OPINION:
I’m not sure if anyone heard celebratory screams coming from the owner’s box at Nationals Park on a recent Friday night when the news broke that the up-for-sale San Diego Padres fetched a record $3.9 billion purchase price.
But make no mistake, it was welcome news for the Lerner family — not so much for Washington baseball fans.
The $3.9 billion Padres sale, which still must be approved by 75% of major league franchise owners, would crush the previous record set in 2020, when Steve Cohen purchased the New York Mets for $2.4 billion.
It’s remarkable when you consider the Padres play in the 30th-ranked television market in the country. Washington ranks eighth.
The Lerners only have one way to do math — the one that makes them rich. It’s also often the one that sometimes doesn’t add up for those on the other side of the negotiating table. So it’s likely they saw the Padres deal and came to the delusional conclusion that when they put their team up for sale again — and many believe they will on the other side of the upcoming labor war — they’ll expect much more than the $2 billion they were offered when the team was on the market from 2022 to 2024.
How much more? Foolishly, probably Padres money more.
The Padres are an outlier to determine comparative franchise values to the Nationals. With the Chargers in Los Angeles, the Padres are the only game in town. The deal for Jose E. Feliciano and Kwanza Jones, plus other investors, also includes 25% ownership of Petco Park and a lucrative real estate development next to the ballpark.
The Padres are a top draw in baseball, bringing in more than three million fans annually for the past four years. The Padres bring in $484 million in revenue annually, while the Nationals only collect $314 million — near the bottom of baseball, according to CNBC.
The Nationals are not the Padres (although, ironically, Washington nearly became home to the Padres when the franchise was on the brink of moving to the District in 1974).
The Nationals compete with three other major sports franchises — the Commanders, Capitals and Wizards — for fan dollars and sponsorship money. The Nationals are tenants — not owners — of the ballpark.
And they struggle to attract fans, drawing less than two million a season for the last three years.
Even in the glory days of five playoff appearances and a World Series, the Nationals highest attendance was 2.6 million fans.
Plus one huge factor; The owner of the Padres, the late Peter Seidler and his family invested heavily in the product on the field, trading for and signing stars like Manny Machado, Fernando Tatis Jr. and Xander Bogaerts to hefty long-term contracts to make the team competitive and keep the ballpark filled. San Diego has made the playoffs twice in the last four years of winning seasons.
The Lerners have been among the cheapest owners in baseball, spending around $60 million the last three years on their active payroll, diminishing their attendance to bottom-feeding numbers over six straight losing seasons.
The Nationals are not the Padres.
They are not the Mets, either, but that hasn’t stopped the Lerners from losing money year after year on a stadium naming rights deal, as they have sought one that would be more than the highest-priced deal in baseball — the $20 million annual payment to the Mets by Citigroup.
In 2021, the Lerners were ready to sign a naming rights agreement, according to sources. The deal was ready to be finalized with an unnamed New York financial fund for $18 million annually for an undetermined number of years, sources said. But the company walked away from the negotiations out of frustration with the Lerners when the family upped the price to — guess what? — $20 million a year. The Padres sale has implications far beyond Washington.
It may be exhibit one when the owners plead poverty in the upcoming labor talks with the players and the players respond with this math — a small market team like the Padres is bought for $800 million in 2012 and is about to sell for nearly five times as much in a matter of 14 years. Salary cap? Really?
But here in Washington, it will likely slow down to a near-grueling halt — a difficult process to sell the baseball team if and when the Nationals are on the market again.
• Catch Thom Loverro on “The Kevin Sheehan Show” podcast.
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