Twins Front Office Talk Payroll, Twitter Sounds Off

[abrdabrfan]

I think Gleeman's got a very valid point. If the money in baseball isn't used, the other 50% of revenue goes to the ownership.

 

How is this not more of a talking point/area of frustration with other team's fan bases? Are other teams in similar situations as the Twins better at PR and controlling the spin of message? 

The other 50 % does not go to ownership. Does anyone know what the other expenses besides payroll add up to? Until you know that, you have no idea how much money is to the owners, if any at all. Until you know all the day to day operating expenses of doing business, you can't know how much profit there is.

[Mike Sixel]

So, the other 50% went up at the same rate as player salaries? That seems unlikely to me, possible, but unlikely.

[tobi0040]

 

The other 50 % does not go to ownership. Does anyone know what the other expenses besides payroll add up to? Until you know that, you have no idea how much money is to the owners, if any at all. Until you know all the day to day operating expenses of doing business, you can't know how much profit there is.

Forbes is a reasonable third party and they calculate the other operating costs and a profit. The other 50% does not go right to the owners, but they are seeing their share of profits and have for some time.

[abrdabrfan]

I find the arguments for a higher payroll ironic. In order to have a higher payroll, some of the young cheap players would not be playing on the major league roster. Santana would not have been called up had the Twins signed a center fielder last offseason. Deduno and the rotation of AAA replacements would not have taken the 5th rotation spot. Colabello's hot April would not have happened. Parmalee would still be at AAA. A free agent shortstop would have thankfully saved us from Florimon's poor season and Escobar's emergence as a starter.

 

If you have been arguing for the Twins to play the young players you have little ground to support your argument for a higher payroll. You can't expect the team to do both. Would a random free agent center fielder have provided the same production as Santana? Santana cost the major league minimum, the free agent several million? Would the Twins have won more games with a $7 million center fielder?

 

If you want the Twins to spend money on free agents that means the roster spots for those young players that you are itching to see 'take their lumps' at the major league level will have to stay at AAA.

I'm going to use this post to follow up on because it ties in with a lot of thoughts I have had about this whole thing. Not only going forward, but for what happened last off season. I was not in favor of spending big last season, because I thought the options were not that great (other than I agreed with the Hughes signing). I thought they should have saved their resources and spent this year, finding out what they had in the young players, and then spent this off season supplementing the roster. 

Now, that being said, most of that would not have worked out anyhow, because of the injuries to the 2 main guys that need to be a part of the future.

 

Which leads me to this off season. Because a lot of things are still up in the air regarding what they really have in the minors, I don't think the timing is right to spend big this off season either, as much as I had hoped that the process would be further along by now.

 

If they had not spent $49 million dollars on Nolasco last year to silence the critics in the fan base, do you suppose that maybe one of the big three aces might be within the payroll boundaries this year? I think Ryan spent that money last year at the request of the owner, because he was tired of losing, too.

 

This coming year, it would be wise to sit back and see where things fall in place with the young guys. Wait it out, because if you spend the money now, which translates into contracts that will still be around in 3 - 4 years (ala Nolasco), you may not have budget available to plug the holes that exist when the young guys start to jell. Along with that, a couple years down the road, money will be needed to extend players like Gibson and Dozier and Arcia as they approach arbitration, and then Buxton and Sano and Meyer and the rest of the next wave.

 

Not saying that there are not some short term solutions out there that could offer up better production for next year in CF or LF for instance, but do you really want to tie up that position with a short timer, or use it to test the young guys that you have and need to make decisions about, such as Parmalee and Hicks and Jordan, and eventually Buxton and maybe even Sano.

 

The starting pitching situation has not been good, but do they really want to bring in more bodies at this point, or find out what they have in house. Can Nolasco turn it around and be what they thought he was? Can Gibson take a step forward? Is Hughes really that good? What are Meyer and May capable of? Can Milone return to his previous form? Are any of the remaining AAAA pitchers capable of filling in rotation spots when injuries arise, as they always do? If you add another expensive addition to this mix, how do you answer these questions?

 

The bottom line is, I think that is probably what the Twins intend to do next year, and they are trying to prepare us for that. 

 

And I think I can be happy seeing the next wave of young players take the field and prove what they can do.

[tobi0040]

I'm going to use this post to follow up on because it ties in with a lot of thoughts I have had about this whole thing. Not only going forward, but for what happened last off season. I was not in favor of spending big last season, because I thought the options were not that great (other than I agreed with the Hughes signing). I thought they should have saved their resources and spent this year, finding out what they had in the young players, and then spent this off season supplementing the roster. 

Now, that being said, most of that would not have worked out anyhow, because of the injuries to the 2 main guys that need to be a part of the future.

 

Which leads me to this off season. Because a lot of things are still up in the air regarding what they really have in the minors, I don't think the timing is right to spend big this off season either, as much as I had hoped that the process would be further along by now.

 

If they had not spent $49 million dollars on Nolasco last year to silence the critics in the fan base, do you suppose that maybe one of the big three aces might be within the payroll boundaries this year? I think Ryan spent that money last year at the request of the owner, because he was tired of losing, too.

 

This coming year, it would be wise to sit back and see where things fall in place with the young guys. Wait it out, because if you spend the money now, which translates into contracts that will still be around in 3 - 4 years (ala Nolasco), you may not have budget available to plug the holes that exist when the young guys start to jell. Along with that, a couple years down the road, money will be needed to extend players like Gibson and Dozier and Arcia as they approach arbitration, and then Buxton and Sano and Meyer and the rest of the next wave.

 

Not saying that there are not some short term solutions out there that could offer up better production for next year in CF or LF for instance, but do you really want to tie up that position with a short timer, or use it to test the young guys that you have and need to make decisions about, such as Parmalee and Hicks and Jordan, and eventually Buxton and maybe even Sano.

 

The starting pitching situation has not been good, but do they really want to bring in more bodies at this point, or find out what they have in house. Can Nolasco turn it around and be what they thought he was? Can Gibson take a step forward? Is Hughes really that good? What are Meyer and May capable of? Can Milone return to his previous form? Are any of the remaining AAAA pitchers capable of filling in rotation spots when injuries arise, as they always do? If you add another expensive addition to this mix, how do you answer these questions?

 

The bottom line is, I think that is probably what the Twins intend to do next year, and they are trying to prepare us for that. 

 

And I think I can be happy seeing the next wave of young players take the field and prove what they can do.

 

I think this team needs more talent.  You don't block Sano or Buxton but the rest you look to upgrade.  The cream always rises to the top.  If Santana is going to be a career .319 hitter we will find a spot for him.

 

 

I would add a Rasmus type and Ervin Santana.  Going into the season with three veteran pitchers (Ervin, Hughes, and Nolasco) and three rookie/young guys (Gibson, Meyer, and May) is not too much pitching.  The odds of all six being effective and healthy are extremely low and worst case, May goes to the pen for awhile.  Not the end of the world.

 

As far as what I think will happen, that is much different. I also agree that they are lowering the bar because they won't be signing anyone of value this off-season.  They see the season ticket renewals and forecast a drop in revenue.  Unfortunately they don't understand the connection between product and revenue, nor do they understand the lack of renewals also means the fan base has no confidence they will improve the team.

[nicksaviking]

Yes, ~$40 mil as of opening day 2014.

 

However, there is virtually no difference between 28th and 24th ($8 mil), or even 28th and 18th, for that matter ($15 mil, or just over Kendrys Morales' full season salary in 2014).  The Twins are basically in the same lump of teams as they were pre-Target Field and post-contraction/Don Beaver.

 

An aside: if autocorrect changes my "Morales" to "Molasses", that's still correct on some level, right?

 

I'm not sure about the payroll disparity between 24th and 30th, but to your last point, yes I'd agree there is virtually no difference between Morales and molasses.

[abrdabrfan]

Just a few comments regarding the posts in this section. I understand the frustrations of 4 straight bottom end seasons, but we Twins fans who have been around a long time know what happens during a rebuild. We do not have the resources of the Yankees. Imagine if you would what kind of shape the Twins franchise would be in if they had made all the mistakes the Yankees have made. It would take them years to recover. That is why the Twins do not make those kinds of expensive signings. Even the relatively small signing of Nolasco (in comparison to some of the large market signings), could cripple the Twins rebuild if he doesn't turn it around. Even the best baseball minds can't predict when these contracts can blow up.

 

The point I want to make is that the posters here all seem to think they know better than TR what is best for the Twins. What you seem to forget is that there are a 100 or more of some of the best baseball minds in the country are right now gathered together to steer the Twins through another off season, and why should we think that we know more than that group of people about what is best for the Twins. 

 

At the very least, we really have no idea what is involved in a lot of the decisions that are made about the baseball operation. Many of those decisions will have long term ramifications that we as outsiders would not even have thought of. Best to leave those decisions to the experts, and hope they make better decisions than the Yankees have.

[Willihammer]

I'm going to use this post to follow up on because it ties in with a lot of thoughts I have had about this whole thing. Not only going forward, but for what happened last off season. I was not in favor of spending big last season, because I thought the options were not that great (other than I agreed with the Hughes signing). I thought they should have saved their resources and spent this year, finding out what they had in the young players, and then spent this off season supplementing the roster. 

Now, that being said, most of that would not have worked out anyhow, because of the injuries to the 2 main guys that need to be a part of the future.

 

Which leads me to this off season. Because a lot of things are still up in the air regarding what they really have in the minors, I don't think the timing is right to spend big this off season either, as much as I had hoped that the process would be further along by now.

 

If they had not spent $49 million dollars on Nolasco last year to silence the critics in the fan base, do you suppose that maybe one of the big three aces might be within the payroll boundaries this year? I think Ryan spent that money last year at the request of the owner, because he was tired of losing, too.

 

This coming year, it would be wise to sit back and see where things fall in place with the young guys. Wait it out, because if you spend the money now, which translates into contracts that will still be around in 3 - 4 years (ala Nolasco), you may not have budget available to plug the holes that exist when the young guys start to jell. Along with that, a couple years down the road, money will be needed to extend players like Gibson and Dozier and Arcia as they approach arbitration, and then Buxton and Sano and Meyer and the rest of the next wave.

First, welcome to the forums. Second, Buxton and Sano are two players. Young, unproven, recovering-from-serious-injuries, haven't-touched-AAA players. I don't care if you're waiting on Chipper Jones and Kenny Lofton, its a horrible idea to put the entire operation on standby over two lousy prospects.

 

Thirdly, if you watched the games last season you found out a lot of the pieces are here.

 

The iron is hot. And its not Buxton or Sano applying the heat.

[tobi0040]

First, welcome to the forums. Second, Buxton and Sano are two players. Young, unproven, recovering-from-serious-injuries, haven't-touched-AAA players. I don't care if you're waiting on Chipper Jones and Kenny Lofton, its a horrible idea to put the entire operation on standby over two lousy prospects.

 

Thirdly, if you watched the games last season you found out a lot of the pieces are here.

 

The iron is hot. And its not Buxton or Sano applying the heat.

 

I don't think we are blocking any meaningful players by signing one starter and a LF next year.  If we give Ervin 3-45 and Rasmus 3-24 or 3-27 we are not killing future payroll.    Ervin becomes our best or second best pitcher and Rasmus improves our team defensively and offensively.  Plus adds flexibility in the event we have another CF debacle and he is only 28.

[jay]

It seems fairly clear to me that the Twins are never going to lose money on this team and about 15 teams have lost money in at least one year over this stretch.  Some teams like the Tigers, Yankees, and Dodgers have done so in multiple years.  The Twins will never be in that group. So I don't see how we are middle of the road at all.

 

Thanks for doing some research.  I definitely agree with you the Twins are not likely to be the Tigers, Yankees or Dodgers in their financial approach.  However, those teams aren't middle of the road -- they are the extreme.  Not being in that group doesn't mean the Twins aren't similar to the majority of teams.  Now, that doesn't mean they spend or profit as much on an absolute basis -- I'm talking on a relative basis.  

 

The 50-52% of revenues thing comes from somewhere, right?  The Twins didn't just randomly invent it on their own.  It's an industry standard.  Do some teams exceed that?  Sure... but if the Twins are following the industry standard (which granted, some people question), doesn't that by definition put their approach in line with the majority of teams?

[tobi0040]

Thanks for doing some research.  I definitely agree with you the Twins are not likely to be the Tigers, Yankees or Dodgers in their financial approach.  However, those teams aren't middle of the road -- they are the extreme.  Not being in that group doesn't mean the Twins aren't similar to the majority of teams.  Now, that doesn't mean they spend or profit as much on an absolute basis -- I'm talking on a relative basis.  

 

The 50-52% of revenues thing comes from somewhere, right?  The Twins didn't just randomly invent it on their own.  It's an industry standard.  Do some teams exceed that?  Sure... but if the Twins are following the industry standard (which granted, some people question), doesn't that by definition put their approach in line with the majority of teams?

 

It is fair to me, looking at 10 years of data to conclude the Twins are not a team that will ever lose money in a given year.  If they didn't lose any money from 2006-2009 they certainly won't in Target field.  11 teams lost money last year and in each of the other few years I looked, 2-4 teams lost money.  So let's just assume that over the last 10 years, 15 different teams lost money in a given year (conservative estimate)

 

 

 

 

 

That tells me that we are somewhere in the other 15.  If we are middle of the pack of the remaining 15.....we are in the 22-23 range overall.    Given the fact that we made more money than all but five of the teams in 2 of the 3 years I looked......I am sticking with it. We are much closer to the conservative side of the spectrum.

 

 

 

Edit:  I found one site that lists it all off.  Going back to 2005, 17 different teams have lost money in a given year.  The formatting here is terrible so a few of the years you can't even see the operating income part.

 

Given our typical healthy 15-25M a year in profit we are also more conservative than the teams in the 1-10M range.  So I am not sure how you are concluding we are middle of the pack.

 

http://bizofbaseball.com/index.php?option=com_wrapper&view=wrapper&Itemid=126

[jay]

First of all, if by "high priced stage" you are talking elite $100+ mil free agents, that's a universe of maybe 1-3 free agents per offseason.  Very few teams could sign them by definition, just based on the extremely limited quantities.

 

I think here we are more discussing the entire universe of free agent talent, including the more middle tier Nolasco level and perhaps even the lower tier Hughes/Willingham level.  Plenty of teams are active in those markets all over the success cycle.

 

Secondly, wouldn't the better free agents by definition often come from the better teams?  The simple likelihood of them re-signing with their old teams might make them more likely to end up in the better destinations.

 

Thirdly, a full half of MLB teams this past season finished above .500, and a few more finished within 10 games of a wild card spot.  Most teams in most years qualify for having a sufficient base to augment by adding a free agent.

 

Finally, the biggest FA of last offseason (Robinson Cano) signed with a team that had just avoided a 5th consecutive last place season only because the Astros switched leagues.  Exception that proves the rule?  What about the team that finished last in the Twins own division signing a top international talent?  Heck, I believe even the moribund Astros were rumored finalists for both Abreu and Tanaka.  Going back a couple years, off the top of my head, Oakland was coming off its worst season in its worst stretch of the Beane era when they signed Cespedes.

 

I think you're extrapolating my statements a bit too far to make them sound far more extreme than they are.  That seems to be happen often in the payroll debate.

 

We're talking about the exact same talent pool, not solely 9-figure FAs.  The high-priced stage meaning >6 years of service time.  I didn't say anywhere, ever that a team can't sign a free agent.  I simply said "the successful teams build around young players before they reach that high priced stage".

 

You frequently mention the international free agent pool and I agree with you.  I'd like to see the Twins be more aggressive there.  If you don't have enough cost controlled young players to build around, the next best thing is probably expensive young players to build around.  Certainly more so than expensive old players.  However, the Abreu signing and the results of the CWS also verify that it's not enough alone (which I know you aren't saying).  A successful team is going to need production from young, cost-controlled players.  It's the only model that works.  Worrying about a payroll number doesn't.  

 

Again, I want to see the Twins be flexible in their payroll.  That's what I care about.  If there's a window of success that is open, let's swing at it and push payroll as high as it can go within the organization's ability.  If we're rebuilding, the number really doesn't matter.  Build the farm and develop talent.

[jay]

It is fair to me, looking at 10 years of data to conclude the Twins are not a team that will ever lose money in a given year.  If they didn't lose any money from 2006-2009 they certainly won't in Target field.  11 teams lost money last year and in each of the other few years I looked, 2-4 teams lost money.  So let's just assume that over the last 10 years, 15 different teams lost money in a given year (conservative estimate)

 

Remember contraction?  Remember why?  From a pure business standpoint, the Twins were consistently losing money.

 

Does any business make it a habit to lose money?  That so few teams lose money in a given year proves the answer is no.  Having a P&L in the red that one time in 10 years is a pretty poor method to determine that organization has a financial approach that significantly differs from the Twins.

 

If a long-term study with reliable data showed the Twins profit margins on their revenues are greater than most other teams, then we'd be perfectly justified to ask some tough questions about why.  

[tobi0040]

Remember contraction?  Remember why?  From a pure business standpoint, the Twins were consistently losing money.

 

Does any business make it a habit to lose money?  That so few teams lose money in a given year proves the answer is no.  Having a P&L in the red that one time in 10 years is a pretty poor method to determine that organization has a financial approach that significantly differs from the Twins.

 

If a long-term study with reliable data showed the Twins profit margins on their revenues are greater than most other teams, then we'd be perfectly justified to ask some tough questions about why.  

 

 

Contraction was twelve years ago, the economics have changed quite a bit since then.  Do you have any evidence the Twins were "consistently losing money?"

 

Forbes records show they made money from 2001 to 2004 in every year but 2004.  I could not find additional data farther back than that.  Granted, the numbers here are aided by revenue sharing.  Here is a link that shows our profit in 2001.  I think that is the key distinction. The Pohlads were not consistently losing money, they were being supported by other teams and it was the other teams by and large pushing for contraction. From the Pohlad's perspective, money from the Yankees spends (or does not spend) the same as money from a Twins fan.

 

I don't have a perfect data point, but I have offered a few.  If none of these change your mind that the Pohlads are middle of the road on the frugal scale, I don't think anything will. 

 

-Over a 9 year period from 2006 to 2014, they made $183M in profits. 

 

-In only one of those years did they make under $10M ($7M), seventeen other teams lost money in at least one year.  Many teams lost money in multiple years.

 

-In one year while in the dome, only five teams made more money

 

I believe the Pohlads forecat revenue and aim to be make about $20M each year. Priority number two is fielding the best team within those parameters.  I also think that this fan base probably has a more negative view of the Pohlads relative to the rest of MLB fans view of their owners. I think a valid reason exists for it.

 

One final note about the reliability of the data.  First, this is all we have.  Second, unless we have reason to believe the people at Forbes have a vendetta against the Twins and purposefully inflate their revenue and income numbers, or some other unforseen reason why the Twins numbers would be skewed relative to all the other teams, these numbers are all relative. When comparing the Twins to other franchises, this data is sufficient

 

http://home.cabletv.on.ca/~jpalmer/Eco182/baseball%20finances/the%20numbers,%20part%206.htm

[jay]

If none of these change your mind that the Pohlads are middle of the road on the frugal scale, I don't think anything will.

I'm confused. There's no mind to change when middle of the road is exactly what I said they are in the first place...

I don't think the Pohlads have rigged up a profiteering scam any more than most other owners have. Your data points haven't proven otherwise.

 

I believe the Pohlads forecat revenue and aim to be make about $20M each year. Priority number two is fielding the best team within those parameters. I also think that this fan base probably has a more negative view of the Pohlads relative to the rest of MLB fans view of their owners. I think a valid reason exists for it.

I think the first two sentences there could be fairly accurate. I think the last two are off base. I've lived enough places outside of the Twin Cities to know that every fan base thinks their owners should be spending their personal wealth to bankroll the team's player payroll. Even a lot of Yankees fans think they should be spending more...

[tobi0040]

I'm confused. There's no mind to change when middle of the road is exactly what I said they are in the first place...

I don't think the Pohlads have rigged up a profiteering scam any more than most other owners have. Your data points haven't proven otherwise.

 

I think the first two sentences there could be fairly accurate. I think the last two are off base. I've lived enough places outside of the Twin Cities to know that every fan base thinks their owners should be spending their personal wealth to bankroll the team's player payroll. Even a lot of Yankees fans think they should be spending more...

I'm confused. There's no mind to change when middle of the road is exactly what I said they are in the first place...

I don't think the Pohlads have rigged up a profiteering scam any more than most other owners have. Your data points haven't proven otherwise.

 

I think the first two sentences there could be fairly accurate. I think the last two are off base. I've lived enough places outside of the Twin Cities to know that every fan base thinks their owners should be spending their personal wealth to bankroll the team's player payroll. Even a lot of Yankees fans think they should be spending more...

I was saying your opinion is not going to change from your opinion that they are middle of the road. I could go tally up profits by team over the last 10 years that show the twins are in the top 10 in profits and 20 or so in team payroll but then you would question the data somehow, or say that was not the right data point. It is not my job to prove anything, especially since you aren't offering any data whatsoever backing up your claim

 

Regarding the twins fans perceptions of owners relative to other teams,we will just have to disagree.

[Otto von Ballpark]

Again, I want to see the Twins be flexible in their payroll.  That's what I care about.  If there's a window of success that is open, let's swing at it and push payroll as high as it can go within the organization's ability.

You had me right up to "window of success".  That's more applicable to 1-year deals, deadline deals, etc.  I am looking for long-term assets.  Admittedly hard to get in domestic FA, a little easier in international FA, but either way, those are the kind of moves you should ALWAYS be looking to make, especially if you have some present/future payroll wiggle room.

 

And I've been critical of TR because I think he hasn't looked at this much, defaulting to just hope and waiting for prospects.  Hughes was a great find, but was it more of a desperation measure?  Will be interesting to see what he does in the future.

[jay]

Not saying it's your job, man!

 

I agree with most of your thoughts on the Twins' approach...

- they aren't going to lose money often, if ever

- they are going to project revenues and expenses every year with a profit in mind

 

I don't think that makes the Twins any different than the vast majority of other franchises. If I had a spare hour or eight, I'd crunch all the coveted Forbes data and we could see how the franchise value, revenues and payroll compare to their profitability and how that looks for all the other teams as well. Your hand picked data points don't provide anything close to that.

[tobi0040]

Not saying it's your job, man!

I agree with most of your thoughts on the Twins' approach...

- they aren't going to lose money often, if ever

- they are going to project revenues and expenses every year with a profit in mind

I don't think that makes the Twins any different than the vast majority of other franchises. If I had a spare hour or eight, I'd crunch all the coveted Forbes data and we could see how the franchise value, revenues and payroll compare to their profitability and how that looks for all the other teams as well. Your hand picked data points don't provide anything close to that.

I don't know about hand picked. I went back 10 years. Then added back to 2000 when you brought up contraction.

 

I too agree that most owners have a profit in mind, my theory is that the twins owners shoot for more given that in 10 years they have averaged 18 million in profit while some teams lost money or were closer to zero.

[jay]

I am looking for long-term assets. Admittedly hard to get in domestic FA, a little easier in international FA, but either way, those are the kind of moves you should ALWAYS be looking to make, especially if you have some present/future payroll wiggle room.

Right, I'm mostly referring to short-term assets acquired via trade or FA once a core is either in place or, as the Royals did, projected to be in place.

 

Absolutely, long-term assets are essential. Where do those come from? The cost for those acquired via the draft and int'l amateurs is far outweighed by the value they produce. I'm sure we agree on that.

 

Through the other channels you've mentioned, you end up placing far fewer bets based solely on the costs at play and those bets frequently turn into liabilities rather than assets. Acquiring long-term assets that way is possible, but the success rates and associated costs rarely make it an appealing strategy in my eyes. Please note the words "rarely" and "appealing" there -- specifically not "never" and "potentially necessary".

[jay]

Yeah, maybe not hand picked. Point is, those data points don't allow us to compare the Twins to other teams even if we do assume the data is valid.

 

How much they profited in 10 years isn't comparing them. We need to know how much all the other teams profited in order to compare. We need to know the financial ratios of margin to book value and revenue for all teams.

 

You also highlighted that roughly half the other teams have had more variability, but that doesn't equate to more profitable than other teams over time.

 

I'm not asking you do to any of that legwork, but don't fault me for not being convinced.

 

I think it'd also be fascinating to see how the Twins' player expenses (via Forbes) and MLB payroll (via deadspin, etc) to revenue ratios come out in comparison to all the other teams. It'd be a neat way to say whether or not the Twins are spending enough.

[The Wise One]

The Twins make a profit and people are upset? Hear of Steak and Ale? No profit. Bankrupt.No more Steak and Ale.  Pohlads have a lot of money. The Twins could lose money and the Pohlads might not notice for a while. Their model is to not lose money. Get over it. The team makes money. Pohlad is not going to sell an apreciating cash cow until long range forecasting says they will not make money. Figure out when cable/satelite TV is dead because that is how long they are going to own the Twins.

[The Wise One]

Found this from 04 on MLB.com

Note they claim operating losses

 

 

In each of the last four seasons, the Twins have shown that they can compete in the Metrodome. Why do they need a new ballpark to be competitive?

Over the past three seasons (2002-2004), even though the Twins won the American League Central Division, they sustained significant cash losses each year due to the limited revenue opportunities in the Metrodome. As a result of these budgetary constraints, the Twins have been unable to retain some of the long-time players that led them to the division title.

With the increasing salaries of their successful, homegrown players, the Twins have been forced to make some difficult player moves in order to pay for these payroll increases, as well as to sign free agents to fill their roster and competitive needs. As a result, players such as Eric Milton and A.J. Pierzynski were traded while LaTroy Hawkins, Corey Koskie and Cristian Guzman signed free-agent contracts with other clubs.

As a middle- to low-revenue team, the Twins will always be forced to make some unpopular player moves while operating within their budgetary constraints, even when playing in a new ballpark. However, with the incremental revenues generated by a new ballpark, the Twins should have more operating flexibility to keep their core roster in tact.

What has Mr. Pohlad done to help stabilize the baseball franchise in Minnesota?

Mr. Pohlad has incurred significant and recurring operating losses to provide Minnesotans with a competitive baseball team. This commitment has resulted in World Series Championships in 1987 and 1991, Divisional Championships in 2002, 2003, and 2004. In the past 16 years, only the New York Yankees have achieved a higher success rate in the American League. This is particularly impressive given the limited resources available to the Twins in the Metrodome.

Additionally, Mr. Pohlad has fought during the past decade as an advocate for increased Revenue Sharing for the lower revenue clubs, improved competitive balance, and the need to implement industry-wide financial stability tests.

http://minnesota.twins.mlb.com/min/ballpark/new_banter.jsp?content=qa

[The Wise One]

• Question for the techno whizes. If those Roku boxes become more widespread could there be PPV baseball and how much would the price gougers, err owners of baseball teams want per view.

 

[nicksaviking]

 

• Question for the techno whizes. If those Roku boxes become more widespread could there be PPV baseball and how much would the price gougers, err owners of baseball teams want per view.
•  

 

 

I have those concerns also.  I've never known a business owner to voluntarily embace a technology that makes them less money.  General econimics would imply that something that makes the owners more money will dictate said money comes from the consumer,  particularly if the new technology is going to negatively affect advertisers.

[tobi0040]

Found this from 04 on MLB.com

Note they claim operating losses

 

 

In each of the last four seasons, the Twins have shown that they can compete in the Metrodome. Why do they need a new ballpark to be competitive?

Over the past three seasons (2002-2004), even though the Twins won the American League Central Division, they sustained significant cash losses each year due to the limited revenue opportunities in the Metrodome. As a result of these budgetary constraints, the Twins have been unable to retain some of the long-time players that led them to the division title.

 

With the increasing salaries of their successful, homegrown players, the Twins have been forced to make some difficult player moves in order to pay for these payroll increases, as well as to sign free agents to fill their roster and competitive needs. As a result, players such as Eric Milton and A.J. Pierzynski were traded while LaTroy Hawkins, Corey Koskie and Cristian Guzman signed free-agent contracts with other clubs.

 

As a middle- to low-revenue team, the Twins will always be forced to make some unpopular player moves while operating within their budgetary constraints, even when playing in a new ballpark. However, with the incremental revenues generated by a new ballpark, the Twins should have more operating flexibility to keep their core roster in tact.

 

What has Mr. Pohlad done to help stabilize the baseball franchise in Minnesota?

Mr. Pohlad has incurred significant and recurring operating losses to provide Minnesotans with a competitive baseball team. This commitment has resulted in World Series Championships in 1987 and 1991, Divisional Championships in 2002, 2003, and 2004. In the past 16 years, only the New York Yankees have achieved a higher success rate in the American League. This is particularly impressive given the limited resources available to the Twins in the Metrodome.

 

Additionally, Mr. Pohlad has fought during the past decade as an advocate for increased Revenue Sharing for the lower revenue clubs, improved competitive balance, and the need to implement industry-wide financial stability tests.

http://minnesota.twins.mlb.com/min/ballpark/new_banter.jsp?content=qa

 

Please forgive me for not believing the Twins for claimng losses each year.  From 2000 to 2004, Forbest had them losing money in only one year (2004).  If we are calling "operating losses" excluding revnue sharing, then yes they lost money every year.  But if you have a rich uncle writing a check making you positive, you aren't "losing" anything.

[drjim]

I don't believe any team actually "loses" money any year. People can make paper accounting look how ever it wants, especially for an enterprise as complicated as a baseball franchise. That, among other reasons, is why the weeping and gnashing of teeth over the 52% number is so nonsensical.

[jay]

I have a hard time buying into points of view that rely on believing most statements made by the Twins, but then choosing which ones you don't want to believe because they don't fit the point of view.

 

Do we know Forbes doesn't include revenue sharing in their figures?  I think they actually do.  I get they are probably the best numbers out there and more publicly-available information would be great.  But, should we really put so much weight on them and frequently cite them as the truth if we don't even know for sure how they're calculated?  ...let alone the Twins' financial accounting methods?

[jay]

Bloomberg does a revenue estimate and franchise valuation just like Forbes.  I think we're better off using their estimates more like how WAR should be used (precise enough to get an idea and range), rather than an absolute gospel. 

 

Both publications place the Twins' franchise value at 19th.  Both valuation methods are based on the revenues they generate, so you can equate that to mean the Twins' are roughly 19th at generating revenue.  The industry model which the Twins have cited puts payroll expenses at 50-52% of revenue.  That's going to mean the Twins have an average payroll somewhere in the range around 19th.

 

If we didn't have Target Field, that revenue generation would be even lower.  Franchise value would be lower.  Average payrolls would be lower.

[Mike Sixel]

And when they are way under, all we want, is to see them go way over later. Way over. All in.

 

I'd prefer they not be way under year after year.....but if they are, I want them to go all in every once in awhile. Andy McPhail did that. TR did not.