Okay, so this has been driving me nuts for a long time.
The ~$26m owed to Ricky Nolasco is not a sunk cost. Nor is the Ervin Santana or Joe Mauer money.
Why? Because the money has not been spent. It has been committed but not spent. Unspent - but committed - money can sometimes be offloaded, thereby removing the burden.
A sunk cost cannot be recovered or refunded. Period. Full stop.
Companies in every industry have to spend money to make money. A company budget may allow for investing money in employee salaries, inventory, office space or any other cost of doing business. Once the company's money is spent, that money is considered a sunk cost. Regardless of what money is spent on, sunk costs are dollars already spent and permanently lost. Sunk costs cannot be refunded or recovered. For example, once rent is paid, that dollar amount is no longer recoverable -- it is 'sunk.'
For example, if a firm sinks $1 million on an enterprise software installation, that cost is "sunk" because it was a one-time expense and cannot be recovered once spent. A "fixed" cost would be monthly payments made as part of a service contract or licensing deal with the company that set up the software. The upfront irretrievable payment for the installation should not be deemed a "fixed" cost, with its cost spread out over time. Sunk costs should be kept separate. The "variable costs" for this project might include data centre power usage, etc.
The Twins have fixed costs, not sunk costs.
Please stop using this phrase. It's maddening. Thank you all for your time.