The San Diego Padres organization has experienced an unprecedented level of success over the past six seasons. They have been to the playoffs four times in six years as well setting back-to-back-to-back attendance records at Petco Park for the past three years.
AdvertisementAdvertisementAdvertisementFrom the payroll peak of $255 million in 2023, the Padres have operated on less payroll but without losing their ability to compete in MLB. The investment of late owner Peter Seidler, along with his ownership partners, has elevated the organization to a competitive level no Padres fan has seen before.
The fans of San Diego have repaid that investment by making Petco Park a top venue in the MLB, one that is considered a hostile environment for visiting teams as well as a welcoming home for Padres players. The beauty and entertainment value of the ballpark is a contributing factor to the ability of the team to keep its payroll in the upper echelon of baseball. Many non-baseball related events take place in the confines of Petco Park and allow the team to make revenue that they can then apply toward the team.
Selling the team
With the announcement on Nov. 13 that the Seidler family was exploring a sale of the franchise, it put the competitive future of the team in the balance. The further complication of the lawsuit brought by Peter Seidler’s widow, Sheel Seidler, against the Seidler brothers who control the Seidler trust makes the sale even more complex.
AdvertisementAdvertisementAdvertisementWho is actually selling? Can they speak for all the owners of the team or just the Seidler family members that own approximately 20 percent of the team?
Based on information released at the time of the announcement, Sheel Seidler and her children own 24 percent of the team, the other Seidler family members, and members of Peter Seidler’s former private equity firm, own approximately 20 percent, and Mexican businessman and Seidler family associate Alfredo Harp Helú owns another 20 percent (approximately). Other investors all have smaller stakes, including Padres CEO Erik Greupner.
The lawsuit filed by Sheel Seidler in Texas, where Peter Seidler’s wishes are now being tried in probate court, will undoubtedly have a detrimental affect on the sale of the team. The statement made at the time of the announcement said there would be no further statements made by the Seidler family about the sale until the process has been completed. The same is also true for the lawsuit, as none of the parties have made statements since the initial media blitz after the lawsuit was filed.
Team value and future finances
The Padres are valued at $1.95 billion by Forbes but the projected sale price lies between $2-3 billion, based on recent sales and the popularity of the team and the ballpark. The effect of the sale on the team itself will be the uncertainty regarding payroll until the new owner is in place. Historically, teams up for sale do not increase payroll nor incur further debt. The Padres currently are believed to be a prime commodity but have about $300 million in debt taken on to make payroll during Peter Seidler’s biggest spending seasons.
AdvertisementAdvertisementAdvertisementThe exact payroll is unknown for the coming season. Despite industry insiders being convinced that the Padres can’t spend money, the team just signed two free agents (Michael King and Sung-Mun Song) with the potential to make $90 million over their combined contracts. The offseason still has plenty of time before Opening Day for the front office to shed payroll by trade in order to decrease this season’s payroll, but conventional wisdom doesn’t seem to be applicable to A.J. Preller and the Padres.
CBT negotiations and possible lockout
Setting aside 2026 for the moment, the potential labor uncertainty for the 2026 offseason and the 2027 season will almost certainly affect the bottom line financially, for all teams. But it is more an issue for a team like the Padres who don’t have a secure financial status pending their sale. The decisions made after the end of the 2026 season regarding the collective bargaining agreement will have to be taken into account when selling the team, as well as making a budget for 2026. This directly affects whether maintaining a competitive roster and approach is possible for the organization.
If baseball can’t come to a negotiated settlement without having a lockout or a strike, all teams will suffer. But the Padres, considered small market in the big media picture, will take a big hit without game revenues, marketing income, merchandise and other ballpark related revenues. The Padres need that other income flow more than the larger market teams that can compete more easily with their big media contracts and large market shares.
AdvertisementAdvertisementAdvertisementWindow of contention
Peter Seidler and A.J. Preller announced a decade of contention in February of 2020, before the Covid lockdown began. “This is our decade. We’ve talked about it. We’re not shying away from it.” – Peter Seidler.
That window was affected by the Covid 2020 and 2021 seasons, but Seidler and Preller have largely delivered a competitive team during the window. With 2027 potentially affected by another labor disagreement, the window could begin to close. Manny Machado, Xander Bogaerts and Yu Darvish have big contracts with lots of money still committed to them. Darvish is still deciding if he will pitch again. Some payroll relief could come if he decides to retire and receives a negotiated buyout.
Machado and Bogaerts are entering their age 33 seasons and Darvish is 39. For the Padres to contend, Machado and Bogaerts have to contribute. Bogaerts gets $25 million a year through 2033 and Machado has eight years remaining on his contract that will pay him $25 million in 2026 and then $39 million a year through 2033. If neither of them can contribute significantly as they age, the team will be hamstrung by their salary as well as lack of production.
AdvertisementAdvertisementAdvertisementThe Padres can continue to build around their two aging stars but some level of productivity has to come from them. At least one has to continue to play competently in the field and hit while the other has to be able to DH. Without them, the Padres have a lot of payroll money locked up with questionable production. That as much as anything could prove to limit the window of contention that we hoped would continue to 2030, at least.
My outlook
I remain a die-hard Padres fan. I’m in it for the long haul. Losing Peter Seidler was a big blow to this team, its fan base and this city. Without his passionate and devoted leadership, the future of the team looks much less certain. As fans, we have no say in these decisions. We vote with our dollars and the voting has been very positive so far. The hope remains that the Seidler family will honor the wishes of Peter Seidler and keep the team competitive for the city – striving to bring that first World Series Championship to San Diego.
AdvertisementAdvertisement