The Padres have doubled their revenue since 2019, but were unable to cover their expenses at the end of the 2023 season without an infusion of outside money.
League and team sources said the team took out a $50 million loan. The Athletic first reported the Padres’ loan Wednesday afternoon.
Even with 59 sellouts at Petco Park and the team drawing a record 3.2 million fans, contributing to what team officials have confirmed was record revenue, the team’s obligations surpassed its ability to cover its bills.
A large portion of the Padres’ expenses was their $256 million player payroll, which ranked third in the major leagues.
The team has multiple owners besides principal owner Peter Seidler, and those owners contributed to a sizable capital call last year. One source said at the time the capital call was for $100 million and that the team’s owners were highly unlikely to contribute cash again this year.
The Padres are not the only team to take out a loan in September. Baseball revenue is seasonal, and several teams are operating in the red.
A Padres source said a loan was part of the team’s financial plans from the beginning of the year.
It was in January that Padres CEO Erik Greupner acknowledged the team was not operating at a profit and was attempting to find out how much it could grow revenue and at what level it could comfortably keep its payroll.
“Of course, you’ve got to get to profitability,” Greupner said in January. “And I think we’re in that transitional phase right now of really learning and understanding how much we can grow revenue.”
On Wednesday, Greupner responded to questions about the loan in a statement:
“The Padres organization continues to have access to all the resources, financial and otherwise, it needs to field a championship caliber team for the fans of San Diego,” the statement read. “We established a capital plan for 2023 with our ownership group and lender partners and are operating our business in accordance with that plan.”
The Padres are expected to trim their payroll by $50 million or more for 2024, in part because they have reached the limit of their allowable debt. Even at around $200 million, they should rank in the top 10 in payroll.
The Padres were also among the teams that lost its regional sports network when Diamond Sports Group effectively folded Bally Sports San Diego in May. The Padres’ contract with BSSD paid it approximately $50 million a year. In 2023, MLB covered at least 80 percent of that. The league will produce Padres games again in ‘24. It is not known how much the league will subsidize and how much the Padres will receive from advertising revenue, but it will be far less than $50 million.
