Padres Reset With Soto Trade

Juan Soto helped reset fan expectations in his 16-month tenure with the Padres. (Photo: Jeff Nycz)

Just ten months after handing out a series of extensions that committed $538 million to Yu Darvish, Manny Machado, and Jake Cronenworth into the next decade, the Padres have traded Juan Soto and Trent Grisham to the New York Yankees for a package of big league-ready pitching in a move to begin to reset the financial realities facing the team in the coming years.

In exchange for a year of one of the league’s best offensive performers, the Padres add righties Michael King, Randy Vásquez, and Jhony Brito, who all made starts for the Yankees in 2023, prospect Drew Thorpe, and backup catcher Kyle Higashioka – and around $35 million in financial flexibility.

By moving so much salary, the Padres put themselves in a position to hit two financial targets for the 2024 campaign with enough flexibility to fill out the rest of their roster still. The club has been widely reported to want to get their actual payroll down into the range of $200 million. They also have major incentives to get their competitive balance tax total – which factors in the average annual value of players’ contracts, benefits, and the costs of 40-player roster members in the minors – under the $237 million threshold above which teams pay a surtax.

The Padres headed into the winter needing to replace more than 600 innings from starting pitchers who have left via free agency. In King, they get two years of cheap control of a starter who emerged as a late-bloomer for the Yankees over the last two years.

Vásquez and Brito – who both turn 26 before next season – could earn back-end rotation slots in spring training or open the year working out of the bullpen.

Brito has always worked with better command, though his fastball crept up to an average over 95 mph this year in Triple-A and held there across 90 big league innings. Though many had him pegged as a reliever earlier in his career, he should get every opportunity to start.

Vásquez’s high-spin breaking stuff has intrigued evaluators in recent years. While his 2.87 ERA in 37.2 big league innings helped the Yankees, his underlying numbers – fueled by a too-high 10.8% walk rate – were less impressive. His unique delivery and lack of command have always led to predictions of a relief role, and he likely heads to spring training behind Pedro Avila on the starter depth chart. He still has rookie eligibility left and should slot in the lower half of the organization’s top 30.

San Diego also bets on the upside of 23-year-old Thorpe, who reached Double-A as a starter in 2023 and will slot into the middle of the Padres’ top 10 prospects. The righty, a second-round pick out of Cal Poly in 2022, fits the profile of feel-first college starters who emerged as better professional pitchers working with Ruben Niebla in the Cleveland Guardians organization.

The Padres have been above the CBT threshold for two straight years, and last year blew past two additional penalty levels that increased the tax burden and penalized them 10 slots for their 2024 first-round draft pick. They also will receive less draft compensation for the departures of free agents Josh Hader and Blake Snell and would face significant draft pick and international free agency bonus pool penalties if they signed any free agent who received a qualifying offer.

Higashioka will serve as the veteran backup to Luis Campusano. The well-regarded receiver, who turns 34 next April, projects to earn $2.3 million in his last year of arbitration, a sum well below the going rate for comparable free agent options.

In all, staying as far above the threshold for the 2024 season as they were last year, would have cost the team more than $40 million in cash surtaxes. Getting even one dollar below the threshold resets the tax rates that build from year-to-year and eliminates the penalties tied to free agent and amateur talent acquisition.

With this trade, the Padres have about $45 million in actual salary and $33 million in CBT room to work with to stay below their targets. They still need to add at least one more big league-ready starter and now need to fill two outfield spots while also hoping to improve their first base options.