The Padres have been among the quietest teams in baseball this winter, which is unusual given that president of baseball operations AJ Preller is one of the most aggressive front office executives in the sport. The club’s inaction this winter has largely been informed by reports of significant payroll constraints, but Kevin Acee of the San Diego Union-Tribune reported last night that those constraints might not be quite as stringent as once believed. While the club was previously thought to be angling towards lowering its 2025 payroll to something closer to the $169MM level they ran with in 2024, Acee now reports that the club plans to carry a payroll in or around the league’s top 10 for this season.
San Diego’s payroll currently ranks ninth in the sport at $208MM according to RosterResource, although some clubs on the outside of the top 10 such as the Cubs, Red Sox, Giants, and Angels are rumored to be involved in the markets of significant free agents like Alex Bregman, Jack Flaherty, and Pete Alonso who would likely catapult any of them into the top ten if signed. Even so, it stands to reason that the Padres are at least somewhat unlikely to increase payroll beyond its current level, a thought that Acee more or less confirms by noting that the club does not appear to be able to add payroll without first making room in the budget elsewhere.
That’s not necessarily exciting news for Padres fans, given the club’s clear needs at catcher, in the rotation, in left field, and at DH. It’s a lot of holes for Preller to try and plug without increasing payroll, and that’s led the Padres to listen to offers on key pieces such as Luis Arraez, Dylan Cease, and Robert Suarez this winter. While trading any of those players would create another hole on the roster, the return package combined with the payroll flexibility created by moving salary could allow San Diego to come out ahead on those moves as they did when they shipped Juan Soto to the Yankees last winter.
That makes the club’s plan to carry a payroll in or around the top ten potentially game changing for the front office. When the club was believed to be operating under a mandate to cut payroll, it seemed as though the Padres may have to execute multiple trades in order to make even modest additions via free agency. Now, however, it appears any dollars freed up by any trades they make can be reinvested directly back into the roster. That should make trading a high-end player like Cease much easier to turn into a net positive for the roster overall than it would have been if the club was forced to rely entirely on the return package for upgrades. It could also make the possibility of dumping a contract like that of Jake Cronenworth more attractive for the front office even in the event they’re unable to secure a significant return, as the roughly $11.3M is slated to earn in 2025 could then be spent on addressing more critical needs.
What remains unclear is whether or not the Padres are willing to exceed the first luxury tax threshold this year after avoiding the tax last season. San Diego is currently just over the first $241MM threshold with a projected payroll of roughly $243MM for CBT purposes. Preller has shown a willingness to get creative with his additions in order to lower a player’s AAV for luxury tax purposes in the past, and it’s certainly feasible to imagine the Padres finding a way to sneak under that first threshold while maintaining a similar or even identical payroll in terms of actual dollars spent. Moving a pricey arbitration level player like Cease or Arraez would be particularly valuable if ducking under the luxury tax is a goal, as their one-year salaries count fully against the luxury tax while even a similarly-priced free agent could be signed to a more complicated contract structure that offers San Diego additional wiggle room.
