SAN DIEGO — The Padres on Thursday begin another season of great promise.

That is the new normal in San Diego, where for the better part of five decades it felt like the season was just about as good as over before it began.

Lack of hope has been replaced by urgency.

How the team does on the field will go a long way toward determining the direction of the franchise when it comes to personnel and payroll decisions.

Those who run the franchise are aware that winning is requisite if they want to continue operating as they have been, which basically means having the ability to spend on players.

“I think because we went for it, and we made commitments to players, and we continue to do things really well in terms of how we treat our fans and the ballpark experience and all the other controllables around the team on the field, it’s kind of mission accomplished at this point with the big exception of a World Series championship,” Padres CEO Erik Greupner said, refering to the idea of building a sustainable business model. “Now, as the Navy SEALs say, the only easy day was yesterday. And so there’s no guarantee we’re going to be able to stay at this level. But to stay there, we’ve got to continue to play consistently winning baseball. Our fans have to believe that we have a chance to win a World Series and that we’re a playoff team. And then we’ve got to continue to do all the other things well that we’ve done well consistently. And if we can do that, I believe we can have an extended run here in this market and win a World Series championship.”

It can be argued whether the Padres have invested in the right players all the time. It can be asserted that some decisions have been detrimental when it comes to not being able to make other acquisitions.

What cannot be disputed, however, is that the Padres have invested and continue to invest in their team at a level that is well beyond what not long ago was unthinkable in San Diego and is still seen as unfeasible in several places like it.

The Padres will enter the 2025 season with Major League Baseball’s ninth-highest payroll, at slightly more than $199 million.

They play in the nation’s fifth-most populous county but also in a media market that, depending on what metrics are used, is anywhere from the bottom five to the smallest in MLB.

Based on the revenue sharing market score assigned to each team based on factors such as population, income level and cable households agreed to by the league and the MLB Players Association in their collective bargaining agreement, the Padres are ranked 24th.

No other team in the top 10 in payroll has a market score ranked lower than 15th. All realize more money from their local TV deals, and almost all get far more.

So how are the Padres able (and willing) to spend at the level they do?

A mix of good planning, aggressive spending and good fortune.

And this:

“The short answer is fan support,” Greupner said. “Attendance has led to revenue growth that can support a payroll that’s a lot higher — much, much higher — than our media market would support.”

Drawing them in

In 51 seasons from 1969 through 2019, the Padres drew 3 million fans once. That was in 2004, the first year of Petco Park.

They have done it each of the past two seasons, going over 3.2 million in 2023 and 3.3 million in ‘24. That was after falling less than 13,000 fans short of 3 million in 2022.

Since 2021, the Padres have drawn more fans than all but the Dodgers and Braves.

With the equivalent of more than 25,000 season tickets sold for 2025, they expect to threaten the franchise attendance record again.

That support has underwritten the Padres’ ability to go from a franchise that ranked higher than bottom-10 in payroll once from 2009 through 2019 to a team that is in the top 10 for the fourth time in five seasons.

“With the fans coming out in droves supporting the Padres,” new team chairman John Seidler said, “that allows us to field the best team possible.”

That team has been to the playoffs three of the past five seasons, more than all but nine other teams in that span. It is also just two fewer times than the Padres went to the postseason in the franchise’s first 51 years of existence.

The Padres have had 15 players selected to the National League All-Star team since 2021, as many as their total the previous 11 seasons.

They have an international star in Yu Darvish. They have one player who ranked in the top 10 in jersey sales in 2024 (Fernando Tatis Jr.), another in the top 20 (Manny Machado) and another who is likely about to break into that group (Jackson Merrill). They have a hometown favorite (Joe Musgrove) who threw the franchise’s first no-hitter back in 2021. And all of them — plus Xander Bogaerts and Jake Cronenworth — are signed through at least 2027 and most beyond that.

“When winning is valued, players and their skills and experience are valued, and everyone who loves the game benefits,” MLBPA executive director Tony Clark said via email. “For example, the last two years, the Padres invested in talented and experienced players, and sure enough, they were rewarded with historic increases in attendance and revenue.”

Spend to make

From 2022 to ‘24, the Padres doubled their local non-media revenue. That includes everything except their local television revenue. So, corporate sponsorships, team store sales, ticket sales and concessions. According to two sources, the Padres ranked sixth in baseball in local non-media revenue last year.

That is why for the first time in their history, they have been payors into MLB’s revenue sharing the past two seasons. That is an anomaly for a team in a smaller market, in that the system was essentially designed to help balance the playing field between larger-market and small-market teams.

Making all this money has cost the Padres quite a bit.

Several sources said that Padres ownership has not realized any dividends since at least 2012, when a group headed by Rob Fowler and Peter Seidler bought the team.

“The ownership group as a whole wants what everyone wants,” John Seidler said. “We want to see a winning team on the field. It’s an investment of love of the sport of baseball, of the San Diego Padres as much as it’s a financial investment.”

An examination of the fallout shows almost unequivocally that the Padres spent beyond their means in the three-year period in which Peter Seidler was team chairman, from 2021 to ‘23.

That was especially so during the time from the trade deadline in 2022 through ‘23, when the team doled out contracts and acquired players that added some $125 million to the payroll over those two seasons.

That does not take into account the previously existing large contracts for players like Eric Hosmer, Darvish and Machado.

To cover their costs during this period, the Padres made a capital call of $100 million on the team’s owners, secured a loan of $50 million beyond their already accrued debt, got another $50 million infusion from Seidler’s trust and sold off a small portion of the team to an investment firm that has also bought passive minority stakes in multiple other clubs.

And then the Padres trimmed more than $80 million from the payroll in 2024, to $172 million.

It could be considered a Herculean feat by Greupner and Eric Kutsenda, who took over as chairman shortly after his Peter Seidler’s death in November 2023 and oversaw the team’s debt reduction, that the Padres came out the other side as quickly and successfully as well as they have.

One man seems to think so.

“The interim management team has done one thing that is extraordinarily difficult to do,” MLB commissioner Rob Manfred said. “They got payroll down and stayed competitive and managed to increase their revenue. Usually when you have a situation where you have to reduce payroll, it has an effect on the business side. You have to give them a tremendous amount of credit.”

Notably left out of Manfred’s praise is any suggestion the Padres are the prototype for teams in markets similar in size to San Diego.

“It’s a difficult model to replicate,” Manfred said. “Because it involves investment in (financial) losses and winning (on the field).”

More to it

Winning does help sell tickets and jerseys and corporate sponsorships. But winning is not guaranteed.

The Padres ranked third in payroll in 2023 and did not make the playoffs. Neither did the Mets or Yankees, who led the league in payroll that season.

The teams with the six highest payrolls did make the postseason last year. So did six teams outside the top 10, including three in the bottom 10. In 2022, the first year six teams in each league qualified for the postseason, the top five teams and seven of the top 10 in payroll made the playoffs.

So Padres president of baseball operations A.J. Preller and his group are due a significant portion of credit. They found bargains in free agency, signing Jurickson Profar, Donovan Solano and David Peralta off what is essentially the scrap heap of available veterans. The Padres reaped the benefit from the 2021 drafting of Jackson Merrill and his subsequent development. They traded for Luis Arraez in early May and then practically half a bullpen in late July.

All of those moves worked out phenomenally, as the Padres won 93 games and advanced to the NL Division Series.

So praise must also go to the players and manager Mike Shildt and his coaching staff.

But winning is not everything. Not in the business of professional sports.

The Brewers and Rays have won more games and been to the playoffs one more time than the Padres since 2020. Their attendance does not come close to the Padres. And both are recipients of revenue sharing funds.

There might be other factors that contribute to that disparity — such as the relative income level of San Diego and the fact they have been the only major sports franchise in town.

“San Diego was well-positioned (in that) while it is a smaller market, there are a lot of affluent people and not a ton of entertainment alternatives,” Manfred said. “And they were able to get that revenue bump because they played well. The difficulty is in a lot of other markets, they don’t have that affluence and they have other entertainment alternatives.”

Clark, the union chief, acknowledged the different challenges in markets but was adamant in his stance that was not valid to excuse what his side sees as the discrepancy in effort by different teams.

“What many other teams are not doing — in big and small markets — is putting their best foot forward in an attempt to make the playoffs and be the last team standing,” he wrote in an email. “It’s a disservice to the sport and in some cases dishonest to the fans when they are capable of doing more — in some cases, much more!”

Regardless of which side one comes down on in the virtually always-contrasting views of Manfred and Clark, the fact remains the Padres have also maximized their revenue sources.

One of the chief commitments by the Fowler-Seidler ownership group from the start was to keep up Petco Park so that it never looked more than five years old. A new video board, five times bigger than the previous one, was installed in 2015. The team expanded Petco’s capacity last year by renovating Gallagher Square, and it expanded the team store and renovated the Western Metal Supply Co. building this offseason.

The club also runs nearly 160 events at Petco Park in addition to games, ranging from corporate meetings in suites or clubs to significant money generators like concerts, the Holiday Market and The Links. Additionally, it operates other venues like the Rady Shell, where it puts on approximately 100 events a year.

That non-baseball event business nets about $20 million per year, which helps make up the revenue lost when the team lost its Bally Sports television deal. Put another way, one year of the non-baseball income almost covers the first two years of starting pitcher Nick Pivetta’s deal signed in February.

The Padres have received significant financial assistance from MLB to help make up for what they lost in the TV deal, which was valued at about $50 million per year. Multiple sources have indicated, however, that the Padres generate somewhere between $20 and $30 million from their media deals. That would put them by many industry estimates not only at the bottom of the league but at less than 10% of what the Dodgers are making from their TV deal.

“We’re doing the most we can do,” Greupner said. “We don’t ever sit on our hands and say, ‘Oh, that’s the most we can do.’ We’re constantly working to find new sources of revenue, and we’re constantly working to find ways to grow revenue, because we have to. We have to counteract the decline in media revenue, and we have to continue to support a payroll that can allow us to be competitive year in and year out for a World Series championship. And the only way to do that is for us to continue to punch well above our weight class when it comes to generating revenue.”

Staying together

There was a factor Peter Seidler, Preller and Greupner mentioned consistently when the team was making its big splashes in 2023 and ‘23. It was something that they believed would play in concert with winning to draw more fans to Petco Park.

Getting exciting players and keeping them.

Indeed, for whatever price the Padres will pay over the next eight years as Bogaerts and Machado cross into their late 30s or even if Fernando Tatis Jr. can never put together that elusive fully healthy season, the Padres have nonetheless built a core that almost certainly is not going to be broken up.

The days of Adrián González and Jake Peavy and countless others going back to Dave Winfield — players who fans just knew weren’t going to stay around because they were eventually going to cost too much — are gone.

Save for Juan Soto, fans generally do not have to worry their replica jersey of a Padres star will in a year or two be a replica jersey of a former Padres star.

“We’re now getting into a period, I think, where you’ve seen successive years of real belief in our fan base that we’ve got an exciting, championship-caliber team year in and year out,” Greupner said. “They’ve experienced it long enough now. … What you’ve seen these last four years is the result of combining a higher level of fan excitement for a team that our fans believe can win a World Series championship. You have exciting baseball against the backdrop of doing all these other things really well, then you get these types of results. And but for these types of results and fan support, there’s no way we can be where we’re at with payroll.”

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