Remember last Winter Meetings, when everyone wondered how the Padres could afford to offer Aaron Judge $400+ million and Trea Turner $342 million before finally getting Xander Bogaerts to take their money? They couldn't. That's how.
All told, San Diego ran a $246 million payroll in 2023, responding to Manny Machado's opt-out with another deal that takes him through 2033 with a $31.818 million luxury tax hit. The Pads did some great spending in recent years, like locking up Fernando Tatis Jr. for nearly the duration of his career, as well as overextending themselves during the 2022-23 offseason to prove to their fans that their devotion would be rewarded. They also, uh, gave 36-year-old Yu Darvish a six-year, $108 million extension just before the 2023 season for reasons unknown.
That carefree approach led almost directly to what Evan Drellich, Dennis Lin and Ken Rosenthal reported for The Athletic on Wednesday. Per their sources, Padres leadership took out a ~$50 million loan in September in order to make certain they could fulfill payroll obligations through the rest of the year. That is bleak.
Rumor had it -- several weeks ago -- that San Diego intended to slice about $50 million off their payroll this winter, leading to speculation about a Juan Soto trade (with a Jake Cronenworth sweetener). Add in this additional $50 million floater, and the franchise seems to be in even more danger than we anticipated (and any personnel move seems believable).
Dodgers rival San Diego Padres had to borrow $50 million loan to cover payroll
When local regional sports networks went belly up in recent months, MLB absorbed them so fans could continue watching their beloved teams locally. Will Rob Manfred have to plan a similar takeover to make sure San Diego's RSNs can keep covering the Padres (because, otherwise, they won't exist)?
As Drellich explained, there's a reading of this reveal that isn't concerning, but ... several connected sources were less generous with their interpretation:
"MLB teams commonly tap into lines of credit to pay their bills, prompting some officials in the sport to suggest any concern should be tempered because the Padres were ultimately creditworthy enough to draw the loan. But other officials briefed on the team’s finances who were not authorized to speak publicly viewed the Padres’ situation as worrisome."- Evan Drellich
Per The Athletic's reporting, the Padres requested a $100 million loan, which MLB denied, before the two parties ultimately decided that $50 million would be acceptable.
Clearly, an inciting incident occurred in the middle of the 2023 season that rendered the previous offseason's plan to throw caution to the wind untenable. This certainly won't be the end of this story, and the next step likely consists of something approaching an offseason reckoning.