Dave Cameron of FanGraphs sums up that argument by writing:
But, if both sides are willing to stipulate that the Giants could have spent $90 million on other baseball players this winter if they hadn’t signed Hunter Pence, then I think there’s a pretty strong case to be made that they could have done better going in another direction...Pence’s new deal won’t stop the Giants from winning, so long as they surround him with quality players on undervalue deals...That’s not the easiest thing in the world to do, though, and now that they’re committed to paying Pence $18 million per year for the next five years, their margin of error just got a little smaller. This isn’t the Ryan Howard contract, or even the Barry Zito contract, but for a team without unlimited resources, spending too many of them on a good-not-great player on the wrong side of 30 could end up looking like a mistake.
While Cameron makes some interesting points, the reality is that the San Francisco Giants had to keep Pence, regardless of the cost.
The cost was going to be somewhere in the range of Nick Swisher's four-year, $56 million deal and Andre Ethier's five-year, $85 million deal. Swisher, Ethier and Pence are comparable players. Thus, Pence's market price was going to be somewhere on that spectrum.
The Swisher contract would have been a better deal for the Giants, but they could not afford to let Pence get away. He wasn't willing to settle for that contract, so San Francisco had to up their offer to keep him.
They went into the winter already needing to drastically upgrade in left field. If they had let Pence hit the open market, they would have potentially needed a new right fielder as well.
There just isn't enough talent on the free-agent market to realistically expect the Giants to be able to replace Pence and find a left fielder in the same winter.
Carlos Beltran, Jacoby Ellsbury, Shin-Soo Choo, Curtis Granderson and Nelson Cruz are the only impact bats on the free-agent outfield market.
The Giants could have let Pence walk and tried to sign two of those players to play right and left field. However, there's no guarantee that they could have signed any of those guys. By re-signing Pence before he could hit the market, the Giants have avoided creating another hole on a roster that already has plenty.
The starting rotation finished with the game's seventh-worst ERA despite the spaciousness of AT&T Park. The offense finished 21st in runs scored. The club finished just 20th in defensive efficiency. This team clearly needs to improve in every facet of the game.
The Giants could have held firm and told Pence to take the Swisher deal or leave it. However, the deal they gave Pence amounts to one extra year and four extra million dollars per season over what Swisher received last winter. For a big-market team like the Giants who sell out every game, holding the line for that amount of money just isn't necessary.
In 2013, Pence led the Giants in home runs, RBI, slugging percentage, extra-base hits and stolen bases. If the Giants had lost Pence, a bad offensive team would have been without one of its best hitters going forward. They could have tried to replace him, but there's no guarantee they would have been able to do so.
The other point against Cameron's argument is that Pence was worth 5.4 wins above replacement in 2013. According to FanGraphs, that means he was worth $27.2 million to the Giants.
This was the best season of Pence's career, so he isn't like to be a five-win player going forward. However, he has been a three-to-four win player throughout his career, and that makes him worth close to the $18 million San Francisco will be paying him.
The Giants could have waited things out for Pence and risked losing him. They could have told him what they believed his market price to be and waited for him to capitulate. However, the risk in that scenario would be to lose Pence in free agency and then be unable to replace him with a player of equal value on a lesser deal.
The Giants received a league-worst five home runs and .651 OPS from their left fielders in 2013. They need to improve that spot this winter, but there's no guarantee that they'll be able to sign an upgrade or trade for one. Had they lost Pence, they'd be in big trouble in two important offensive spots.
The bottom line is that there just isn't enough offensive talent to go around. Offense is down around the sport, and the best players are continually signing long-term extensions before they hit free agency.
The Giants farm system is extremely light on positional talent. They had no in-house option ready to take over for Pence, and they would have been hard-pressed to find a replacement this winter.
Did the Giants overpay for Hunter Pence? Based on his performance in 2013 and the Ethier contract it looks like a fair deal. However, even if they did overpay by a few million dollars per season, they absolutely had to keep Pence.