The San Diego Padres reportedly had to take out a loan for about $50 million in September to address short-term cash flow issues and meet their obligations, which included player payroll, according to Evan Drellich, Dennis Lin and Ken Rosenthal of The Athletic.

Some officials in the sport suggest that concern should be tempered because the Padres were creditworthy enough to draw the loan, and it is commonplace among teams in MLB, according to Drellich. However, other officials who are briefed on the Padres' finances who were not authorized to speak publicly view the situation as concerning.

“If the question is, despite all the revenue growth, why would we need to be borrowing more money? I mean, you can connect those dots,” a Padres official unauthorized to speak publicly said, via Drellich and The Athletic. “The levels of payroll that we've been at have probably reasonably been in excess of what we could have supported, but it was part of the larger plan.”

The Padres started the 2023 with a payroll around $250 million, which was the third-most in baseball behind the New York Mets and New York Yankees. The Padres sold a lot of tickets, with a franchise record $3.3 million sold as a result of excitement for the team.

San Diego has Manny Machado, Xander Bogaerts, Yu Darvish and Fernando Tatis Jr. on lucrative contracts. The luxury-tax number as of right now is at $296 million. With Juan Soto likely set to make over $30 million in his final year of arbitration in 2024, the team could be incentivized to trade him.

The high payroll was not unexpected for the Padres and owner Peter Seidler. However, moving into 2024, the thinking of the organization is expected to run a payroll closer to $200 million, according to Drellich and The Athletic. That could lead to a Juan Soto trade, as he is unlikely to sign an extension.

The Padres and Peter Seidler are in a curious spot as a smaller market team that has spent a lot recently. It will be worth monitoring how sustainable it is for them in the near future.