There has been talk since the regular season ended that the San Diego Padres might trade Juan Soto this offseason. More evidence points to those rumors becoming reality.
The Athletic published a story on Wednesday saying that the Padres took out a $50 million loan in September to help meet operating expenses, such as payroll obligations. The Padres apparently sought $100 million and were approved by MLB for a $50 million loan.
Padres officials reportedly say they have managed their finances responsibly and that requesting the loan was not unexpected. They argue it was all part of a long-term plan.
The news of the Padres having some financial issues should probably come as no surprise to many people. Many people questioned how the small-market San Diego team could afford their huge payroll obligations as they signed players like Xander Bogaerts ($280 million) and Manny Machado ($350 million) to massive deals.
But having Diamond Sports stop making payments on their TV deal, plus the team not making the postseason, probably cut into the revenue San Diego may have been expecting. MLB took over the Padres’ TV plan and paid them 80% of their deal. While that is helpful, it still is less than what the previous TV deal called for.
While the team still may have big long-term plans in which having an elevated payroll fits in, the team is expected to cut payroll for 2024. San Diego’s luxury tax payroll number for 2023 was estimated to be $296 million.
The Athletic says the team’s payroll in 2024 is expected to be closer to $200 million.
Soto is entering his final year of arbitration before becoming a free agent after the 2024 season. He is expected to earn nearly $30 million in arbitration. Trading him would provide the Padres with some instant financial relief while allowing them to potentially replenish their minor leagues. It would be no surprise if they looked to trade the 25-year-old outfielder.
