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$200 million is the new $100 million


Jon Marthaler

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Forbes.com reported today that Major League baseball league-wide revenues jumped from $8 billion in 2013 to $9 billion in 2014, mostly due to the league's new national TV contracts and to revenue from MLB Advanced Media, the league's online streaming arm.

 

A look back: In 2001, revenue was $3.6 billion; adjusted for inflation, $4.66 billion in today's dollars, according to Forbes. That year, three MLB teams had payrolls over $100 million; the Yankees led the way with just over $112 million. 16 more had more than $50 million in payroll that season. Since then, revenue has doubled, more or less. The Dodgers had a $235 million payroll last year, and the Yankees nearly cleared the bar to $200 million as well. 14 other teams had payrolls of at least $100 million.

 

$200 million is the new $100 million, when it comes to payroll. $100 million is the new $50 million.

 

Since Target Field opened in 2010, the median MLB payroll has gone from $85 million to $107 million - right in line with revenue, which just like the median payroll, has jumped 25% in that five-year span. During that same period, the Twins' payroll has declined, from $98 million to $85million. Don't let the Twins fool you; they will try to tell you that they're spending plenty of money. They aren't.

 

Remember this the next time Terry Ryan or Dave St. Peter talks about being "fiscally responsible." Remember this the next time your neighbor complains about Joe Mauer's contract being the problem with the Twins. Remember that MLB's revenue explosion, and the great gobs of taxpayer money that funded Target Field, mean that the Twins are making more money now than they ever have before - indeed more money than they could ever have dreamed of.

 

They're just pocketing it, instead of spending it on improving the team.

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Hi Jon. Big fan. Love your work.

 

For people that always say SPEND! I just ask one thing: Outline specifically on who or what you would want that money spent on. 

 

I'm completely in agreement that I want to see them spend more but only to do so in the best interest of the team. You could give Kyle Kendrick a $15M a year contract to help spend that extra $30M the Twins will receive this year but I don't think that is in the best interest of the team. 

 

Kthxbai!

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Hi Parker! Thanks for reading my angry screed. Long time, first time, etc.

 

For people that always say SPEND! I just ask one thing: Outline specifically on who or what you would want that money spent on. 

 

What I want is for us to agree broadly on three points:

 

1. The Twins should not be using, "Well, we can't afford [name of player]" as an excuse. Yes, they can.

 

2. The Twins should not be using, "Well, we have to play Pelfrey / Nolasco / Hunter / whoever, because we're paying them $X.X million this year, and we can't just eat that contract." Yes they can. That's the real spending power, in MLB - the ability to ignore bad contracts from the past.

 

3. That money shouldn't disappear. The Twins spent $22 million less than the median payroll last year. Is there a year coming up in which they plan to spend $22 million more than the median?

 

You're asking me to identify specific players, which is a game I'll never win. You probably have ten reasons that each of Max Scherzer, Jon Lester, and James Shields sucks. You can probably tell me that the contracts they have signed, or will sign, are remarkably overvalued. And that's all fine.

 

Maybe Lester isn't worth the huge contract he just signed for. But he'd be an upgrade over Ricky Nolasco. And whether the Twins can "afford" him is a foolish discussion. Yes, they can.

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How bout trying to determine the bar at which the Twins should be operating?  is the streaming revenue and such allowing the Twins to operate at what should be a 120 million payroll or should the Twins be at 110 or up to 130.

 

As far as players to sign.  I kinda would have liked to see the Twins sign Neshek for the bullpen.  while 6 million a year for 2 years is too much.  Having a home town player who wants to be here that we would root for would be nice too.  I think the Twins could afford the extra 2 million per season or so over what the Twins would perceive as market value for the contract.

 

I get that we are not going to go out and sign a 25 million per year pitcher for 6 years. That's just too much risk or eggs in one basket.  but Liriano on a 3 year 39 million makes sense to me.

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What I want is for us to agree broadly on three points:

 

1. The Twins should not be using, "Well, we can't afford [name of player]" as an excuse. Yes, they can.

 

2. The Twins should not be using, "Well, we have to play Pelfrey / Nolasco / Hunter / whoever, because we're paying them $X.X million this year, and we can't just eat that contract." Yes they can. That's the real spending power, in MLB - the ability to ignore bad contracts from the past.

 

3. That money shouldn't disappear. The Twins spent $22 million less than the median payroll last year. Is there a year coming up in which they plan to spend $22 million more than the median?

 

 

1. I don't think they have ever directly used that line. It seems to be something that has been recited in the media echo chamber. 

 

2. I don't think that has been the issue as of late either. Unless Dave St. Peter was blowing smoke, the Twins tried to sign Garza and Ervin Santana after signing Hughes/Nolasco. 

 

http://twinsdaily.com/_/minnesota-twins-news/podcasts/no-juice-podcast-27-dave-st-peter-r3169

 

Other members of the front office had brought that up off the record as well. As it turns out, sometimes free agents just don't want to sign with teams for reason. It may say a lot about the status of the organization.

 

3. Also, if accurate, the Twins should be making an estimated $86M on TV revenue (their own + revenue sharing) in 2015. That would have covered their 2014 payroll. There is definitely money to spend this year. Depending on what their estimates are for revenue at Target Field this year, there should definitely be room for a payroll of $100-$130M without flinching. 

 

 

 

The one thing I do agree with the Twins on is avoiding long contracts. Those have a tendency of souring. I'd rather they overpay three times over for 2-3 year contract than try to sign a Jon Lester to a six-year deal. 

 

In the end, the Twins probably are in the situation where they may leave payroll money on the table that goes back to ownership. It is unappetizing but I do not think it is malicious or a money grab. 

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I like what both you and Parker are talking about here. The Twins shouldn't be worried about fielding a $100mil team. I think $125 is a reasonable expectation. The Twins, I believe, need to go out and find a veteran to play CF for a year, maybe 2. Yes, Byron Buxton is coming, but he's not here, and he may never be, as terrible as that sounds, and as much as I am an Aaron Hicks homer, 2 years after the experiment begun, do we think the third time will be the charm? Will Torii Hunter's alleged club house magic help Aaron Hicks see the light and become the player we all dreamed about after his breakout AA season?

 

I don't like the idea of spending money just to spend money, but I feel like to some degree the Twins need to continue to throw money at their problems while they have money to spend. This roster isn't going to be expensive for a few seasons unless they bring in FA help, and I think that's exactly what they should be doing.

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