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Report: Padres Discussing Extension With Fernando Tatis Jr.

The Padres are in talks with star shortstop Fernando Tatis Jr. about a massive contract extension, Dominican news outlet Pio Deportes reports (Twitter link).  The deal would keep Tatis in San Diego into the next decade, as the extension is reportedly an 11-year pact worth $320MM.  According to both Pio Deportes and NBC Sports Bay Area’s Jessica Kleinschmidt (Twitter link), talks seem pretty advanced, as a source tells Kleinschmidt there is “ink on paper” but the deal still might not be finalized within the next week.

The $320MM figure would make Tatis’ extension the sixth-richest contract in baseball history, dropping teammate Manny Machado’s ten-year/$300MM pact down into seventh on the all-time list.  Between these two major deals, hefty contracts for Wil Myers and Eric Hosmer, and even the recent trades that brought Yu Darvish and Blake Snell to San Diego, Padres GM A.J. Preller and team ownership are again indicating that the team is prepared to spend at top-tier levels.

Hosmer’s deal runs through at least the 2025 season, Machado is signed through 2028 with an opt-out after the 2023 season, and the discussed terms of Tatis’ deal would lock him up through the 2031 campaign.  It seems quite possible that the Tatis extension will also include at least one opt-out, as since Tatis only just turned 22 years old, he and his agents at the MVP Sports Group might want at least one crack at entering the market (or extracting more years and money in a renegotiation with the Padres) during Tatis’ prime years.

Tatis is controlled through the 2024 season, via one pre-arbitration year and three years of arbitration eligibility.  The Padres famously placed Tatis on the roster for Opening Day 2019, eschewing a chance to keep him the minors long enough for the team to gain an extra year of control over his services — this decision immediately started Tatis’ service clock but gave the Padres more short-term opportunity in terms of getting a star product on the roster to help the big league team.

An extension would essentially make that debate a moot point, and given how Tatis has performed in the majors, one can hardly fault Preller and company for wanting to unleash him on MLB as quickly as possible.  Despite battling hamstring and back problems in his rookie year, Tatis has hit .301/.374/.582 with 39 homers and 27 steals (in 36 chances) over his 629 plate appearances in 2019-20.  This past season, Tatis earned a Silver Slugger Award and finished fourth in NL MVP voting.

There is obvious risk in committing such money to a player who is still so young, and has played the equivalent of essentially only one full season.  That said, it also makes sense for the Padres to take the leap on a player who showed such promise in the minors (much to the chagrin of the White Sox) and has already made a big impact in San Diego’s lineup.

It’s safe to assume that Tatis’ annual salaries throughout what would have been his arb years would be somewhat limited, in order to give the Padres more flexibility in terms of pure dollars while the money owed to Myers, Snell, and Drew Pomeranz gradually come off the books.  If Tatis’ big annual salaries don’t kick in until 2025, that leaves only Machado, Hosmer, and possibly Ha-Seong Kim (at an $11MM mutual option) still remaining on the payroll.

The Competitive Balance Tax is the other interesting wrinkle, as the average annual value of Tatis’ deal (a little over $29.09MM) would be counted against the Padres’ tax bill for all 11 seasons, no matter what Tatis made in terms of actual dollars.  Assuming Tatis’ extension begins in the 2021 season, San Diego would still have some flexibility under the $210MM tax threshold this year, as their current tax estimate is roughly $165.28MM.  Padres ownership also might not mind exceeding the CBT threshold for a season or two if such an expenditure landed the club a “final piece of the puzzle” type of player for a World Series contender.

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