Before we begin let me get one thing out of the way, the Twins are making money. The team is profiting and the owner is increasing his wealth by retaining ownership of the team. There is no doubt about that. As a business professional I can accept this as the way of the world and I am OK with it. However, as a fan I don’t care about earnings and wish the front office had added Lance Lyn and Yu Darvish this offseason. Maybe, though, even as a fan I should care about earnings. At least a little bit.

The way that teams earn their money these days is vastly different than it used to be. Once upon a time I imagine that ticket sales were the main thing on the mind of every front office executive. Tickets were likely what made or broke a team not long ago. But in today’s world things are different. With MLB Advanced Media, Local TV and Radio Agreements, and the National TV deal for MLB generating revenue for each team, an organization that had 0 fans at all 82 of their home games could still turn a profit with a moderate MLB Payroll (see: Miami Marlins). As fans it is tough to stomach any team in MLB managed in such a way as the Marlins are, but it really says a lot about the strength of the game, and the games ability to produce revenue that a team’s management can see their best strategy for making money as also one that will garner them the least amount of fan support. It really is mind boggling.

The best strategy for the Twins, at least at this moment in time, appears to be winning more games, and bringing more fans to Target Field in order to make more money. This makes us both happy and proud of our team. It is important that we understand that they are running a business and are also trying to make as much money as possible. It is part of Dave St Peters job as President and CEO to increase the profits the team makes each year. Even as fans we should remember that making bad baseball decisions can lead to a decrease in profits, and a decrease in profits is just the sort of thing that would make a stingy team owner feel justified in cutting the payroll in half.

What I’m trying to say is that a team’s earnings matter, that earnings determine what the team is able to do in free agency. This is because owners care about earnings just as much as we care about our paychecks. Last year, for example, the Seattle Mariners had a payroll of $172M, and drew just 2.1M fans. Did they earn money in 2017? Yes. Was the team owner happy with the amount of earnings relative to the amount of money spent? Probably not.

On the other end of the spectrum the San Diego Padres and their League low payroll of $49M in 2017. The Padres actually had total attendance of 3,000 more fans than did the Mariners, and with the lower payroll the team likely had earnings of over $100M more than the Mariners.

Case in point, the offseason activities of both of these teams is predictable given their results. The Mariners payroll is down 7% from last year, while the Padres spent the third most of any team in free agency this winter.

The Twins payroll projected to climb about 24% in 2018. As a result, it may be difficult for the team’s earnings to keep pace with the spending this year. The Pohlads will still get a fat check at the end of the year, it’s just that it may be less than it was last year. And frankly, they don’t pay the teams management to make them less money. They are paying them to make more.

So what will it take in 2018 to make the owners happy? My guess is that Falvey and Levine are already preparing for this with phrases like “recovering from rock bottom attendance” and “Investing in the future”. That said, an earnings increase is still well within reach.

In an earlier blog post I projected attendance would increase by 6.7% over 2017, bringing to attendance up to just under 2.2M. And while I think that is a fair increase, I’m projecting that if they were to finish there the teams earnings after all the bills are paid would actually be $7M less in 2018 than 2017. The team would still make a very significant profit, just that it would be $7M less than last year. Or, in baseball terms, good relief pitching money.

So the goal should be to keep profits in 2018 even with 2017 after the increase in payroll. To do so attendance would actually have to increase about 13% over 2017, which would bring them into the neighborhood of 2.3M fans for the year.

And how much is 13%? It rolls off the tongue easily and one might say it sounds reasonable. But given the fact that attendance has only increased 13% or more four times since 1990, with one of those times being after a strike and another after a new stadium, I’d say 13% will be a difficult number to achieve. But it will be worth keeping an eye on. And to help out with earnings, let’s be sure to buy our beers inside the stadium instead of across the street at Kierans, it’s for the good of the team.