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  • Where Should Payroll Sit in 2013?

    Since they moved into Target Field, the Twins have seen payroll rise and fall, from $96 million in the opening season, up to $112 million the following year, down to $94 million in 2012.

    The rise to $112 million last year was purportedly the result of a push to take the next step after falling short in the 2010 postseason. The subsequent scaling back by nearly $20 million was easy enough to figure; the Twins had lost 99 games which led to reduced revenue and also led to a lessened belief that contention in the next year would be possible.

    Revenues only dropped further here in 2012, as Target Field saw attendance fall by nearly 400,000. The Twins also lost 96 games. So the general belief is that next year's payroll will drop again, perhaps to $90 million or lower. Terry Ryan has backed up that notion by telling reporters that he doesn't plan to pursue high-profile free agents, which may either be a sign that he's uncomfortable giving big-money long-term deals to pitchers (justifiable) or that the club is simply unwilling to spend on the open market to address its issues (less justifiable).

    Can the Twins really afford to worry so much about what they can afford?

    A drop to $90 million or below might make sense based on the organization's typical structure, which calls for putting between 50-52 percent of revenue back into payroll, but it doesn't necessarily make sense for the long-term health of the franchise. If the Twins keep trimming the money they put into their roster, they risk further frustrating the fans and continuing this disturbing trend of attendance decline here in Year Four of their sparkling young ballpark.

    There's a snowball effect that comes into play here. If the team's performance keeps scuffling as the shiny newness of the stadium wears off, then attendance will keep dropping and so will revenue. Alas, adherence to the set payroll structure will result in an ongoing decline in spending, which will make it increasingly difficult to field a truly competitive team, particularly with $23 million every year owed to Joe Mauer, who is only getting older.

    It might require them to find money elsewhere and go above their normal percentage, but I believe the Twins should absolutely raise payroll above its current level rather than letting it drop for a second straight year. They don't necessarily need to get back into that $115 million range, but $100 million seems like a reasonable target.

    While additional spending hardly guarantees a winning team, it does demonstrate to fans a firm commitment to righting the ship, and the extra players brought aboard with that money are bound to generate excitement and sell some tickets.

    This is a pivotal offseason for the Twins, and one that could very well determine the course of the organization over the next several years. Will ownership play it safe at the risk of exacerbating a sense of apathy among the fan base, or will they green-light some bold moves to give their stagnating product a jolt?

    The latter option wouldn't be very Twins-like. But maybe that's a good thing.
    This article was originally published in blog: Where Should Payroll Sit in 2013? started by Nick Nelson
    Comments 41 Comments
    1. johnnydakota's Avatar
      johnnydakota -
      Quote Originally Posted by jharaldson View Post
      Some payroll facts, if you take the Twins at their word and they spend %50 on payroll then we have some math trouble because in 2007 they spent $71.5 million on Payroll which equates to $143 million in revenue.

      http://www.baseballprospectus.com/co...ts/?page_id=80

      Earlier this year the FSN deal went from $12 million a year to $29 million a year bringing revenue up to $160 million.

      http://www.1500espn.com/sportswire/M...or_Twins010512

      Twins also have naming rights at another $5 million a year bringing revenue up to $165 million a year.

      http://images.businessweek.com/ss/09...s_deals/20.htm

      Plus the most recent national TV Deal will leave each team with $52 million a year ($12.4 Billion / 8 Years / 30 teams) brings Twins revenue up to $217 million a year leaving the Twins a payroll floor of $108.5 million without even accounting for the revenue generated from the stadium and its fluctuating attendance.

      http://mlb.mlb.com/news/article.jsp?...s_mlb&c_id=mlb

      They don't need to spend this all on free agents if they don't think the quality is there but they can increase their investment in the minor league system and if money is still left over they can pre-pay Mauer's contract so when they are in a position to make a run a few years from now they have more payroll flexibility.

      What is not acceptable is putting a mediocre product on the field around $85-90 million and pretending the resources are not in place for something more.
      mlb gameday internet sales of over 12.5 million subscriptions was divide evenly among the 30 teams or about 67 million per team .....
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