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When word came out this weekend that the San Diego Padres and Manny Machado had reached an agreement on an 11-year, $350 million extension to avoid opt-out drama, replace his existing deal and keep the superstar third baseman in San Diego for the rest of his career, the reaction felt a little like the villain’s tagline in every Scooby-Doo episode.
How do the Padres keep doing this?
It has been a baseball industry refrain for a while now, and every repetition makes the rest of the industry look like the befuddled foils, whining predictably about those meddling kids. Even before the Machado extension, other team owners were grumbling about the open ambition (and open wallets) displayed by Padres owner Peter Seidler, New York Mets owner Steve Cohen and Philadelphia Phillies owner John Middleton. Ever in tune with the concerns of his ultrawealthy employers, MLB commissioner Rob Manfred commended the Padres as only he can earlier this month, saying they have “done a really, really good job of capitalizing on their talent to drive their revenue,” but he also wondered aloud about their sustainability.
“The question becomes ‘How long can you continue to do that? What happens when you have to go through a rebuild?’” Manfred told USA Today, noting that the Padres were expected to lose money in 2023.
Seidler’s answer, in so many words? Challenge accepted.
Padres’ investment in Manny Machado has been a winner
At the heart of sports fandom is a pact: You, the fan, invest your time and emotions — and yes, your money. You pay the ever-escalating ticket prices. You pay for cable to watch your local team when everyone else you know has cut the cord. You pay for the $15 beers. You pay for the $134.99 replica jersey.
In return, the people behind the team — the front office, sure, but mostly the team owners — try to give you something worth rooting for, something worth spending discretionary income to enjoy. That’s how it’s supposed to work.
In theory, it’s a circular system: Fans hungry for a baseball franchise exist. A team owner supplies the upfront funds to create or relocate or rebrand a baseball team for said fan base. The fan base rallies around said team. The team owner then improves the state of their investment, thus making money, and reinvests it to acquire star players, win and in turn encourage even more fans to be even more interested in the team.
It’s what some might call “capitalizing on their talent to drive their revenue.” Others would define this dynamic using a simpler phrase: You get what you pay for.
A lot of team owners and front offices have spent a lot of time trying to break the mental link between spending money on stars and fan excitement. Sustainability became the buzzword du jour. Long-term mega-deals became scarlet letters.
Seidler, who took over as the controlling owner of the Padres in 2020, does not have sustainability in his personal motto.
“People love that word,” he told reporters in February. “Let’s find a different one. Do I believe our parade is going to be on land or on water or on both?”
Near the peak of that sustainability movement, Machado and Bryce Harper waited out an icy winter on the free-agent market, finally signing deals in late February with the Padres and Phillies, respectively. It’s nowhere near universal or linear, but it’s becoming clear that those two teams — the combatants in the 2022 NLCS, led by aggressive executives A.J. Preller and Dave Dombrowski — have helped push the spending pendulum back in the other direction.
Other factors: The comically terrible outcome of the Mookie Betts trade for the Boston Red Sox, the addition of a financial superpower in Cohen’s Mets and the burgeoning efficacy of early career extensions, as exemplified by Jose Altuve, Jose Ramirez, Julio Rodriguez, Wander Franco and roughly every productive member of the Atlanta Braves.
What has become apparent is that long, lucrative contracts aren’t inherently bad ideas. Far from it. The lessons from the less-than-successful contracts of Miguel Cabrera and Albert Pujols have narrowed to more specific critiques: don’t sign players at certain age ranges or in certain profiles with defensive limitations. Other failed deals were felled by other reasons, with variations on the theme of teams taking half-measures around a big investment in a sport in which one player cannot lift an entire team on the field.
None of those, as it turns out, ever applied to Machado. In San Diego, he has played 519 of a possible 546 regular-season games. He has tallied two top-three finishes in NL MVP voting and emerged as a vocal leader on two playoff teams — matching the total from San Diego’s 20 seasons prior to his arrival.
If Machado had indeed reached the end of the 2023 season without a new deal and exercised his contractual opt-out, the Mets, Yankees and a host of other teams would almost certainly have chased after his services with a fervor that was absent in the dreary landscape of 2019. So whereas the Padres landed Machado for less than expected four years ago, this week they had to step up and commit more for a 30-year-old than they originally did for a 26-year-old. Why? Because as Machado so eloquently put it earlier this spring, “markets change.”
What the Padres win by doubling down
The Padres will not be caught taking half-measures. Prior to Seidler’s assuming control of the franchise, they made their own big-contract misstep in signing Eric Hosmer, who simply wasn’t a great candidate in the first place. But the Padres have not been cowed into austerity by that, a la the Cincinnati Reds ownership group. Instead, they learned from it and focused their attention on the younger, more consistent, more superlative types of players who have proven useful as franchise anchors.
It’s getting more expensive, but it might also prove more rewarding in the long run. Since Machado took over at the hot corner, Preller and the team have added Juan Soto, Xander Bogaerts, Josh Hader, Yu Darvish, Joe Musgrove and Blake Snell. Several are set to play alongside Machado for at least five years. The team also brought up Fernando Tatis Jr. and — despite some, uh, sagas — secured his jaw-dropping talent for just about forever.
Padres fans have responded as you might expect. Despite the ubiquitous “small media market” label attached to the team, the Padres reel in a comparatively high percentage of potential viewers, scoring among MLB’s top five teams in local ratings in recent seasons. After ranking 18th in MLB in average attendance in 2018, they came in third and fifth the past two seasons, drawing more than 10,000 additional fans per 2022 game than the last iteration of the pre-Machado Padres did.
“We’re seeding great fans for life,” Seidler told reporters in October. “And now, from our standpoint, we’ve always had an obligation, and it’s at a higher level now. That’s good.”
A man whose social media accounts come with handles that feel more “message board poster” than “billionaire team owner” — how many complaints can you really direct to PadrePedro7? — Seidler has personal interest in watching a good baseball team, just like the emotionally invested team owners in Philadelphia and New York. His grandfather was Dodgers owner Walter O’Malley, and Seidler has spoken openly about wanting to build the Padres into a consistent, worthy rival to the juggernauts in Chavez Ravine.
“I kind of like spending money,” he said in October. “You can’t take it with you.”
Step back from the immediacy of the monetary commitments and the subdued recent MLB landscape, and Seidler’s refreshing, fan-like tendencies also seem like reasonable strategic moves in the medium to long term. Plenty of teams lose money in a given year, but the results and storylines they create with that net loss can pay off in a big way. The Dodgers, for instance, have posted quite a few annual losses since the current ownership group took over in 2012, but the franchise they bought for $2 billion was worth $4.075 billion at last check, per Forbes.
Seidler has said he isn’t interested in selling the team anytime soon or that he wants the Padres to remain in his family for generations. But the logic holds true. If a team builds up a following and sustains it over a long enough period, by whatever means, for whatever reasons, we magically stop talking about media markets — when was the last time you heard anyone mention the size of St. Louis when discussing the Cardinals’ perpetual success?
And so, in subtly defending all the team owners not willing to truly hold up their end of the bargain with fans, Manfred teed up Seidler and the Padres to once again defy the supposed limitations of their market. “The Padres are going to lose money,” he said earlier this month, “but the question is what are you going to do next?”
First, it would appear, they are going to extend Manny Machado. After that? Maybe they’ll try the same with Juan Soto. At some point, we’ll have to stop being so surprised.