Inside the Padres’ Spending Freeze: Ownership Change, Payroll Limits and a Lost Winter

With no owner in place and payroll locked, the Padres are paying the price for years of aggressive spending. Breaking down what happened in San Diego this offseason.

Mar 30, 2023; San Diego, California, USA; San Diego Padres shortstop Xander Bogaerts (2) embraces chairman Peter Seidler during batting practice before the game against the Colorado Rockies at Petco Park. Mandatory Credit: Orlando Ramirez-Imagn Images | Orlando Ramirez-Imagn Images

If one thing has become clear this offseason, it’s that the Padres no longer have money to spend. As of now, general manager A.J. Preller has retained starting pitcher Michael King and added Korean star Sung-Mon Song, but lost key pieces in Luis Arraez, Ryan O’Hearn, Dylan Cease and Robert Suárez.

At the core of San Diego’s difficult winter is the sale of the franchise. In previous seasons, the late, legendary owner Peter Seidler allowed the organization to increase payroll year after year, similar to teams like the Dodgers and Mets.

Now, the Padres have decided to keep payroll flat at its 2025 level with no increase. While the continued commitment to a top-10 payroll is admirable, it also exposes the flaws in Preller’s previous ultra-aggressive, high-spending strategy.

The Giants and Luis Arraez are in agreement on a one-year contract, sources tell ESPN.

— Jorge Castillo (@jorgecastillo) February 1, 2026

Suddenly, the Padres have no money to spend and a farm system incapable of supplementing the roster. That reality is paired with a major league group still built to compete for a championship. San Diego now risks losing its fifth-seed postseason spot as teams such as the Mets, Reds, Pirates, Braves and Giants have all improved while the Padres have regressed considerably.

Seidler will forever be remembered as one of the best men and greatest owners in sports. His legacy should not be tarnished by the organization’s current situation, but it has become increasingly clear that his passing was more detrimental to the franchise than initially expected. The ownership search has dragged on as Padres officials look for someone capable of maintaining Seidler’s financial commitment to winning.

At FanFest, the team confirmed that a new owner will share the organization’s current financial vision - but what does that actually mean? Maintaining a payroll around $220 million while other teams continue to increase spending would be disastrous, especially with Jackson Merrill, Manny Machado and Michael King all in line for significant salary increases after 2026.

Preller officially confirms that he’s looking to add another arm or two before the off-season ends

— Gregory Spicer (@Greg_Spicer_) January 31, 2026

Organizationally, the Padres find themselves in this difficult position after operating recklessly for years under the assumption that their owner, who had just turned 60, would continue to finance a contender regardless of farm system health or market inflation.

Now, the team has no owner, no infrastructure for future success and no financial flexibility to retain, let alone improve, the roster. In hindsight, the Padres would have been better off avoiding  players like Xander Bogaerts, Juan Soto and Dylan Cease, even if those acquisitions felt exciting at the time.

It’s unfair to hold Preller primarily responsible for this outcome. He operated how any fanbase could hope: with unwavering aggressiveness toward building a winning team. He also did so under the assumption that the organization would continue to be run a certain way for years to come - an assumption that is no longer a reality. 

Imagine if the Dodgers’ ownership group suddenly disappeared and the organization was forced to find a buyer while carrying more than a billion dollars in deferred money. The Dodgers are not that unlucky, but the scenario illustrates how complicated ownership transitions can be.

Free-agent outfielder Kyle Tucker and the Los Angeles Dodgers are in agreement on a four-year, $240 million contract, according to sources familiar with the deal. It includes an opt out after year two.

— Robert Murray (@ByRobertMurray) January 16, 2026

Historically, teams tend to struggle during these changes. The Orioles were a mess under new ownership before finally stabilizing and putting together a strong offseason this year. The Mets were a league-wide laughingstock before Steve Cohen settled in and infused billions into the franchise.

It is simply difficult to function when nobody knows who is paying the bills, or how much they are willing to spend.

There is so much talent on the open market that the Padres are missing out on during this crucial offseason, as stars like Kyle Tucker, Bo Bichette, Alex Bregman and Kyle Schwarber land with National League rivals.

Even budget options such as Eugenio Suarez and Jorge Polanco have been out of reach. On the trade block, the Padres just don’t have the assets to make competitive offers for affordable talent. 

Slugger Eugenio Suárez and the Cincinnati Reds are in agreement on a one-year, $15 million contract that includes a mutual option for the 2027 season, sources tell ESPN. The best bat left on the market goes to Cincinnati, where he's expected to get most of his at-bats at DH.

— Jeff Passan (@JeffPassan) February 1, 2026

Freddy Peralta appeared to be a perfect fit, and players such as C.J. Abrams, Joe Ryan and Byron Buxton would all look great in a Padres uniform, but years of stripping the farm system have finally caught up to the organization.

When Preller committed to that strategy, it was under the assumption they could offset a depleted farm-system with aggressive spending in free agency. Now, they have no owner to foot the bill and a roster still expecting to compete in 2026.