The San Diego Padres shocked the baseball world this past off-season with a series of trades and free agent signings that shook up the roster, leading to what many at the time called the most improved team in the National League and a legitimate World Series contender.
Five months later, the Padres are 44-52, 10.5 games back in the NL West as on July 24, and it looks like they are going to try to trade away some of the very players they went all-in on, including pitcher James Shields whom they signed this past winter as a free agent, as well as outfielder Justin Upton and closer Craig Kimbrel who both came via trades.
The problem for the Padres now is not just the amount they paid up front in terms of salaries and prospects and the little return they have seen so far, but it is how they went about it.
When the Padres traded for Matt Kemp, they received $US32 million from the Dodgers to offset some of the $US107 million remaining on Kemp’s deal. However, instead of spreading that money over the five years left on the contract, the Padres received $US18 million up front. That meant the Padres would only owe Kemp $US3 million this year but at the same time they would have to pay him $US18 million per year for the next four years.
Likewise in Shields’ contract, the Padres are paying him just $US10 million this season with his salary jumping to $US21 million each of the next three years.
Despite adding a ton of expensive players — including little-used Melvin Upton who’s contract (three years, $US46.4 million) the Padres had to take in order to trade for Kimbrel — the payroll this season only jumped from ~$US91 million to ~$US108 million.
The feeling was that the Padres were going all-in for the 2015 season which would generate not only a playoff team, hopefully, but also a lot more revenue due to fan excitement to pay for the payroll which will go way up next season.
But things have gone so horribly wrong that the Padres not only still owe players like Kemp and Upton more than they are worth for the next several years, they are probably going to lose millions trading away Shields.
By back-loading Shields’ deal, he is going to be grossly overpaid the next few years, to the tune of three-years, $US65 million. As Buster Olney pointed out on his “Baseball Tonight” podcast, no team would pay that much in free agency for a pitcher like Shields, who will be 34 next season.
“I had one executive say to me, with another team, ‘if James Shields was a free agent in the fall, what would you give him?’ And the estimates I heard from this general manager were in the range of 3-years, $US45 million. I heard more like 3 (years) for $US36 (million), 3 (years) for $US39 (million) from some other agents and executives. So what that means is that if the Padres actually decide to trade James Shields they might have to conceivably eat some money, because I don’t think anybody would, for a pitcher who has an ERA on the road over 5.00 this year and is going to be 34 next season, be willing to pay 3-years and $US65 million.”
If a team wouldn’t do that in free agency they certainly are not going to pay that much and give up prospects. In other words, the Padres will have to eat at least $US20 million of the money still owed to Shields and maybe more if they actually want good prospects in return.
Olney also notes that trading Kimbrel is problematic because there are a ton of other closers available, which will drive down the prices.
In the end, the Padres may be able to unload some of the contracts they took on last winter and they may be able to recoup some of the lost prospects in the form of new prospects. But at the very least, they lost an entire year in the rebuilding process as they are going to have to hit the reset button and it will cost them millions to do so.
And all of this doesn’t include the long-term impact of scaring away future free agents who are looking to settle in one place for several years. The players and agents will see what is happening to Shields and others and will at the very least they will hesitate.
That is a disaster.
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