Three Truths and a Question about Twins Payroll

[John Bonnes]

FORT MYERS - A quick examination of the Twins payroll shows that it has not exceeded expectation, and gives some guidance to what we can expect in the future. It also raises an important question for the 2020 season.

 

Truth 1: It looks like the Twins Opening Day payroll will be about $138MA back-of-the-napkin tally of the Twins likely roster ends up exactly the range we predicted when the offseason began. You can see the details below. Four months ago we pointed out they had as much as $70M to spend on three starting pitchers, though we didn’t expect a large chunk of that to be spent on a 34-year-old MVP-caliber third basemen. But the total matched expectation.

 

Ultimately, they Twins spent about $39M of this year’s money on free agent or new starting pitchers:

• $17.8M on a qualifying offer to retain Jake Odorizzi for one year.
• $20M for a two-year contract to Michael Pineda (but it appears they only have to pay $7.5M or that this year due to his suspension).
• $7M to Homer Bailey on a one-year contract.
• $3-6M plus possibly more on Rich Hill depending on how much he pitches after returning from injury.
• $1M or so on Kenta Maeda, thanks to the Dodgers picking up all or almost all of his 2020 salary.

Truth 2: That’s a starting point, but there are variables that could make swing higher or lower throughout the season.

 

This is always true, and payroll can be also impacted by acquiring or dumping big salaries at the trade deadline. But the Twins have at least two contracts on the books that could change the total as much as $19M in a year, though one of those swings no longer really matters.

 

Rich Hill has only $3M guaranteed, but can earn as much as $9M more depending on how many games he starts once he returns from elbow surgery midyear. For the purposes of the back-of-the-napkin number above, we estimated about $6M this year, which would require him to make nine starts.

 

Kenta Maeda also has only $3M guaranteed. But he could make another $10M from starting games, though a more realistic ceiling is probably $8M. However, in the revised trade, the Dodgers agreed to pay his base $3M salary and up to $7M of the incentives. For the back-of-the-napkin payroll, we estimated he’ll cost the Twins about $1M this year.

 

Question 1: So can the Twins spend any more?

 

 

The Twins literally had a payroll $12M higher a week ago. When the Maeda/Graterol trade was first announced, the Dodgers weren’t providing any of Maeda’s salary, meaning the Twins payroll was on track for about $150M if he started throughout the season. Unless they had some way to dump $10M quickly, that suggests that Derek Falvey and Thad Levine either had budget or approval to go that high.

 

This front office also has shown a willingness to add players during spring training if they see the right fit, or if injuries pop up during camp. Over the last two years they’ve added a starting pitcher (Lance Lynn), a designated hitter (Logan Morrison) and a super utility player (Marwin Gonzalez). That’s almost $30M of additional payroll added when we thought the team was likely done.

 

That extra payroll room could come in handy at the trade deadline, too. Being able to add $10M of salary for the last two months means adding $30M worth annual salaries at the deadline. Of course, that often means acquiring payroll for 2021, and that could be a problem.

 

Truth 3: Things get trickier in 2021.

 

It’s hard to see eight months in the future, but the Twins will likely face challenges accumulating this much talent on the roster for the 2021 unless they up their payroll considerably or have some prospects step into some big shoes. A peek ahead at next year’s payroll estimates they will enter the offseason with a payroll of about $103M, while needing to replace a number of important players who will be free agents.

 

Nelson Cruz, Jake Odorizzi, Homer Bailey, Rich Hill, Marwin Gonzalez and Trevor May will all be free agents, as well as several other Twins. That would leave them looking to add two starting pitchers, a designated hitter, and possibly some bench and bullpen help. Even with a modest increase in payroll to the mid-140s, that’s a little tight. Acquiring a high-priced impact player at the trade deadline would create further challenges.

 

Twins payroll has been a limitation throughout the club’s existence. The Pohlad ownership is the focus of most of the current criticism, but people forget they were viewed as saviors for spending money when they took over ownership from Calvin Griffith. That reality isn’t unique to the Twins; the Red Sox and Cubs are coming under fire this year for limiting their payroll this offseason. Keeping track of where it sits and where it is going provides clues toward the future of the team.

 

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Download attachment: Payroll_2020.png

 

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[Richard Swerdlick]

Somehow I think with all the revenue streams the Twins have that Jim Pohlad will find a way to feed his family in 2020 and in the future.

[old nurse]

Truth is that baseball is a business. It is not a non profit business. Franchises wouldn't have the same valuations if they did not make money.

 

Baseball has revenue sharing. Baseball loses over a million fans, the Twins lose some revenue. Twins increase the number of fans, about half goes into the revenue sharing kitty. It is not as big of gain as you would think increasing attendance. Using Forbes estimates on revenue per fan it would take shy of 40,000 new fans to generate a million dollars of money for the Twins bottom line. Now a million dollars is a lot of money to the average fan, except for the California Mortgage Broker, but in baseball salary that does not buy much of a free agent. The 2019 increase  was about 345 thousand. It still left them plenty of room for more fans as they are a million fans short of a sell out.

[by jiminy]

Cruz, Gonzales, Bailey, Hill, and Romo are not painful losses, and that's 39 million right there. Cruz is good but one of Rooker, Larnach, or Kirilloff should be ready to step in. Gonzalez is replaceable with Cave, Astudillo, or Adrianza, and his value was inflated by stealing signs anyway. The three pitchers are not anchors either. So that's below 100 even without losing Odo or May. And there is a good chance someone in house will be the equal or better of Odo by then, potentially freeing another 17 million, bringing the departed salary up to 56 million, none of it core players except maybe Odorizzi. Replace Rosario with a young slugger and there is another 8 million, making 64 million available to restock. And that is just to get back to spending barely half of revenue.

 

 

Sure several guys will need raises, but I don't see a big crunch. I think they are set up really well for years to come.

 

 

There is room in the budget to add an ace, especially if they are in win-now mode and decide to make up for all the years they spent under 50% because their window hasn't opened yet. The converse of that logic is you spend more when you finally become a legit contender.

 

 

I'm optimistic they will strike if they see an opportunity. It's been a long, long wait, and if they don't want to lose the fans that stuck with them through the hard times it would behoove them to spend a little of that stadium money on rewarding their old fans and recruiting new ones. Nothing attracts fans like winning, so even on purely financial grounds it would be money well spent.

[Cody Pirkl]

It's actually incredible how the front office appears to have improved the team while only sitting at $138m. I'm not super concerned with the free agents next offseason.

 

If Cruz is still slugging, I'd expect the front office to do everything they can to retain him.

 

The rest of the guys I see as replaceable either internally or on the free agent market with all that financial flexibility we'll have back. Losing Odorizzi in particular is a lot less scary now that Berrios, Pineda and Maeda are slotted in.

[sweetmusicviola16]

Lets not forget on this date in baseball history, February 17 2018 the Twins traded for Jake Odorizzi and his 6.3mil salary for 2018.

 

I don't expect a repeat this ST again, unless an injury were to occur.

[dbminn]

I'm confident that prospects/young players will fill at least half of the 2021 openings, maybe more. There are multiple options at each vacancy and all of the players listed have at least touched AA. 

 

C: Jeffers or Astudillo

DH/1B/OF: Kirilloff, Larnach or Rooker

2B/SS: Gordon or Lewis

3B/LF: Blankenhorn or Astudillo

SP: Thorpe, Dobnak, Duran (maybe Sands, Colina or Balazovic)

RP: A bunch

 

Twins might need a middle infielder and or catcher if the prospects aren't ready. The FO will always look for a veteran RP. After that, the Twins should have enough budget to add a good SP. 

 

Health is the wild card.

[etwink]

 

I'm confident that prospects/young players will fill at least half of the 2021 openings, maybe more. There are multiple options at each vacancy and all of the players listed have at least touched AA. 

Totally agree.  As we have been told so much about our stocked farm, 2021 is where those prospects have to start making an impact.  Pulling in $40M of free agents is great, at some point you’re at risk of keeping guys in the minors too long.

[Richie the Rally Goat]

Cruz, Gonzales, Bailey, Hill, and Romo are not painful losses, and that's 39 million right there. Cruz is good but one of Rooker, Larnach, or Kirilloff should be ready to step in. Gonzalez is replaceable with Cave, Astudillo, or Adrianza, and his value was inflated by stealing signs anyway. The three pitchers are not anchors either. So that's below 100 even without losing Odo or May. And there is a good chance someone in house will be the equal or better of Odo by then, potentially freeing another 17 million, bringing the departed salary up to 56 million, none of it core players except maybe Odorizzi. Replace Rosario with a young slugger and there is another 8 million, making 64 million available to restock. And that is just to get back to spending barely half of revenue..

RE: Cruz. It’s pretty optimistic that one of the Rookies could step in and backfill Cruz. Letting his production go will leave a big gap. It’s a deep lineup and a DH can be had cheaply, but not at the value they got from Cruz.

 

RE: Marwin... Adrianza is already on the roster, and is a free agent too. He’s not replacing Marwin. If you can resign Ehire, losing Marwin isn’t huge, but you gotta resign one of them. My vote is Ehire.

 

That knocks down your total maybe, 12-15 mil, I guess.

[HrbieFan]

Will be interesting to see what they do if Cruz has another year like last year. At some point father time will kick in, but I would keep riding that horse as long as we can

[Mike Sixel]

The interesting thing about this to me is that is SEEMS LIKE THEY REALLY SPENT A LOT, but it turns out they didn't really increase payroll that much. Also, they are 17th in opening day payroll right now, so they didn't exactly bump it way up near the top 10-12 at all. That's an observation, btw, not a judgement.

 

Next year? Lots of money coming off again next year.

[nicksaviking]

I am anything but a Pohlad defender, but if the Twins continue winning, I think they'll let payroll go a bit higher than we suspect. We've seen Detroit, Cleveland and KC go above their comfort zone in payroll for extended periods of time when they were contending and I don't think the Twins are currently above their comfort zone. Since TF opened, the Twins have typically spent more when they were bottoming out than KC and Cleveland did when they bottomed out. Overall the Twins seem to be higher than those two when it comes to the overall payroll hierarchy, so I really don't think 140M is going to be the ceiling. And again, I would never try to paint the Pohald's in a rosy light.

 

But regardless, these guys seem to be pretty crafty with the payroll. With LA paying 2.5M of Maeda's contract the next four years, the Twins are guaranteeing less money to Maeda and Pineda combined in 2020 than the Mets are to Rick Porcello. 

[Richie the Rally Goat]

The interesting thing about this to me is that is SEEMS LIKE THEY REALLY SPENT A LOT, but it turns out they didn't really increase payroll that much. Also, they are 17th in opening day payroll right now, so they didn't exactly bump it way up near the top 10-12 at all. That's an observation, btw, not a judgement.

 

Next year? Lots of money coming off again next year.

considering 30-40% of what’s coming off the books is Odorizzi, it’s not that much....