How A.J. Preller Quietly Saved the Padres Millions This Arbitration Season

February marks the final month of the MLB offseason, which also means arbitration hearings are in full swing. These hearings occur when players reach arbitration eligibility, requiring the player and team to agree on a one-year contract based on production and service time.

If the two sides cannot reach an agreement, Major League Baseball steps in and schedules an arbitration hearing. A panel of MLB evaluators then chooses one of the two proposed salaries to award the player for the upcoming season. These proceedings are historically tense, as they often highlight the gap between how teams value players and how players value themselves.

This offseason featured a particularly dramatic case involving Tarik Skubal, who was awarded a record-setting $32 million arbitration salary rather than the $19 million proposed by the Tigers. The $13 million difference between the two figures was the largest gap in arbitration history.

Skubal’s victory was one of five arbitration decisions so far this offseason, all of which have gone in favor of the player. Those player-friendly rulings appear to be part of MLB’s broader plan ahead of the looming 2027 lockout, as the league looks to improve its standing with the players association.

As a result of this dynamic, teams are being forced to spend more than anticipated to retain talent. Padres general manager A.J. Preller, however, has avoided that issue thanks to his perfect track record in arbitration negotiations.

A.J. Preller’s perfect arbitration record and ability to negotiate saved the Padres a lot of money this offseason. Players are 5-5 in the hearings as of now with no sign of a switch. The MLB wants to be in good standing with the players association before the lockout.
— Gregory Spicer (@Greg_Spicer_) February 6, 2026

Since becoming a general manager in 2014, Preller has never allowed a case to reach a hearing. He has successfully reached agreements with every arbitration-eligible player for more than a decade. In past seasons, that approach may have resulted in occasional overpays, but in 2026 it spared the Padres from falling victim to a notably player-friendly arbitration panel.

This winter’s arbitration class wasn’t easy either, particularly with multiple high-profile relievers headlining negotiations.

Preller managed to retain All-Stars Jason Adam and Adrián Morejón for $6.675 million and $3.9 million, respectively. He also agreed to a team-friendly $4 million deal with flamethrower Mason Miller.

The Padres will pay less for their trio of superstar relievers ($14.575 million) than the Dodgers will pay Edwin Diaz ($17 million) in 2026. Diaz will also make $26 million in 2027 and 2028.

A friendly reminder that the Dodgers are paying more for Edwin Diaz than the Padres are for Jason Adam, Mason Miller and Adrian Morejon in 2026. pic.twitter.com/R7jNEk2LZN
— Gregory Spicer (@Greg_Spicer_) February 7, 2026

San Diego also finalized deals with two Opening Day bats: first baseman Gavin Sheets ($4.5 million) and catcher Freddy Fermin ($1 million). Sheets is coming off a breakout season in which he posted a 111 wRC+ and has been announced as the starting first baseman for 2026, making him a strong candidate to outperform his salary.

With the franchise up for sale and payroll capped, the Padres needed to find savings wherever possible. Preller’s savvy handling of arbitration negotiations accomplished exactly that, shielding San Diego from costly hearings in an increasingly player-favorable environment.