The Padres have been playing in downtown San Diego’s Petco Park since it opened in 2004. They haver a lease to play there until 2034 unless the city’s public bond issue is paid off sooner. (Photo by Brandon Sloter/Getty Images)
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Golden State Warriors majority owner Joe Lacob is interested in buying Major League Baseball’s Padres, which could endanger the franchise’s long-term viability in San Diego.
Last month, Lacob told the San Francisco Chronicle that he’s “always interested in looking into new opportunities and buying the Padres might be something he’d explore.” The quote was confirmed for Forbes recently by a spokesperson for the highly-valued NBA franchise.
The Padres, owned by the remaining brothers of the Seidler family, announced in November they had hired the investment bank of BDT & MSD Partners to explore sale of the franchise, which has been in the hands of the Seidler/O’Malley family since it was purchased from John Moores in 2012 for $800 million.
The announcement came just about two years after the death of Peter Seidler, the principal owner who invested millions of dollars in player payroll, upgrades in Petco Park and turned the Padres into a perennial playoff contender with the goal of winning their first World Series title. Continued ownership by the family, which once owned the Los Angeles Dodgers, has been questioned since then.
“We will undertake this [sale] process with integrity and professionalism in a way that honors Peter’s legacy and love for the Padres and lays the foundation for the franchise’s long-term success,” Padres chairman John Seidler said in a statement this past November.
A lawsuit brought early last year by Peter’s widow, Sheel Seidler, in a Texas probate court over control of the team against Pete’s brothers Matt and John is still pending.
Among the incendiary claims in the complaint, Sheel’s attorneys wrote: “Indeed, Matt’s efforts to promote his brother John as Control Person and to block Sheel may well be part of his efforts to sell, and perhaps, relocate, the team, over Sheel’s strident objections.”
A response letter from Matt Seidler to Padres fans denied that a move from San Diego is on the table.
“This is completely false,” he said. “It is also laughable. The San Diego fans are the best in baseball, and Petco Park is the best ballpark in MLB.”
But at least one part of Sheel’s accusations is true: the Padres are up for sale.
The Padres Have A High Value, But Plenty of Debt
The franchise is currently valued by Forbes at $1.95 billion, 17th in MLB and could generate as much as $3 billion depending on the buyers and their intentions. Lacob, who also owns the WNBA’s Golden State Valkyries, has long been in the market for an MLB team but previously failed in his attempts to buy the Athletics and the Los Angeles Angels.
He’s worth $2.3 billion, according to Forbes, which recently valued the Warriors at an NBA-leading $11 billion with revenues of $880 million.
The local viability of the franchise comes into question because of terms in the Padres lease with the city of San Diego for Petco Park, which was signed before the ballpark was constructed and opened in 2004 at the cost of $474 million. It was a joint project between the Padres and the city, which according to city documents, owns 70% of the facility.
The Padres committed at the time to a 30-year term playing in the facility through 2033 or until the city retired its bond issue that helped pay for the project, “whichever period expires first.” The lease goes on to say that “in no event shall the Padres’ occupancy be less than 22 years.” That period lapsed after the 2025 season, which means if the bonds are paid off early the Padres are free to walk away. Their naming rights deal with Petco lapses in 2027.
According to another city document, San Diego refinanced $105.24 million of Lease Revenue Refunding Bonds in 2016 to pay off its remaining public debt on the stadium, which is funded by and large by a percentage of downtown hotel-motel taxes. The annual repayment schedule says the city still owes about $50 million.
To be sure, the Padres have their own undisclosed private debt on its 30% share of the stadium, which would be conveyed with any sale. That debt and annual operating losses, which have long been in the double-digit millions, according to Moores, is the reason the Padres are for sale.
The Padres also have the option on two five-year extensions of the lease at the current terms through 2044. If the Padres don’t exercise those options, the city would become sole owner of the ballpark in 2034.
An Owner Like Lacob Could Buy The Padres And Move Them
It’s not hard to envision a buyer like Lacob paying off the public and private debt, allowing him to ultimately move the Padres to Oakland, which was left vacant when the A’s relocated after the 2024 season to West Sacramento and eventually Las Vegas.
That would be contingent, of course, on Lacob tearing down and rebuilding the moribund Coliseum south of Oakland as well as redeveloping the property around it. He also must have the blessing of MLB commissioner Rob Manfred and 75% percent of the MLB owners to approve the sale of the Padres to him and the subsequent move of the team.
That’s all a long shot, but not beyond the realm of possibility.
“It would break my heart,” Moores said this week in an exclusive telephone interview.
The Padres did not respond to an email request seeking to ask questions.
The financial problems are deep in San Diego, which has already lost two NBA franchises – the Rockets and Clippers – and the NFL Chargers, the latter two to Los Angeles.
The Padres no longer have a lucrative local television contract, which has hurt their bottom line despite record attendance figures at Petco where last season they drew 3.4 million, an average of 42,434 a game, both figures second only in the league behind the Dodgers, who play in the much higher capacity Dodger Stadium. Last week, the Padres said they have sold out their season tickets for the fourth consecutive year, but didn’t announce how many. Their total evenue for the 2024 season was $432 million, Forbes said.
Offsetting all that is the Padres’ current $268.6 million player payroll for luxury tax purposes, good for sixth in the league, with 38 players on the 40-man roster, according to Spotrac. That already places them paying an $8 million luxury tax without adding any more costly players before spring training begins. Last year, the Padres were assessed a $7 million luxury tax on a $270.4 million payroll, also sixth in MLB.
They were only one of nine teams to pay the tax with the Texas Rangers at the low end at $190,483 and the Dodgers topping the field at $169.4 million, higher than the entire payrolls of each of the bottom 12 teams. The first luxury tax level this season is $244 million with 10 teams already projected to pay a hefty tax.
So far this offseason, the Padres re-signed free agent pitcher Michael King for three years at $75 million. But that could be the extent of it considering their other high-priced players – Manny Machado, Xander Bogaerts and Fernando Tatis Jr. – all have costly long-term contracts that extend to 2033.
Machado, for example, has eight years left on his deal that is back loaded and in 2027 will still have seven more seasons at $39 million per through 2033, his age 40 season. Machado will earn $25 million this season.
This is just a glance at what any prospective Padres buyer is going to have to contend with whether the team remains in San Diego or not.