BPro: Twins Are Not A "Small Market" Team

[Brandon Warne]

Doesn't matter too much, but it's BPro and not FG. 

[Vanimal46]

 

I don't think that's true at all. Every professional sports team in every sport has seen their franchise value skyrocket over the past few decades. Many of those teams lost money over short periods of time. Some have even lost money over long periods of time.

 

We live in a world where American soccer franchises are valued at $150m+.

 

Owning a sports franchise has been very lucrative for many years.

Completely agree. Point #1, the Golden State Warriors were purchased for $450 million in 2010, only 6 years ago. Forbes value today? 1.9 BILLION. Just by pure supply and demand, your initial investment in any of the 4 major sports teams is going to increase x-fold whenever you'd want to sell the team. 

[drjim]

 

I'd like to see any owner in baseball or sports that opens up about their ability to spend money for players. These authors are around the team, and reads between the lines, because they're not going to get the truth from TR or others when it comes to anything financially. 

I agree with your premise that they are hesitant to add big money on a long term contract. That is pretty obvious. I'd like to know who is leading that train of thought... Is it TR's conservative approach? A message from the owners that TR has to oblige by? It's someone in the organization that has that mind set, and it's not feasible to recruit high end talent to sign with this club. 

 

Actually only one of those three authors was around the team consistently, and he was the one who was most explicitly wrong with his assumption.

 

I think it is more Terry Ryan and his philosophy. He has a payroll range and depends on how to spend it.

[Brock Beauchamp]

 

Yeah, the Pohlads are raking in the cash every year. Which is fine, but don't strong arm the city/state to make them pay for your stadium when that money could be used in much better areas: schools, substance abuse help, welfare, etc

I don't have a big problem with the government assisting in stadium building if - and this is a HUGE "IF" - it makes financial sense for the government to do so.

 

Target Field has done wonders for the North Loop. Would that development have happened anyway? Yeah, probably... But it's unlikely it would have happened quite as fast and furious as it did with TF being the centerpiece of the north side of downtown. Similar things happened in San Diego surrounding PETCO Park. More housing, more wealthy residents, more taxes.

 

Baseball brings people to a metro area 81+ times a year. Those people are flush with cash. That's a good thing for a metro area and the sheer number of people a stadium brings might convince a city to chip in for a stadium because it's a win-win-win situation for everyone involved (the team, the city, the fans).

 

But don't even get me ****ing started on the Vikings stadium. Eight games. Eight ****ing games. Oh, and the stadium costs over double the price to build.

[drjim]

 

Like Torii Hunter or Johan Santana? 

 

Really, Mauer is it, right? In their whole history, who have they signed to a 5-7 year deal for elite money?

 

Oh, guys that walked/were traded before Target Field?

 

I'm more thinking that everyone that had even a reasonable case to be extended (Hughes, Perkins) were given that extension. Morneau signed a 6 year deal for market rate.

 

Aside from that, Mauer is only guy that was elite recently.

[jay]

 

I would put them slightly below median (15-20 range), and payroll generally reflects that.

 

This would seem to reflect how the Twins view themselves.  DSP has used that exact range if I recall correctly.

[jay]

 

*it's not really a mystery...the Pohlads borrowed** the money for their portion of the costs of Target Field, and are using TF revenues to pay off that note.  So they haven't actually put a penny of their own money into building TF, even though they "pledged" $150M or whatever it was.  That's why payroll isn't $150M, which their income stream would seem to support.

 

I think this is extremely valid.  Some harp on public funding for the stadium, but imagine if the team had fully funded TF and where payroll would be as a result....  $80M? 

[Vanimal46]

 

Actually only one of those three authors was around the team consistently, and he was the one who was most explicitly wrong with his assumption.

 

I think it is more Terry Ryan and his philosophy. He has a payroll range and depends on how to spend it.

Too bad Phil Miller couldn't see into the future that Torii Hunter, Tim Stauffer, and Jordan Schafer were coming to the rescue on 1 year deals! Then my argument would have merit. 

[USAFChief]

 

I think this is extremely valid.  Some harp on public funding for the stadium, but imagine if the team had fully funded TF and where payroll would be as a result....  $80M? 

Imagine if the team actually lived up to their promise to contribute to construction costs and where payroll would be as a result... $150M?

[Winston Smith]

 

 

 

"Baseball brings people to a metro area 81+ times a year. Those people are flush with cash. That's a good thing for a metro area and the sheer number of people a stadium brings might convince a city to chip in for a stadium because it's a win-win-win situation for everyone involved (the team, the city, the fans).

 

But don't even get me ****ing started on the Vikings stadium. Eight games. Eight ****ing games. Oh, and the stadium costs over double the price to build."

 

Not defending the taxpayer money spent but I think the Dome was used  around 300 days a year for various events. Not sure how the new stadium will match up but it will be used a lot more than 8 days.

 

[drjim]

 

Too bad Phil Miller couldn't see into the future that Torii Hunter, Tim Stauffer, and Jordan Schafer were coming to the rescue on 1 year deals! Then my argument would have merit. 

 

But that also proves the point that if the contract makes sense, like Hunter for one hear, they'll do it and aren't as constrained on payroll as they were before and even have some space right now.

[jay]

 

Imagine if the team actually lived up to their promise to contribute to construction costs and where payroll would be as a result... $150M?

 

Not saying it was the right thing to do, but I don't recall any promise on how that contribution would be funded. Unfortunately, I'd guess using future revenues is a standard tactic across pro sports as it is across many other industries.

[Mike Sixel]

 

But that also proves the point that if the contract makes sense, like Hunter for one hear, they'll do it and aren't as constrained on payroll as they were before and even have some space right now.

 

so there just wasn't one good player available this year that could help them?

[Mike Sixel]

 

Oh, guys that walked/were traded before Target Field?

 

I'm more thinking that everyone that had even a reasonable case to be extended (Hughes, Perkins) were given that extension. Morneau signed a 6 year deal for market rate.

 

Aside from that, Mauer is only guy that was elite recently.

 

It's an easy philosophy to want to follow, if you never have to do it......

[drjim]

 

so there just wasn't one good player available this year that could help them?

 

Who said or implied that?

[drjim]

 

It's an easy philosophy to want to follow, if you never have to do it......

 

What are you talking about?

[Nick Nelson]

 

Doesn't matter too much, but it's BPro and not FG. 

Whoops. Good call. I lose track of all the places Jack has written!

[Nick Nelson]

 

They have only gone "big" once on one of their own guys (Mauer) every other top guy they developed they have let walk away: Santana, Morneau, Hunter, etc

In fairness, Santana and Hunter were pre-Target Field. And Morneau was not let go for monetary reasons. 

 

I suspect we'll see unprecedented spending from this franchise once Buxton, Sano and Berrios are approaching FA.

[Mike Sixel]

 

What are you talking about?

 

If you never "have anyone worth signing", it is pretty easy to have a philosophy that you only sign your own guys. It helps the budget a lot.

[drjim]

 

If you never "have anyone worth signing", it is pretty easy to have a philosophy that you only sign your own guys. It helps the budget a lot.

 

Such is life when you lose 90+ 4 years in a row - probably not a lot of elite talent worth extending.

 

And even with that they signed 2 guys to pretty significant extensions (and arguably shouldn't have done either).

[Mike Sixel]

I would have preferred more concentrated spending on an elite pitcher, than on 3-4 mediocre pitchers (like last year).......but it is true, they have spent more money. 

[Dr. Evil]

 

Yep, though it's fair to point out that value is only seen if the team is sold. If the Pohlads hang on to the Twins forever, their "profit" is zero (assuming they spend every dollar they acquire in revenue).

I fail to see how having a 40 million dollar asset in ones portfolio is the same as having an 895 million dollar asset. Also, how do people look at growth within one's portfolio of 855 million during the time of ownership as not being a part of profit? 

[Vanimal46]

More money*......

*Until they hit the $113 million cap that TR or the Pohlad's sanctioned for the team. 

[tobi0040]

 

I think this is extremely valid.  Some harp on public funding for the stadium, but imagine if the team had fully funded TF and where payroll would be as a result....  $80M? 

 

That is a personal choice though.  The value of the team pre-TF was $288M in 2008.  It is now almost $900M.  The team value has gone up nearly $100M every season.  So this logic doesn't pass the sniff test to me.

 

They can run their business however they please.  And they used a form of government welfare to boost the value of their business.  They weren't the first and won't be the last.  But I just don't buy this payroll + operating expenses has to match revenue, we can't lose a dime nonsense

 

 

http://www.forbes.com/lists/2007/33/07mlb_Minnesota-Twins_330400.html

[Brock Beauchamp]

 

I fail to see how having a 40 million dollar asset in ones portfolio is the same as having an 895 million dollar asset. Also, how do people look at growth within one's portfolio of 855 million during the time of ownership as not being a part of profit? 

Sure, their portfolio is stronger and that has its benefits but the team's increase in valuation is like my personal stock growth in Netflix: it's just a number until I cash out of the stock.

[Seth Stohs]

I posted this relating to Brandon posting this article on Facebook earlier today:

 

 

Interesting, to be sure... but since getting Target Field, no one with the Twins has claimed to be "Small Market." They say mid-market. Which is true. Also, the market size is nice, but the local TV revenues for the Twins are still way lower than most teams. In 2015, the Twins were 22nd in Revenue, 18th in Payroll, and they were 12th or 13th in Payroll/Revenue (48.85%). In other words, they are now spending appropriately.

 

The low cable subscriber thing is big. From that data, I'd say the Twins are spending quite appropriately, or at least they did in 2015. 

 

48% if about average, and about what teams are encouraged to be at... They're 22nd in revenue... not like top 15. 

[Otto von Ballpark]

 

In fairness, Santana and Hunter were pre-Target Field. And Morneau was not let go for monetary reasons. 

 

I suspect we'll see unprecedented spending from this franchise once Buxton, Sano and Berrios are approaching FA.

Also in fairness, they were only 2 years away from opening Target Field at the time.  And that Target Field's new revenue streams were guaranteed all the way back in 2005, and the Twins didn't even make a significant commitment to Mauer (aka the most obvious lifetime Twin ever) until almost 5 years later.

 

You might be right on your latter point, although I'd prefer to see some aggressiveness before those guys near FA (i.e. Sano right now).  I'm not really all that concerned with their spending levels anymore, more their aggressiveness and choice of targets (for example, it ain't money that's keeping them from signing another relief pitcher).

[Seth Stohs]

 

In fairness, Santana and Hunter were pre-Target Field. And Morneau was not let go for monetary reasons. 

 

I suspect we'll see unprecedented spending from this franchise once Buxton, Sano and Berrios are approaching FA.

 

Correct... Even at Metrodome, the Twins signed long-term deals to keep the following players here beyond their free agent season: Radke, Mauer, Santana, Hunter, Morneau, Cuddyer, Nathan. Those are some pretty good "core" players. 

 

Sure, Mauer is the only one they've kept beyond that, but they didn't get any hometown discount, but he also would have been a free agent at about 28, not 30-31. 

 

It'll definitely be interesting to see how things play out with Sano and Buxton and hopefully Berrios... Hopefully they'll be able to work out a TV deal that will put them around where the Astros are at $80-85 million, rather than their current $25-30 million. Adding another $50 million in local TV revenue means another $25 million in payroll at 50%... that's pretty meaningful.

[tobi0040]

 

Sure, their portfolio is stronger and that has its benefits but the team's increase in valuation is like my personal stock growth in Netflix: it's just a number until I cash out of the stock.

 

That is a pretty bad example in my opinion.  Very few individual stocks tend to rise every single year like a sports team.  Netflix is much more likely to go down this year than the Twins

 

In fact, the value was up 15% from 2007 to 2009.  Recession proof.

[jimmer]

I'll believe the notion we will see unprecedented spending from the Twins when I see it. Question is, who will be GM when those three are hopefully deserving of such spending?