One year after making significant changes to their franchise by reducing payroll and trading Juan Soto to the Yankees, the Padres are once again facing financial challenges. The team is expected to maintain a payroll of $169M heading into 2025, just below the luxury tax threshold of $241M. However, projections show that the payroll is currently just under $210M, with a luxury tax payroll of $244M. This means the Padres need to reduce payroll by around $40M this offseason while still making necessary additions to the team.
The Padres will need to add a starter to complement Dylan Cease, Michael King, and Yu Darvish. The departure of Jurickson Profar leaves a gap in left field, and the losses of David Peralta and Donovan Solano weaken the lineup. Addressing these issues while reducing payroll will be a challenge for the front office.
One option to cut payroll is trading Luis Arraez, who played well during his time with the Padres but has some deficiencies in his hitting profile. Arraez’s contact ability makes him an attractive trade piece, and moving him could significantly reduce the team’s payroll. Finding a suitable replacement for Arraez at first base should be feasible given the options available in the market.
Alternatively, the Padres could explore extending Arraez’s contract to alleviate immediate payroll concerns. Back-loading the deal or offering a lower average annual value could help the team stay under the luxury tax threshold. However, this approach may create financial challenges in the long term.
