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View Full Version : What Are The Twins Worth In Light Of Padres Sale?



John Bonnes
08-18-2012, 10:18 AM
MLB just approved a sale of the San Diego Padres for $800M. The Padres were valued by Forbes this year at $458M, good for 20th in MLB.

#14 was your Minnesota Twins at a valuation of $510M. (Here are all the valuations by Forbes. (http://www.forbes.com/mlb-valuations/list/))

Are the Twins really worth close to $900M? Just a couple of data points to keep in mind...
1. Pohlad bought the team in 1984 for $40M
2. In 2001, during the whole contraction mess, he was reportedly going to sell them for $150M.

Seth Stohs
08-18-2012, 10:24 AM
My Minnesota Math tells me that $890,829,694 would be about right... not bad.

kab21
08-18-2012, 10:31 AM
The Astros sold for 680M (including a 65M league change bonus) last winter and they only had a valuation of 549M so the MN math might not be perfect.

crarko
08-18-2012, 10:50 AM
Are you planning on making an offer? ;)

Ultima Ratio
08-18-2012, 11:54 AM
Can someone explain why the sale price is so much higher/different than the appraisal (Forbes value)? Seller's market? What am I missing?

Thrylos
08-18-2012, 12:07 PM
I think that the Forbes' appraisals could be wrong in some cases :)

The Twins really jumped up in value with Target Field. I wonder what a shrewd investment in commercial real estate or even Apple stock of $40M in 1984 would worth today? ;)

(Actually $40 million of Apple stock in 1984 at $3.30 per share worth about $7.8 billion today at $650 per share.)

drivlikejehu
08-18-2012, 12:24 PM
There are differences between the franchise sales that make them difficult to compare directly. For instance, media deals, surrounding properties, the particulars of how the ballpark was financed, etc. The Twins are worth quite a bit, that much is certain. The taxpayers of Minnesota say, "you're welcome." Oh and, thanks for cutting payroll- nothing shows appreciation more.

TwinsArmChairGM_Jon
08-18-2012, 01:37 PM
The relatively low valuation of the Twins TV deal certainly holds down the Twins value when comparing them to other markets. The Padres signed a new TV deal that brings in $60M/year compared to the Twins $29M. Target Field helps, but TV money is a bigger factor in valuations these days, I believe.

http://mlb.mlb.com/news/article.jsp?ymd=20120815&content_id=36758474&vkey=news_mlb&c_id=mlb

jokin
08-18-2012, 02:54 PM
The relatively low valuation of the Twins TV deal certainly holds down the Twins value when comparing them to other markets. The Padres signed a new TV deal that brings in $60M/year compared to the Twins $29M. Target Field helps, but TV money is a bigger factor in valuations these days, I believe.

http://mlb.mlb.com/news/article.jsp?ymd=20120815&content_id=36758474&vkey=news_mlb&c_id=mlb

That's what's so troubling about the Padres valuation. The media markets are virtually identical in population of their metro area (Twin Cities rank 16/ San Diego 17), but the Twins obviously have a much larger geographical area beyond their metro nexus that naturally follows the team versus the Padres, who are a distant 5th most followed team- in their own state. I would think the TV ratings would be at least as strong, if not much stronger, than the moribund Padres franchise (with ticket sales and attendance stronger, as well). Do the Padres make quite a bit on Spanish programming to Tijuana? Or is that Dodger/Angel territory?

70charger
08-18-2012, 03:05 PM
Maybe somebody who knows for sure can fill me in, but here's a possibility. The Twins signed their TV deal several years back, whereas the Padres just signed theirs recently.

Media people have been coming around to the idea that the only thing in television that's safe from the proliferation of the DVR, Netflix, Hulu, etc. paradigm is live sports. Thus, the only way to ensure that people see your commercial is to place it in a sports game. Given that, TV deals for all sports have absolutely skyrocketed over the last few years. These days, it's become the sine qua non of professional sports.

It could be that the Twins just have an outdated deal.

kydoty
08-18-2012, 03:10 PM
Can someone explain why the sale price is so much higher/different than the appraisal (Forbes value)? Seller's market? What am I missing?

Highest bidder

jokin
08-18-2012, 03:18 PM
Maybe somebody who knows for sure can fill me in, but here's a possibility. The Twins signed their TV deal several years back, whereas the Padres just signed theirs recently.

Media people have been coming around to the idea that the only thing in television that's safe from the proliferation of the DVR, Netflix, Hulu, etc. paradigm is live sports. Thus, the only way to ensure that people see your commercial is to place it in a sports game. Given that, TV deals for all sports have absolutely skyrocketed over the last few years. These days, it's become the sine qua non of professional sports.

It could be that the Twins just have an outdated deal.

Given the outdated philosophies about how to compete on the field, I guess the TV deal "shoe" fits just as well on this franchise. I've said it before, this ownership is sitting on a sleeping giant of revenue that they are unable/unwilling/incapable of realizing......if only they would just sell out to real baseball/marketing people like the O'Malleys.

jokin
08-18-2012, 03:20 PM
Can someone explain why the sale price is so much higher/different than the appraisal (Forbes value)? Seller's market? What am I missing?

Highest bidder

I think the Dodgers deal set and raised the bar significantly higher for everyone else.

JB_Iowa
08-18-2012, 03:33 PM
Maybe somebody who knows for sure can fill me in, but here's a possibility. The Twins signed their TV deal several years back, whereas the Padres just signed theirs recently.

Does anyone know for sure on the date? I was thinking that the TV deal was only extended sometime in 2011. I remember thinking that there'd be a nice influx of dollars annually and was disappointed to find out that it had already been renegotiated.

B Richard
08-18-2012, 04:46 PM
Forbes estimates are often nowhere close to what the actual franchise is worth, namely because they don't have access to the kind of inside information needed to make an accurate valuation. To those on the inside, Forbes' numbers are just a big joke. No one takes them seriously. Valuations go far, far deeper than just fanbase size or geographic reach and often include the marketability of surrounding properties as well as the timing of the TV contract/lease agreement with for the stadium, if there is one. The Dodgers sold for $2B for these reasons, along with others.

Sports franchises, unlike many other commodities, almost always inrease in value over time. This, along with their limited availability and allure, leads many prospective buyers to "overpay" for a franchise. It's all a crapshoot, but I'd speculate the Twins are worth a fair amount more than the Padres because of the quality of the Twins' market. I do believe the Padres aren't far off from the lowely Rays in terms of lacking fan avidity and brand loyalty. The Twins got hosed a little a bit in their last TV negotiation, but whenever that contract ends I'd expect the Twins to command more unless we are absolutely not competitive.

Bark's Lounge
08-18-2012, 04:47 PM
If the Padres organization owns their stadium and the land it rests upon, that has to be a significant factor in the price. Urban California v. Urban Minnesota property value is no contest. I figure the Twins price value is a little less.

jokin
08-18-2012, 04:59 PM
If the Padres organization owns their stadium and the land it rests upon, that has to be a significant factor in the price. Urban California v. Urban Minnesota property value is no contest. I figure the Twins price value is a little less.

The Padres are 30% owners with the City of San Diego owning the remainder, so not much leverage for the club, except for the ability and prvilege to pay annual property taxes.:banghead:

John Bonnes
08-19-2012, 08:15 AM
Re: TV Deal

The Twins recently extended it, so it isn't the timing that's the problem. It's that SD (I think) now had two regional sports networks. Cox was the old one and Fox Sports San Diego is the new one. FSSD is also partly owned by the Padres.

Remember when everyone was cranky about Victory Sports? That was being done to avoid this situation.

However, all of that should be taken into account of the Forbes values.

Rosterman
08-19-2012, 09:37 AM
Let's just say that the Pohlads shouldn't complain about losing money...in the long run.