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  • $200 Million is the New $100 Million


    Jon Marthaler

    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 revenue from MLB Advanced Media, the online streaming arm of MLB.

    This continues a trend.

    Twins Video

    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. Sixteen 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 last year's $85 million. Don't let the Twins fool you; they will try to tell you that they've spent plenty of money. They haven'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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    You just set a Twins Daily double negative record and I think you lost your own point in it. You can do nothing and hope to get better but it's far less likely than actually trying to add assets to get better.

    My point about the Twins adding payroll was meant for those complaining that they hadn't added payroll had gotten what they wanted. That is all.

     

    The Twins could have,in theory,traded for a pitcher that makes league minimum and improved the team and winning more games without increasing they payroll.

     

    What if,the 2015 Twins lose 90 games again? Does that mean they didn't add enough payroll, or that does that mean it payroll isn't as highly correlated to wins as you are claiming?

     

    As a Twins fan, I don't care what the payroll is, I just want the team to win. I agree with you that it is all about adding assets (talent), but assets are added in many ways in baseball. Not just spending money on free agents.

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    As a Twins fan, I don't care what the payroll is, I just want the team to win. I agree with you that it is all about adding assets (talent), but assets are added in many ways in baseball. Not just spending money on free agents.

     

    I agree, but I would suggest teams that add assets through all means have that reflect in their payroll eventually.  Usually sooner rather than later. 

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    Okay, I think would ticks some people off is that when the Twins look at that big pile of money on the desk they think debt reduction, payoff the mortgage rather than invest in putting a team on the field. The fans coming to see baseball outdoors ran its course, now you need product.

     

    And maybe you have to bite into your profit percentage to play the game.

     

    If you lose by investing badly (or your division has done better than you), then you cry when people don't come and see games, but you do make moves so you can keep your ticket prices stable.But if you win, then you can raise ticket prices and spend more money, because you do have more coming in.

     

    At some point the Twins investment in Target Field will be paid off and all they will have is operating costs and some sort of split on improvements. The Taxpayer gets their note paid off in 30 years or so. Maybe f we paid off our note faster, than sales tax could go down in the metro area.

     

    Kudos to the Twins for opening the purse this season. Hopefully they won't eat $20 million in disabled list stuff like they did the majority of last year (counting lackluster play from Mauer and Noalsco rally being injured et al). I'm sure they were looking at the sales department and the trouble they were having getting advance ticket sales going and knew they had to do something. Lose $20 million in overall sales in 2015 or spend $20 million and charge up the base a bit.

     

    Yes, you can spend a lot of money and still get beat. It's a funny game. But don't even hint that you are paying off your own note, or spending it on stuff people don't associate with on-the-field stuff.

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    The one argument that is not valid at all is people complaining that "The Pohlads are operating the Twins as a business."  I really hate to break this to those people, but the Twins are, in fact, a business.  In fact, all 30 MLB teams are, in fact, businesses.  If you expect the owners to run their teams as anything other than a business, then your setting yourself up to be disappointed. 

     

    You have greatly oversimplified the business.  Yearly revenue and payroll is a small part of the Twins baseball business equation.  The Pohlad's are making out huge simply by owning the Twins.  Baseball franchises are skyrocketing in value.  Off the field revenue is skyrocketing.  Payrolls all over the MLB are skyrocketing.  I completely understand why payroll dropped the last couple of seasons but there is a lot of money that could be spent on payroll and not damage the bottom line of the business.

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