Every time the Padres have gone up for sale, would-be buyers were confronted by several puzzles — be they financial, political, legal or baseball-intensive.
The puzzles weren’t limited to Padres Land.
Major League Baseball’s inner workings had to be understood. So did factors outside MLB, such as interest rates on large private loans.
It’s puzzle time once again. This week, Padres chairman John Seidler announced he’s open to selling the team.
If a sale happens — and MLB commissioner Rob Manfred’s statement favored that outcome — here’s what I want for baseball’s hungriest fan base:
The Padres’ next control person brings A+ stewardship skills and wealth by MLB standards and has much-needed good luck awaiting him or her. This leads to small-market San Diego winning its first World Series title. And, unlike with the most recent small-market club winning the World Series — the 2015 Kansas City Royals — the Padres don’t endure eons of noncompetitiveness on both sides of the breakthrough season.
Here’s what I know will happen: would-be buyers of the Padres will be challenged by extra-tricky puzzles to figure out.
It has been 13 years since the Padres were so open to being sold.
This time around, things look more complicated.
What stands out most are variables outside the Padres.
They’ve become more complex. And, frankly, staggering.
Begin with this mind-blowing development:
MLB has embraced sports gambling to the point that some sports investment analysts argue that an investment in MLB (as with the NFL and the NBA) equates to investing in the gaming industry.
Set aside, for now, the moral implications of a publicly subsidized sports league increasing its efforts to stimulate and facilitate a behavior that can be addictive and do great harm to bettors and their loved ones.
Is an MLB team a riskier investment if its fortunes are aligned with the gaming industry? And if the gaming industry relationship is serving to inflate player salaries, are rising franchise valuations well-supported?
Concerning a Padres sale, there’s another outside factor to consider that’s unique to this time.
There are people who have accumulated wealth that’s so great that even ordinary billionaires see them as more able to distort the MLB market.
For these uber-wealthy folks, an MLB team is a toy. Their margins are so great that a purchase of much more than a billion bucks needn’t be a value-driven investment.
A baseball owner can distort the whole salary market easier than owners can in the NFL, where a salary cap and a franchise tag limit the influence of any owner no matter how wealthy.
On the counterfactual side: “Is this Doomsday 2.0 or 3.0?” is a frequent quip of MLB player agent Scott Boras, highlighting a truth across many decades that MLB’s rising player salaries have been accompanied by rising industry revenues and franchise valuations.
MLB’s attempt to replace the collective bargaining agreement, which expires after the 2026 season, will put would-be Padres investors to another dicey test.
Potential solution: opt to buy a small stake in the team, buying time until CBA negotiations produce hard facts. Such smaller, cash-flow-driven investments have become more common.
Let’s go to the Padres’ puzzle, and one of several key elements unique to the club.
Investors will try to figure out if this is a distress sale.
This will entail learning more about the reason for, and the fallout from, the lawsuit filed earlier this year that involved three club shareholders who are familial survivors of Peter Seidler, the team chairman and control person who died in November 2023 after lengthy health issues.
Peter Seidler and many others bought into the Padres in August 2012. Within that group were several of Seidler’s family members and Alfredo Harp Helú, a Mexican businessman who owns two baseball clubs in Mexico.
San Diego businessman Ron Fowler was in the group, too. And it was Fowler, not Peter Seidler, who was approved by Major League Baseball as the control person.
Fowler remained the control person until five years ago, when he stepped down as executive chairman and Peter Seidler was approved by MLB owners. Harp Helú, 81, remains among the team’s shareholders.
The lawsuit filed by Peter Seidler’s widow, Sheel, alleged that Seidler’s brothers Matt and Bob breached their fiduciary duty as trustees and denied her the opportunity to succeed her late husband as the Padres’ control person. The Seidler brothers denied those accusations.
Matt and Bob Seidler are high-ranking members of the Seidler Equity Partners firm, which Peter Seidler co-founded and helped to oversee for 30 years until soon before his death.
A potential investor in the Padres likely would be interested to know what role Seidler Equity Partners played in Peter Seidler’s purchase into the club in 2012 and what role, if any, Sheel Seidler’s lawsuit played in the decision to open the club up to a sale.
A potential buyer would presumably insist on access to details within the legal dispute that might affect the franchise’s value. Such access could be bound by a non-disclosure agreement and perhaps come under court supervision.
There’s a whole lot else to consider here.
For now, that’s enough to spin investors’ minds with RPMs worthy of Nick Pivetta’s curveball.