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Article: $200 Million is the New $100 Million

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#21 Mike Sixel

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Posted 11 December 2014 - 12:08 PM

I don't read anyone saying that spending guarantees anything.....I see people suggesting that having a payroll under the median, year after year, while revenues are skyrocketing, right after getting a new stadium (that was sold as a way to stay competitive), all while NOT being competitive, well, that raises a question.....would they be more likely, or less likely to be competitive, if they had a median payroll?

 

How "crippled" would they be right now had they spent on 3-5 year deals 3-5 years ago, for example?

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It's been a fun year so far, GO Twins. 


#22 James

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Posted 11 December 2014 - 01:28 PM

I don't read anyone saying that spending guarantees anything.....I see people suggesting that having a payroll under the median, year after year, while revenues are skyrocketing, right after getting a new stadium (that was sold as a way to stay competitive), all while NOT being competitive, well, that raises a question.....would they be more likely, or less likely to be competitive, if they had a median payroll?

 

How "crippled" would they be right now had they spent on 3-5 year deals 3-5 years ago, for example?

I think the problem is that they payroll hasn't gone up while the team has been bad.  I don't think people would really be complaining about the payroll at all if the Twins were still winning games.   

 

I agree with you Mike, it probably wouldn't have crippled the team to add contracts 3-5 years ago (besides Willingham).  I actually think that 3-5 year deals tend to be about perfect lengths for contracts.  

 

The problem with arguments about payroll is that they end up trying to correlate losses with lack of payroll, which logic would follow that higher payroll must mean more wins.  But we all know that this isn't true either.  Which must mean that there is some other independent reason that is causing them to lose. 

 

And all this ranting as the Twins add to the payroll by agreeing to a deal with Ervin Santana that fits in that 3-5 year range.  

You can come up with statistics to prove anything. Forty percent of all people know that.


#23 Mike Sixel

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Posted 11 December 2014 - 01:40 PM

No, it doesn't mean "must".....it means likely, probably. If you are decent at drafting, and add players in FA, you are probably better than if you don't add players (or let good players walk). 

 

I think you are confusing "odds" and probability with certainty.

It's been a fun year so far, GO Twins. 


#24 James

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Posted 11 December 2014 - 02:45 PM

You're right, it doesn't mean must.  I generally don't speak in absolutes like that.  Confidence intervals are usually my thing.

 

What I was basically trying to get at was that wins aren't strongly correlated to dollars spent.  Is there some correlation?  Probably.  To do this topic just would take some statistics that could be done, I just don't have the time at the moment.  

 

My argument is more that since the correlation isn't a strong correlation, payroll isn't a very good predictor or wins or losses.  

 

Most of the payroll arguments that I read are trying to connect the Twins lower payroll with the cause of the Twins losing.  I'm trying to say it's more a by-product of the Twins losing (and replacing players with younger, cheaper player) rather than the cause. 

You can come up with statistics to prove anything. Forty percent of all people know that.


#25 TheLeviathan

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Posted 11 December 2014 - 03:07 PM

Vodka Dave is right.  The fans aren't shareholders.  They're customers.  Pocketing money from customers is exactly what businesses do.  

 

My point was payroll isn't the biggest reason for the Twins losing in recent years.  I also agree that the Twins management shouldn't be avoiding free agents just because payroll doesn't win games.  

 

Except, in many ways, we are shareholders.  It isn't a perfect analogy, but there isn't one for this situation because professional sports operate outside many normal business rules and scenarios.  The closest thing to what the Pohlads are doing, in my opinion, is pocketing things behind the backs of shareholders.

 

Having a higher payroll does not mean winning more games by and large.  But with 100% certainty I can tell you that the Pohlads pocketing money does NOTHING to win more games. 


#26 James

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Posted 11 December 2014 - 04:06 PM

Except, in many ways, we are shareholders.  It isn't a perfect analogy, but there isn't one for this situation because professional sports operate outside many normal business rules and scenarios.  The closest thing to what the Pohlads are doing, in my opinion, is pocketing things behind the backs of shareholders.

 

Having a higher payroll does not mean winning more games by and large.  But with 100% certainty I can tell you that the Pohlads pocketing money does NOTHING to win more games. 

But not adding payroll doesn't necessarily lose you games either.  That's what I'm trying to say.  It might in some cases, but payroll overall isn't a good predictor of wins/losses. 

 

Moot point as the Twins just bumped up the payroll.  Hopefully it's more tolerable and a better product.

You can come up with statistics to prove anything. Forty percent of all people know that.


#27 TheLeviathan

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Posted 11 December 2014 - 04:42 PM

But not adding payroll doesn't necessarily lose you games either.  That's what I'm trying to say.  It might in some cases, but payroll overall isn't a good predictor of wins/losses. 
 
Moot point as the Twins just bumped up the payroll.  Hopefully it's more tolerable and a better product.


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.

#28 whydidnt

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Posted 11 December 2014 - 05:10 PM

I think the problem is that they payroll hasn't gone up while the team has been bad.  I don't think people would really be complaining about the payroll at all if the Twins were still winning games.   

 

I agree with you Mike, it probably wouldn't have crippled the team to add contracts 3-5 years ago (besides Willingham).  I actually think that 3-5 year deals tend to be about perfect lengths for contracts.  

 

The problem with arguments about payroll is that they end up trying to correlate losses with lack of payroll, which logic would follow that higher payroll must mean more wins.  But we all know that this isn't true either.  Which must mean that there is some other independent reason that is causing them to lose. 

 

And all this ranting as the Twins add to the payroll by agreeing to a deal with Ervin Santana that fits in that 3-5 year range.  

Actually, I disagree. I think there is a pretty strong correlation between high payroll teams and winning. Spending more doesn't guaranty that you will win the world series or even make the playoffs. However, it does give you a better chance at winning. That's not to say you HAVE to spend the most to win, but payroll is a factor. That's not to say, you spend just to spend, like the Phillies have seemed to do recently, just that to artificially limit what you spend in the market will likely make you worse than you could be. 

 

I can't seem to find the article, but there was one on Fangraph's or the Hardball Times a couple of years ago that showed that teams in the top 10 in spending were much more likely to make the playoffs than teams in the bottom 10. To me that's a strong correlation. 


#29 by jiminy

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Posted 11 December 2014 - 05:14 PM

I would just add that if their revenue doubles, and they double their payroll, their profit STILL doubles. And they're not even doing that!

 

I was never a big fan of just accepting as an axiom that payroll = half of revenue. To me that just means, give us a subsidy, and we'll pocket half of it, and MAYBE we'll consider spending some of the rest on the team. But our cut is 50% minimum. And everyone usually confines their kvetching to the unspent part of the "available" 50%. But why? I would like to think that if we subsidize a private business, that money should at least go into the team, not straight into the bank.

 

Seriously. I would have much rather seen a bond initiative to just go out and sign free agents, and give them to the Twins. If you really wanted a new stadium,make the subsidy contingent on the Twinsbuilding a new stadium with their own money. You'd get more for your money that way. I hate no-strings-attached giveaways. You sign the check, you call the shots. (Otherwise it's like givingbanks billions of dollars so they'll lend money to people, but never actually requiring them to do so! Oh...)

 

But think of how much more fun a direct subsidy would have been. You could require a new vote each year, to keep the pressure on the Twins to spend their own money too, or we walk.

 

You could vote for shadow GMs to decide how to spend the money: nominate your favorite blogger!

 

Or if you wanted to let Twins management decide who to sign--they after all know more about building a team than we do--we could say, the state will match every dollar you spend on payroll over $100 million. I'd vote for that! At least, I'd choose that over just giving them a stadium, and hoping they spend some of the new revenue on players, and then watching them make record profits instead.

 

By the way, I love the use of the verb "pocketed" -- one of may favorites when talking about moneybags types.


#30 whydidnt

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Posted 11 December 2014 - 05:16 PM

I couldn't agree more with the original post. The most frustrating thing to me is that the Twins have obviously pulled back from the supposed 52% of revenue number over the last few years and have just pocketed the money. We don't get to see the number's but with the new TV money, combined with the new stadium windfall, 52% of total revenue was likely somewhere north of $125M the last three years. Instead of investing that in the team, the owner's decided to keep it for themselves.  That is certainly their right as owners. But counter to that, it's my right as a fan to vote with my own dollars, and chose to spend them on other forms of entertainment, which is what I have done over the last couple of years. My attendance at Twins games has dropped from a high of 23 games to 2 last year. 

 

Maybe if the Twins showed a little more willingness to put together a winning team, they wouldn't have to keep overpaying for middle of the road Free Agents and elite players would want to play here.


#31 whydidnt

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Posted 11 December 2014 - 05:25 PM

One thread complains about not spending enough and the other complains about who they spent on.Confusing.

 

 

Not really confusing to me at all. How about spend more money, but also spend wiser, so you get more for what you spend. Sorry, but spending $10.5 million dollars on a 39 year old OF this year is not a wise investment, any more than re-signing Mike Pelfrey to a 2 year $12M dollar deal was last year. I am of the belief that not only aren't they spending enough, they often don't do a good job deciding who to pay. I don't want them to spend just to spend. I want them to make good baseball decisions, but not let money be the primary limiting factor to those decisions, which is what has happened for 3 straight off-seasons. 


#32 James

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Posted 11 December 2014 - 05:54 PM

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.

You can come up with statistics to prove anything. Forty percent of all people know that.


#33 Mike Sixel

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Posted 11 December 2014 - 07:56 PM

And not just through the draft.....but through all channels. Which, they seem to be doing now. Don't love all the decisions. ......but at least they are trying. Now we need to judge the outcomes.

It's been a fun year so far, GO Twins. 


#34 ashbury

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Posted 11 December 2014 - 08:46 PM

Now we need to judge the outcomes.

Or... enjoy some baseball. :)

If you judge people, you have no time to love them. -- Mother Teresa


#35 TheLeviathan

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Posted 11 December 2014 - 09:46 PM

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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#36 Rosterman

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Posted 11 December 2014 - 10:48 PM

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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#37 kab21

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Posted 12 December 2014 - 07:17 AM


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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Is 2016 2017 2018 the year that a good pitching prospect is truly blocked by 5 good pitchers in the starting rotation? 

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