Padres Face Several Financial Questions Heading into the Offseason

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Expectations were high for the San Diego Padres after a 93-win season and NLDS appearance in 2024. Fans and the organization anticipated a deep 2025 postseason, but the team's season ended early with a Wild Card loss to the Chicago Cubs. That disappointing finish creates urgency to upgrade the roster, but financial restraints make it difficult.

FanGraphs projects that the Padres will begin the 2026 season with a payroll of $201 million, which is within $43 million of the 2026 CBT threshold of $244 million. While they could exceed the CBT threshold and incur penalties, it is worth noting that the Padres had a budget of $211 million last season, despite the 2025 threshold being $241 million. Their prior spending patterns might suggest less room to work with than previously believed.

The team's reluctance to spend last season may stem from the fact that it was the first offseason without former owner Peter Seidler, who passed away in November 2023. Known for aggressive spending to build a competitive team, Seidler's absence makes leaving $30 million unspent before reaching the CBT threshold notable. With the Seidler family seeking to sell, ownership uncertainty could affect future player investments.

However, despite the possibility of new ownership, that scenario will not alter this offseason's plans. In free agency, the Padres' urgent need is in the starting rotation. Dylan Cease and Michael King are free agents, and Yu Darvish received devastating news that he will miss the entire 2026 season due to needing reconstructive elbow surgery. Offensively, the Padres finished 28th in home runs (152) during the regular season. With Ryan O'Hearn and Luis Arráez also hitting free agency, they are leaving offensive and defensive voids, making the process of targeting a cheap power bat even more crucial.

Further complicating the flexibility, the team has $70 million allocated between Manny Machado, Xander Bogaerts, and Fernando Tatis Jr. for the upcoming season. Still, the amount increases to $85 million, $90 million, and $100 million through the 2027-2029 seasons, and remains at $100 million in 2030. These escalating contracts make finding relief challenging, as moving one of these would bring significant salary relief; however, all three have full no-trade clauses.

Jake Cronenworth could be a trade piece, but he has five years ($12.28 million annually) left on his seven-year, $80 million deal and holds a partial no-trade clause. Still, the bullpen offers flexibility, returning as a strength after leading the league in ERA last season (3.06). As the Padres finalize their finances and roster, the budget available to president of baseball operations A.J. Preller remains uncertain, although several needs persist.

The team should prioritize signing a reliable, middle-tier starting pitcher (if an ace is too expensive). Re-signing Michael King on a short-term contract could be a strong option, as it appeals to both sides, given his recent injury history and the need to prove his value.
Target a power hitter who can play first base or designated hitter, ideally a right-hand bat, to potentially platoon with Gavin Sheets or Tirso Ornelas. This addition would strengthen the lineup's offensive output, addressing the team's low home run totals.
Seek additional affordable bench bats that provide offensive depth and flexibility for matchups across the lineup.

The Padres have the worst farm system in MLB, which has been depleted over multiple seasons of trading prospects for stars. Given these limitations, the free agency market is the best approach to building a competitive team. While the Padres aren't far from reaching a World Series, how Preller approaches this offseason will be crucial to their chances.

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