The Economics of Ownership: Why Padres are Worth a Premium

“It seems as though it’s gotten less complicated, believe it or not, even as the prices of these franchises have gone up,” explains Corey Martin, Chair of Granderson Des Rochers, LLP’s Entertainment Finance Practice, a veteran of two decades of sports franchise sales. He attributes this simplification to a shrinking pool of potential buyers. “As the prices of these franchises have increased into the multiple billions of dollars, it’s really narrowed the pool of prospective buyers that would have the financial wherewithal to purchase these franchises.”

Four groups are currently vying for ownership of the Padres: Dan Friedkin (owner of AS Roma and OGC Nice), Joe Lacob (Golden State Warriors owner), Jose E. Feliciano (majority owner of Chelsea Football Club), and Tom Gores (Pistons owner and a 27% stakeholder in the Los Angeles Chargers). Each brings a proven track record of success in professional sports, suggesting a commitment to maintaining the Padres’ upward trajectory.

But what makes the Padres so desirable, potentially commanding a sale price flirting with $3.5 billion – exceeding the $2.4 billion Steve Cohen paid for the New York Mets in 2020? The answer lies in a confluence of factors, including the team’s on-field talent, the allure of the San Diego lifestyle, and a fundamental economic principle.

“San Diego, in a lot of respects, is emblematic of what people around the world see as the California lifestyle,” Martin notes. “San Diego is seen as a major market, a major brand with, if we’re being honest, some of the biggest stars in the entire sport.” Stars like Fernando Tatis Jr. and Manny Machado undoubtedly contribute to the team’s appeal.

However, the core driver is simple supply and demand. “There’s a very finite resource and the reality is that, even as expensive as they are, there are more people with the multiple billions of dollars required to buy these sports franchises than there are sports franchises available to be purchased,” Martin explains. “It’s purely supply and demand. The demand way outstrips the supply.”

While iconic franchises like the Dodgers or Yankees would likely fetch even higher prices if put on the market, the Padres are poised to become the most valuable MLB team in history, at least for now.

What Happens Next: From Agreement to Ownership

Once a winning bid is accepted, the process isn’t immediate. Martin estimates approximately two weeks to finalize the legal documentation. The real scrutiny begins with MLB ownership approval, requiring a 75% vote from existing team owners. This isn’t a rubber stamp; owners conduct thorough due diligence on potential partners.

“The longest part of the approval process is vetting, like vetting these individuals, vetting everything that they’ve done on the public record, what their business practices are and what their reputation is,” Martin clarifies. “When you have high-profile individuals like these, the vetting process is going to go very quickly. It’s going to be a pretty streamlined, seamless process.”

The fact that all four potential buyers already own other professional sports franchises expedites the process, as they are already known entities within the league. The Padres’ ownership group is also proactively conducting its own vetting, which other owners will likely leverage.

Looking at the recent sale of the Tampa Bay Rays – a deal finalized on July 15, approved by MLB owners on September 22, and officially completed on September 30 – provides a reasonable timeline. Padres fans could see a new ownership group in place as early as mid-July.

What impact will this change have on the fan experience? Will the new owners maintain the Padres’ commitment to player development and community engagement? These are questions on the minds of many Friar Faithful.

“You’re going to end up with someone who’s, I think, going to want to continue to invest in the team. These guys are very, very competitive. They want to win. They understand it. It takes money to win,” Martin assures. “There’s always going be a learning curve when you’re dealing with a new organization, new stakeholders, interpersonal dynamics at play. But in terms of knowing how to run a sports franchise and knowing what it takes to maximize the product on the field, which is what’s most important, any of these four potential bidders, I think, are going to do a great job.”

This sentiment echoes John Seidler’s stated priority: ensuring the new owners honor his late brother Peter’s vision for bringing a World Series title to San Diego. While such statements are common in high-stakes sales, they often reflect a genuine desire to preserve a legacy.

“A lot of these families that have owned these sports teams, it’s a big part of their legacy,” Martin concludes. “They want to make sure that if they’re passing that legacy on to someone else, it’s going to be in the right hands and that it’s going to be sold to a buyer who has the best interests of the city and the franchise in mind.”

For further insights into sports franchise valuations, consider exploring resources from Sportico, a leading publication covering the business of sports.

Frequently Asked Questions About the Padres Sale