What is the secret to the San Diego Padres’ amazing ability to spend money?
The Padres took advantage of that secret power again during the just-concluded winter meetings. Padres chief exec A.J. Preller signed free agent shortstop Xander Bogaerts to an 11-year, $280 million deal.
San Diego Padres sudden financial strengths
That commits Bogaerts, one of the game’s elite shortstops, to play for the Padres through the season of 2033, when he will be 41.
Did the Padres need a shortstop? Well, they have Fernando Tatis under contract – at $340 million – through 2034. Then there’s Ha-Seong Kim, who started 131 games at shortstop last season while batting .251 and turning in modestly positive defensive numbers.
So yes, by the often perplexing standards of the Padres, they needed another shortstop.
They also apparently needed another nine-figure salary player. Bogaerts makes five of them on the San Diego payroll, joining Tatis ($340 million), Manny Machado ($300 million from 2019-2028), Yu Darvish ($126 million from 2018 through 2023) and the late-lamented Eric Hosmer. He signed for $144 million across eight-seasons in 2018, and the Padres remain on the hook for nearly $37 million even though Hosmer now plays for Boston.
Then there’s this: The Padres are likely to enter 2023 rostering three men to whom they will pay a collective $38.1 million this year – and $648 million over the life of their current contracts – ostensibly to play shortstop. Obviously, that won’t happen in the real world, but that was the plan when the contracts were signed.
For what it’s worth, the Oakland A’s project to pay their entire opening day roster on the order of $38 million, or almost exactly what San Diego’s shortstop trio will be making.
The Padres carried a $211 million payroll in 2022, and they’re on pace to exceed that by at least $20 million come opening day 2023. They made a hard run at Aaron Judge and seamlessly pivoted to Bogaerts when the Judge effort failed.
Given that San Diego is one of the game’s smaller markets – at 3.286 million its metropolitan area ranks 21st among big league franchises – what is the secret to San Diego’s profligacy?
Some of it certainly is the exceeding generosity of the franchise’s owner, Peter Seidler. Even so, with a net worth estimated at about $3 million – just about average for an MLB franchise chief exec — Seidler ranks only between 10th and 15th in wealth. By MLB standards, he’s rich…but not Steve Cohen rich.
Probably the more decisive secret to the Padres’ uncanny payroll flexibility is market share.
In simple terms, the Padres have baseball’s only true sports monopoly.
Considering the four major North American professional sports leagues – MLB, the NFL, the NBA and the NHL – the Padres are the only baseball franchise with no regional competition for fan interest. The closest teams in all three other sports play in Los Angeles, more than 100 miles up the road.
As noted earlier, the Padres play in the game’s 21st media market based on metropolitan population. Their 3.286 million metro population is barely half the $6.388 average for an MLB city’s metro area.
The list is topped, obviously, by metro New York, with 19.768 million potential fans. There are 12.997 million in metro Los Angeles, and 9.509 million in metro Chicago. All those numbers make San Diego look like a bus stop.
But divide those metro populations by the number of major professional sports franchises competing for attention in each, and the picture changes dramatically. Here’s an estimate of the 10 largest metro populations divided by the number of major professional sports teams competing for attention in each. Population figures are in millions.
Metro area Popu. teams popu./teams
1. San Diego 3.286 1 3.286
2. Toronto 6.710 3 2.237
3. New York Mets 19.768 9 2.196
3. New York Yankees 19.768 9 2.196
5. Atlanta 6.144 3 2.048
6. Chicago Cubs 9.509 5 1.902
6. Chicago White Sox 9.509 5 1.902
8. Houston 7.207 4 1.802
9. Los Angeles Dodgers 12.997 8 1.625
9. Los Angeles Angels 12.997 8 1.625
The Yankees and Mets have the largest population base from which to draw…but they also have the largest pool of competition for the sports entertainment dollar. They compete with each other as well as the NFL’s Jets and Giants, the NBA’s Knicks and Nets, and the NHL’s Rangers, Islanders, and New Jersey Devils.
Aside from one another, the Dodgers and Angels compete for the Los Angeles metro market with the NFL’s Rams and Chargers, the NBA’s Lakers and Clippers, and the NHL’s Kings and Mighty Ducks.
Aside from San Diego, the Blue Jays have it easiest. But even they have to compete against the NHL’s Maple Leafs and the NBA’s Raptors. And that calculation excludes the Canadian Football League’s Toronto Argonauts, who in reality are legit competition in that area of the world.
Among the cities with smaller metro areas than San Diego, the average number of major sports competitors is a fraction above two. The Cardinals, Reds, and Brewers all share their markets with just one major franchise in other sport, those being (in order) the NHL’s Blues, the NFL’s Bengals, and the NBA’s Bucks.
Milwaukee, of course, comes with a large asterisk thanks to the presence of the Packers in Green Bay a functionally meaningless 119 miles to the north.
The singularity of baseball’s presence in San Diego is probably a large part of the secret to why the Padres, with the game’s 21st metro base, ranked fifth in home attendance in 2022, drawing 2.991 million to Petco. Only the Dodgers, Cardinals, Yankees, and Braves did better.
In professional sports, it helps to have the undivided attention of your audience.