Reports surfaced that the San Diego Padres took out a loan for approximately $50 million back in September to help cover player payroll and short-term expenses, per The Athletic.
But in September, the Padres had a third-party lender willing to loan the club $100 million. The team asked MLB for permission to receive close to the full $100 million, according to people briefed on the team's finances. MLB gave the team permission to draw roughly $50 million, which the league deemed a sufficient amount for the team to cover its expenses.
Owners can borrow as they see fit when doing so in their own name, but the league has standards and an approval process when loans are taken out in a team's name. The greater a club's pre-existing debt, the more difficult it can be to receive permission, people briefed on the process said. The Padres were carrying enough debt relative to their revenues that MLB was more cautious than it might have been in other situations.
Quotes via The Athletic
The Padres have found themselves in a particularly difficult situation. Along with the two New York clubs, the Padres ranked third in payroll this season. Coming in at a whopping $256 million, the Padres have already hinted at the possibility of shedding payroll. After going all in at the 2022 trade deadline for superstar outfielder, Juan Soto, he's the sore thumb sticking out for a possible trade.
With Blake Snell and Josh Hader about to hit free agency, the payroll will shed some, but not significantly. Per CBS Sports, the Padres already have $217.8 million on the books for 2024. The Padres are finding themselves in quite the predicament. With the World Series and the 2023 season coming to an end last night, the baseball Winter Meetings are the next big event. Coming in about a month, it will be quite interesting to see how this Padres front office will handle their finances.