The San Diego Padres Found a Way to Monetize Bad Baseball

By building a promotion around poor on-field performance, the team may have offered a grim look at the future of one of pro sports’ most controversial practices: tanking.

The San Diego Padres' Hunter Renfroe (right) celebrates with his teammate Austin Hedges.
The San Diego Padres' Hunter Renfroe (right) celebrates with his teammate Austin Hedges (18) after hitting a three-run home run in the third inning of a baseball game against the Seattle Mariners on August 29, 2018. (Gregory Bull / AP)

The San Diego Padres just wrapped up one of the odder promotions in baseball history. For $99, a fan could purchase a “Five-Win Pass,” which provided a ticket to every home game until either the team won five or the season ended, on September 30. The deal rested on a simple fact: The Padres are bad. After the offer went into effect on July 27, it took 17 games in their native Petco Park for them to win five. In other words, a fan who bought in early could have gotten 12 extra tickets for their investment—a great deal, as long as they didn’t mind watching awful baseball.

The promotion, which ended Wednesday, wasn’t technically new; the Padres first offered the deal during their mediocre 2017 season. Still, the Five-Win Pass’s very existence all but explicitly says the Padres’ owners and management have little interest in winning. As such, the bargain offers important insights into the flawed incentive system (both in Major League Baseball and in other leagues) that has generated one of the most controversial practices in pro sports: tanking.

Tanking is, in essence, losing now in order to win later. It’s not to be confused with players throwing games, à la the infamous 1919 World Series–losing Chicago White Sox; players on a tanking team are usually still trying their hardest. The decision is more top-down, made by executives who know they can’t field a championship-caliber team this year (or next). Except in the most brazen cases, tanking is also hard to distinguish from simply losing, which makes it a difficult strategy to accurately track. Tanking teams may mask the practice behind injuries, financial concerns, or a preference for developing young, unproven players with lots of potential over playing veterans who are known quantities. Meanwhile, an incompetent or simply unlucky squad can stumble into a position where they appear to be tanking (as is arguably the case with this year’s Padres).

Still, the practice is common enough that there’s a defined and describable tanking strategy. A team’s owners and managers purposefully put out a roster of subpar players knowing that a worse record means a better pick in that year’s draft. And that in turn means a better chance of choosing a player who could become a superstar a few years down the line. The team trades proven veterans for more draft picks or, in MLB—unique among American leagues for its robust player-development system—for prospects currently part of other teams in the minor leagues. In a few years, those no-longer youngsters will be ready to vault their organization into championship contention.

At least that’s how tanking works in theory. In practice, there are a few problems. The first, David Berri, a sports economist and professor at Southern Utah University, told me, is that building a championship-caliber roster via tanking is actually quite hard. “The draft in baseball is the least reliable way to build,” he said, “because you frankly have no idea when you’re looking at a college player—or, especially, a high-school player—whether they really are going to be able to handle major-league talent.” That’s particularly true in baseball, in which it may take several years of practice and learning for even the best prospects to reach the big leagues, compared with basketball or football, in which a top draft pick could begin contributing in mere months. Though tanking arguably worked for the past two World Series winners, Berri noted that those successful teams relied on more than just good drafting: The 2016 Chicago Cubs and 2017 Houston Astros both needed veteran players acquired in free agency or via trades made during their championship season to push them over the top.

But building the conventional way, by trading for and signing veterans, can be risky as well, especially for the person who oversees roster decisions: the general manager. As Berri pointed out, good players don’t typically become available until several years into their careers, at which point they may be on the verge of, or already in, physical decline. Overspending on just one such player (as the Padres did in February, by signing the 28-year-old first baseman Eric Hosmer to an exorbitant eight-year contract) can quickly jeopardize a team’s short-term viability.

The second problem with tanking is that it risks turning off fans who don’t want to watch a terrible team on TV, let alone pay to do so in person. Berri noted that this type of audience dissatisfaction used to be more of a pressing challenge, but that modern leagues have largely stamped out the financial incentives for middling organizations to avoid bottoming out. “If you go back to baseball or any sport 50 years ago or so, the revenue that the team brought in was based on your gate receipts, and gate receipts were based on whether you won or not,” Berri said. “But today, there’s a big chunk of what we call ‘fixed revenues’ that are not related to winning. The national-broadcasting deal [that MLB reached in 2012 with ESPN, Fox, and Turner Broadcasting] is a great example of this: You collect that money whether you win or you don’t win. Because that revenue exists, you don’t have to field a winning team, because you already have revenue coming in regardless.”

That may help explain why more teams seem to be embracing tanking—to the point where some leagues, particularly the National Basketball Association, are trying to stop the practice. Perhaps the most famous example of a tanking team is the NBA’s Philadelphia 76ers. Under General Manager Sam Hinkie, the 76ers embarked on what fans dubbed the “Process,” a multiyear road to contention that began with diving into one of the worst five-year stretches in NBA history. Whether the resulting team wins a championship remains to be seen; nevertheless, fans cheered the approach, exhorting one another to “trust the Process” and ridiculing Philadelphia’s front office for ousting Hinkie in 2016 before his master plan could come to fruition.

Ironically, the Padres by all appearances entered the season looking to succeed the traditional way, touting the Hosmer signing as proof they were on the upswing. As it became clear the team was, if anything, worse than last year’s, the front office apparently retooled, trading their lone 2018 All-Star for a top prospect who could help them win down the line. (The Padres are also far from the worst team in baseball; that distinction goes to the Kansas City Royals or the Baltimore Orioles, neither of whom is expected to win more than a third of their games for the season.)

Now the Padres’ front office seems to be pioneering a way to actively profit off of their poor performance. Offering the Five-Win Pass not just once but two years in a row appears to reflect a commitment to a strategy of slashing prices and marketing around losing for the short term rather than trying to convince fans the team has a chance at conventional success. Meanwhile, fans who purchased the pass had a vested interest in the team losing—both because it could lead to a championship down the road and because every home loss made that $99 a better investment. As such, the deal may just be the closest a team has ever come to explicitly telling their fans that they should want the team to fail.

With so many teams across professional sports apparently racing to the bottom, it may be just a matter of time before others take the Padres’ business model even further, building their financial plans around tanking from the beginning of the season rather than keeping up the facade that they’re trying to win until they’re officially out of contention. That would be bad news for a whole host of people, from fans who just want to watch good games to players hoping that contending teams will compete for their services to the leagues themselves, which, many analysts argue, have a responsibility to ensure the highest standard of competition possible.

If leagues accept this responsibility, they could theoretically take real steps to stop tanking. Fining teams perceived to be tanking won’t work by itself; as The Washington Post’s Tim Bontemps noted, doing so without actually changing the broader incentive structures will only succeed in making organizations slightly less brazen about the practice. Recognizing the persistence of the problem, many analysts and insiders have suggested retooling sports’ drafts to no longer reward the worst teams; some, including at least one NBA head coach, have even called for getting rid of drafts altogether. (The NBA has already begun tweaking its draft, although FiveThirtyEight’s Neil Paine and others have expressed skepticism that the changes will have the desired effect.)

Another option, Berri says, would be to restructure rookie contracts so players enter free agency earlier in their careers, which would reduce the incentives to tank in two main ways. First, it would make building through free agency more attractive, as young players are less likely to be on the verge of a steep decline than older ones. Second, it would make tanking less attractive: Without the guarantee that drafted players will be around for their peak years, teams would have less time to stockpile assets to build into a winning team.

Absent these kinds of changes, leagues run the risk of allowing tanking to become just another accepted part of the sports landscape. Already, many worry that the rise of so-called superteams has made leagues too top-heavy. Permitting teams to not just tank but to also find new ways to monetize the practice would only create further stratification, and alienate fans whose only interest is in watching the best games possible.