 wins that year.
He followed that breakout season with an injury-plagued debacle in 2011. He hit just .262/.322/.372, and the Mets dealt him to the Giants last off-season for Andres Torres and Ramon Ramirez.
Pagan returned to his 2010 form with the Giants last season by hitting .288/.338/.440 with eight home runs, 38 doubles, a league-leading 15 triples and 29 steals. He ranked as the fourth most valuable base-runner in the game last season and the sixth most valuable center fielder at 4.8 WAR.
Defensively, Pagan struggles to get good reads on contact, but he uses his speed to cover ground in center. The various defensive metrics were split on his performance last season.
Ultimate Zone Rating (UZR) rated him as exactly average, Defensive Runs Saved (DRS) had him slightly below average, but Baseball Prospectus' Fielding Runs Above Average (FRAA) ranked him as well above average.
We still don't have reliable fielding metrics to definitively measure defensive performance, but I was able to watch just about every Giants game last season. I view Pagan as a slightly above-average defender in center.
He goes back on the ball much better than he comes in, so he's able to take away extra base hits while allowing more bloop singles to fall in than the average center fielder. His throwing arm is just average.
If Pagan can approach the level of performance he displayed in 2010 and 2012 throughout the life of this contract, the Giants will be getting a bargain. FanGraphs values those two seasons from Pagan as being worth $21 million each in total worth.
However, Pagan's value is tied up in his speed, which makes this contract a bit of a gamble. He uses his speed to cover ground in center, steal bases, score from first on doubles, leg out infield hits and stretch his outfield hits into extra bases, boosting his slugging percentage.
Pagan was consistently timed out of the batter's box to first base at between 3.98 and 4.02 seconds, which is 80 speed on the 20-80 scouting scale.
When he loses some of that elite speed, he's going to lose a significant amount of his value. He has below average patience for a lead-off hitter, so he needs to maintain a high batting average to have an acceptable on-base percentage. If he can no longer leg-out infield hits, can he still hit .290?
Despite these concerns, this is a good gamble for the Giants to make. They had Pagan for all of last season, so they know more about him than the other free agent outfielders. They also don't lose their first round draft pick by retaining him as they would have had they signed Michael Bourn or B.J. Upton.
In light of what the Braves paid for Upton, and the fact that Pagan has been a player than Upton in two out of the last three seasons, this looks like a very good deal.
The Giants offseason priorities were to retain Jeremy Affeldt, Pagan and Marco Scutaro. They've now checked two of those boxes off their winter shopping list.
In the case of Pagan, they got a pretty solid deal.