It’s amazing how one poor year can change the way a franchise operates. Prior to 2009 the Padres actually maintained a reasonable payroll, usually in the middle third of the league. In 2008 they actually raised it to over $70 million for the first time, after division titles in 2005 and 2006, and the Game 163 loss to the Rockies in 2007. But when the Padres finished 63-99 in 2008 ownership slashed payroll by $30 million, and then cut another $6 million in 2010. This year they added a bit, but still come in under the $50 million mark. That’s about to change, though.
Yesterday Padres CEO Jeff Moorad spoke to the media about his plans for the future. The report, as written by San Diego Union-Tribune scribe Bill Center, contains plenty of nuggets, but what stands out is Moorad’s stance on the Padres’ future payroll. Next year it “will start with a five,” and will increase to $70 million by 2016. Given the Padres current commitments, it could take a considerable off-season effort to get payroll to the $50 million level.
The Padres are very well set up for the future. They have no commitments past 2012; the only money they owe players in 2013 is in the form of option buyouts. Next year they have commitments to just two players, Jason Bartlett and Orlando Hudson, for a total of $11 million. There are also three players with club options: Aaron Harang, Brad Hawpe, and Chad Qualls. We can safely assume that the Padres will decline them all, which will cost them an additional $2.55 million, leaving them with $13.55 million in commitments for 2012. Where are they going to find players to fill in the additional $36 or so million?
One place they’ll pick up salary is with their myriad arbitration cases. Chase Headley, after his fine 2011 season, will command a raise over his $2.325 million salary. Tim Stauffer, too, will likely more than double his $1.075 million 2010 salary after performing well in the rotation this year. Chris Denorfia, too, could get a bump in his second arbitration round, though not as substantial as the other two. Then there are first-time cases such as Clayton Richard, Luke Gregerson, and Nick Hundley. Even then, Richard and Hundley have sustained injuries this year, and Gregerson is still just a relief pitcher. They might not earn big bucks through the arbitration process, at least this time through.
Estimating liberally, the arbitration cases could add $16 million to the Padres 2012 payroll, bringing them to just under $30 million. That $20 million could go towards extensions for zero-to-two players, such as Mat Latos, Cameron Maybin, or even Cory Luebke. But there’s no chance that such extensions add even $5 million to the 2012 payroll. Normally when teams execute extensions with zero-to-two players, they suppress salaries until the player reaches his arbitration years. For instance, when Grady Sizemore signed his six-year extension in 2006, he had just two years of service. His 2006 salary reflected that, at $0.5 million. The real money for those extensions would add to payrolls from 2013 and beyond — a time at which the Padres currently have zero player commitments.
That leaves free agency as the main method of adding payroll, but that could be a problematic proposition for the Padres. When speaking to the media, Moorad said, “This team is going to be homegrown.” That makes it sound as though they won’t make a splash on the free agency market, save for perhaps closer Heath Bell. Re-signing him could cost them about half of that remaining $20 million, and it sounds as though the player and team are set for a reunion unless San Diego can work out a trade this month. But after that, whom could they add from the free agent pool that would beef up the current payroll?
Unfortunately for the Padres, their park makes it difficult to attract premier hitters. It would take a substantial offer from the Padres, combined with a lack of interest elsewhere, for them to land a hitter of note. They could pursue pitching, but that would likely come from a reclamation project such as Harang, rather than a big money pitcher such as Mark Buehrle. Still, if they’re going to add to the payroll via free agency, signing a pitcher along those lines appears to be the only viable path. Perhaps Edwin Jackson will find a home in San Diego.
The prospect of any team adding to payroll is exciting, and it sounds as though San Diego is set to do just that this winter. They’re set up to do something big, too, considering their few and relatively cheap commitments for 2012. The new Moorad-led ownership group seems committed to building a break-even business that will continue pumping money into the team. That will work out not only for 2012, but in the long-term, when the Padres are set up very well.