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Article: Twins Payroll Really is Resource Allocation

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#21 spycake

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Posted 18 January 2019 - 08:37 AM

2019 is really all about Rosario, Sano, Buxton, Polanco, Berrios, Kepler etc. The Twins need to find out if this wave is actually who they thought they were or if 2018 was what the future holds. If they do become the solid core that management hoped for, they are far enough along that consideration needs to be given to near future arbitration costs and long term contracts.

These guys aren't prospects anymore, or even first or second year players. We have a ton of data on them already, and the data says that very few of them warrant a long term deal -- perhaps only Berrios, and as a pitcher, that should clock in less than a deal for a similarly situated position player. Even if some of them perform well in 2019, they still won't have a track record to warrant a commitment of significant long-term dollars. How much would you want to bet on one good year from Kepler or Polanco after a string of average ones?

Now is a good time for a major investment externally because we have an internal group that could be useful but generally doesn't look like stars, and our best internal star potential might be 6+ years away (Lewis, Kirilloff, etc.).

In your opinion, is there ever an appropriate time for the Twins to spend on a significant FA? Seems like that might be the real issue, rather than anything special about guys like Kepler and Polanco.

Edited by spycake, 18 January 2019 - 08:37 AM.

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#22 mazeville

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Posted 18 January 2019 - 08:41 AM

I think that many people are missing the point about payroll. It's more about investing when the time is right.

 

First, if the Twins get $260 million/year in revenues and plan to spend 50% of that, theoretically they should spend $130 million a year and therefore should spend another $30 million or more on payroll. Thus, people are looking at that single number and wondering why the Twins aren't spending more now, in an apparent belief that the $30 million will disappear into the ether.

 

But that $30 million does not disappear. If the Twins are smart, and I'm going to assume that they are, then they will have that to spend in another year. Thus, if things work out right this coming season, they can spend more on the roster next year and theoretically can spend $160 million in 2020. 

 

The two single biggest questions going into this season are named Byron Buxton and Miguel Sano. If you as a GM are looking at those two players, are you confident they will come back and reach their potential? They are two, massive "ifs." Eddie Rosario and Max Kepler are also question marks. The base of this team is uncertain. 

 

That means spending a lot of money this year on payroll is a risk. I can buy the idea of the Twins holding off on spending IF they spend when the time is right. 

 

What I do NOT want to happen is this: The Twins do start contending and the team holds off on payroll to that 50% standard -- which would keep them at $130 million. A payroll of $130 million for a contending team with a core of players going into their primes is awfully restrictive. 

 

In the 2000s, when the team was in contention year after year, the previous regime did very little to bolster the roster by spending on a player or two to push the team over the top. They did not invest in the stud starting pitcher or the middle-of-the-order bat, either at the trade deadline or in free agency. And a team that at points was talented enough to win a World Series never even got there.

 

So think of revenue not as a resource that disappears after a year but as ammunition that can be put to use when you are in best position to win the battle. If you were at war, you would not use up all of your ammunition if you were not in position to win. You would hold off until you had a good position. That's what the Twins should do.

 

The Pohlads have earned this skepticism by holding down spending for so long and threatening to contract the team. And they have also earned that right by taking public money on a new stadium. 

 

I will reserve judgment until they do start contending. If Buxton and Sano return to form this season and the team starts winning games and the team doesn't make moves to bolster the roster at the deadline and then does nothing but peruse the bargain bin next offseason, then I'll be at Target Field with a pitchfork. 


#23 spycake

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Posted 18 January 2019 - 08:46 AM

To a lesser degree the same thought applies to Garver, Austin, Cron, and many of the younger bullpen arms.


No. Mitch Garver is a 28 year old catcher, with 5 years team control. Cron is a 29 year old nontendered 1B. Rogers is a 28 year old middle reliever with 4 years control. May is a 29 year old reliever. In what universe do the Twins need to consider keeping significant payroll flexibility for these guys?
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#24 Craig Arko

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Posted 18 January 2019 - 08:53 AM

Aren't all payrolls company resource allocation, by definition?

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#25 lukeduke1980

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Posted 18 January 2019 - 08:56 AM

 

Who is a part of the Twins core right now?Buxton? Sano? Kepler? Meija? Rosario?The Twins core is totally in flux we really have no consistent performers from last year other than maybe Gibson and Berrios and if you want to squint Rosario and Polanco.Is that a core you invest in early?If it were me I wouldn't but then I am not a huge gambler.

 

This is really the crux of all issues to me.Though it's also a nice built in excuse.If you bring in talent you'll find at bats for those who deserve them.  

 

The continued inaction on improving the bullpen to me is a lost opportunity.You have a potentially young competitive team that lost so many close games last year, with virtually no contributions from Buxton/Sano.It seems like the WS Royals team's core almost rose to the height of their strong bullpen.Why couldn't that happen here.

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#26 spycake

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Posted 18 January 2019 - 08:57 AM

Finding out about these players does not preclude being competitive in 2019, but this year's decisions should all be made in the context of the player development. The process probably does discourage long term commitments to aging veteran FA's.


How about short term commitments? How about young FAs like Machado or Harper?

It's easy to argue against "long term commitments to aging veteran FA's" but there is a lot more nuance to the market than that. Take a look at some of the 2 year deals that have already been signed this offseason, and explain to me how adding two of those would have jeopardized the franchise's long term health:

https://www.mlbtrade...ontract_years-3
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#27 Tomj14

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Posted 18 January 2019 - 09:28 AM

 

2019 is really all about Rosario, Sano, Buxton, Polanco, Berrios, Kepler etc. The Twins need to find out if this wave is actually who they thought they were or if 2018 was what the future holds. If they do become the solid core that management hoped for, they are far enough along that consideration needs to be given to near future arbitration costs and long term contracts. To a lesser degree the same thought applies to Garver, Austin, Cron, and many of the younger bullpen arms.

Everyone of those players have a minimum of three years in the majors, and for the most part have been above average (positive WAR) every year.

This is the EXACT Time to invest in Talent. They are cheap now,

If the Twins are waiting to see if these players are worth building around, it is too late and they should have traded them away for prospects. Because if they aren't worth it the minor are filled with average future major league players and a few top prospects.

You put Manny or Harper with this group and wow this group looks much better.

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#28 ashbury

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Posted 18 January 2019 - 09:42 AM

But that $30 million does not disappear. If the Twins are smart, and I'm going to assume that they are, then they will have that to spend in another year.

Your assumption is where this goes wrong at the outset. Team officials have stated on multiple occasions that they do not do their payroll planning this way whatsoever.

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#29 Thrylos

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Posted 18 January 2019 - 09:45 AM

 


You put Manny or Harper with this group and wow this group looks much better.

 

Are you suggesting that the Twins will look much better supplemented with a proven bat?

If you are, this is exactly what they did this offseason:

 

2018 numbers:

 

Machado: 122 OPS+, .377 wOBA, 141 wRC+
Harper: 133 OPS+, .376 wOBA, 135 wRC+

 

Nelson Cruz: 135 OPS+, .361 wOBA, 134 wRC+

 

Slice it any way you want, and Cruz's bat in 2018 (a down season for him btw) was pretty close to that of Machado and Harper.The commitment is not, allowing them to spend extra money for other needs (pitching).Plus his clubhouse influence I suspect will be better than that of a Machado.

 

Edited by Thrylos, 18 January 2019 - 09:46 AM.

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#30 ahart10

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Posted 18 January 2019 - 09:49 AM

Now is a good time for a major investment externally because we have an internal group that could be useful but generally doesn't look like stars, and our best internal star potential might be 6+ years away (Lewis, Kirilloff, etc.).

Yes and yes. The money is off the books, prospects are just that and let’s not worry about blocking someone years down the road. A spot can always be made. This team is decidedly average everywhere. If only a couple of star players, or maybe just one superstar, were available for big money/short term the Twins could actually look like contenders. The Royals make a push when they’re looking good. Brewers are currently all in and have shown a willingness to make big trades/FA signs for long term and rental pieces when they see a window. When was the last time the Twins made a win now move, Lance Lynn and LoMo don’t count?
Maybe a couple real win now moves shows these guys the FO believes in them and this “core” might just step up and become just that. I’m about to be a Brewers fan.

Edited by ahart10, 18 January 2019 - 09:51 AM.

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#31 Doomtints

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Posted 18 January 2019 - 09:58 AM

The triple constraints are important to understand for any organizational effort. They are:

 

1) Cost - In this case, player salaries

2) Time - The 2019 season

3) Scope - What do they want to accomplish? (This has to be more granular than "win the division")

 

Stakeholders typically pick one constraint as the most important. We know which one that is for the Twins.

 

This is called the triple constraint because changing one will always affect at least one of the others. In the case of the Twins, a cost constraint limits the scope of what they can do.

 

There are still things the Twins can do on the scope side if the cost side sucks, but they have to focus on small things. Improving defense across the board. Improving OPS at certain positions. Higher OBP at three positions, more lefties, whatever.

 

The Twins have to figure out exactly what they want to do, because that time constraint isn't changing. Note that punting on the year doesn't help. The primary constraint for this organization (cost) will still be there next year and the year after. There's no point in punting, they have to be creative to make it work with what they've got.

 

This organization has to focus on small improvements and hope everything aligns the right way at the right time at some point down the road, and yes be very careful with 1-year deals as they will shoot themselves in the foot unless they decide to change that cost constraint. The only issue with long deals is the cost constraint takes them off the table, they're not actually "bad."

 

Give credit to Ryan for understanding this, but keep the demerits by his name for not executing on it. And you didn't REALLY believe it when Pohlad said Ryan was mistaken in this, right?

Edited by Doomtints, 18 January 2019 - 10:16 AM.

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#32 saviking

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Posted 18 January 2019 - 10:10 AM

I've read on this site, on multiple occasions, that the Twins ownership/management (one or the other or both) cap expenditures at some percentage of revenue and excess profit is not carried over to next years budget. Correct me I'm wrong, but if true...

Setting a target budget based on percentage of revenue is good business. It's the refusal to use the money saved by coming under budget I find infuriating. It's an arbitrary rule that handicaps the team's ability to compete.

Normal people don't budget that way. I have no problem financing an expensive vacation next year by staying home this year, or driving an old vehicle a couple extra years in order get a better ride when I finally replace it. I think the fans would be fine with a couple seasons on the low end of the salary range to finance a Machado signing. That, in my opinion, drives all the anger over the Twins budget. It's a one way ratchet that can come in millions low season after season but will never go 1 dollar higher.

Given the refusal to carry over money year to year and the taxpayer funding of Target field the Twins, in my opinion, have a moral obligation to spend up to their self-imposed maximum each year. If it costs them an extra $20,000,000 to win an additional home game at least they gave their best shot at entertaining the fans who funded the stadium. And who knows, maybe that extra win puts the team in the playoffs.

The argument that there's no use spending the money because the team is not in position to contend is BS. If the ownership doesn't see it that way they can refund the tax money and set the budget as low as they want. Once you take the citizens cash you have an obligation to put the best team you can afford on the field. Forfeiting the season while you pocket an extra 10 or 20 million is no longer an option.

My point is, fiscal prudence only makes sense in the long term. If saving money this year does nothing to improve next years team it's just ownership screwing the fans, again.




I also agree with using a percentage of revenue on players but also agree any unspent money should carry over to the next year. The main reason is talent (provided the money is spent wisely) raises revenue which raises the amount of money you can spend on talent .. =SA=

#33 Mike Sixel

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Posted 18 January 2019 - 10:18 AM

The core had a great year in 2017. The twins made no long term signings to supplement the core. All those holes exist again this year. Why do people think if the core is great this year, it will be any different?

This is who they are. A team that does not spend money over the long term. Mauer was the exception.
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#34 ashbury

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Posted 18 January 2019 - 10:25 AM

I also agree with using a percentage of revenue on players but also agree any unspent money should carry over to the next year. The main reason is talent (provided the money is spent wisely) raises revenue which raises the amount of money you can spend on talent .. =SA=

Although the team has repeatedly said they don't do this, let's explore the "should" aspect of it. Suppose they aim for $130M a year, but this year end up spending only $100M. Do they add $30M to the pot next year and spend $160M? They acquire a couple of expensive guys, and let's say they do well. What happens after that? Suppose the team as a whole does well with this expensive roster, makes the playoffs and even wins a round in the postseason before bowing out. Now the budget needs to go back down to $130M. Talented guys will be disposed of, in one form or another. What kind of PR will that be?

 

I disagree with any excess money being pocketed, for a variety of reasons, but simply carrying over the money has its problems.

 

I'd personally like to see un-used payroll headroom be applied to different ways of making the team strong, such as acquiring prospects. Unfortunately MLB has successively moved to limit the ability to do that, with hard caps on draft spending and likewise punitive policies on international signings past a certain threshold.

 

It's nice to say money should carry over, but the devil's in the details.

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#35 Dman

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Posted 18 January 2019 - 11:00 AM

 

IIRC, the Cubs did sign Lester after a 72 win season, although I guess they still had room to spend more later.

I do wonder, though, if these teams were able to do this because their "rebuilds" went so well. If Correa turned out like Buxton, maybe Houston signs a big FA to help things along? Same for Bryant turning out like Sano for the Cubs? (And Cleveland fans might argue that their team hasn't yet spent enough to support the talent they've developed...)

 

Agreed and I am not saying the Twins shouldn't spend up to 130M this year just that I am OK if they don't.A Machado or Harper Deal Should be good for the team long term as they are young proven star players.At some point the Twins are going to need to go long term with their best players.The Question I have for this team is exactly who is that right now?

 

I agree the builds went much better for Houston and the Cubs the Indians seemed to have some stops and starts with theirs as well.The Twins have room for a big contract but I can see why they might want to wait as well.If their core doesn't perform I don't think they can buy their way out of that mess.They will have to wait for the next wave and that is three to four years away IMO.


#36 mazeville

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Posted 18 January 2019 - 11:01 AM

 

Your assumption is where this goes wrong at the outset. Team officials have stated on multiple occasions that they do not do their payroll planning this way whatsoever.

 

Link? I have not seen anything that suggests they wouldn't do this. 

 

In any event, if they don't, then as I said that the bottom of the comment that I'll be pretty furious. 


#37 Tomj14

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Posted 18 January 2019 - 11:01 AM

 

Are you suggesting that the Twins will look much better supplemented with a proven bat?

If you are, this is exactly what they did this offseason:

 

2018 numbers:

 

Machado: 122 OPS+, .377 wOBA, 141 wRC+
Harper: 133 OPS+, .376 wOBA, 135 wRC+

 

Nelson Cruz: 135 OPS+, .361 wOBA, 134 wRC+

 

Slice it any way you want, and Cruz's bat in 2018 (a down season for him btw) was pretty close to that of Machado and Harper.The commitment is not, allowing them to spend extra money for other needs (pitching).Plus his clubhouse influence I suspect will be better than that of a Machado.

I agree.

I like the Cruz signing, but adding another proven bat in their prime for the duration of their "prime" means one less hole to fill for the next X amount of years.

I am not seeing a lot of FA's next year that I like, unless the twins want to pay for Bogaerts or a 31 year Rendon.


#38 Dman

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Posted 18 January 2019 - 11:05 AM

 

But we aren't even doing a rebuild, we're just wallowing in mediocrity.

 

Yep I get that and it makes me sad thinking about it.The thing is if we don't have a group of consistent performers we essentially haven't completed the rebuild.If we never complete this rebuild then we might have to do it over again.

 

It doesn't mean the Twins can't spend 130M per year I can just see why they might not want to just yet.

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#39 Dman

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Posted 18 January 2019 - 11:09 AM

 

I agree that the priority should be to extend our core, if they ever show up.However, we have control on these guys for multiple years. We could easily pick up a couple of players on 2 year deals and not affect that plan.

 

I agree with you they can spend to the limit now. Never hurts to add talent and if you get them on short term deals it won't hurt the long term plan.All I was trying to point out is they have a strategy that is in line with what made other teams successful and those teams didn't really spend to the upper limit until they had a solid core.I don't see that the Twins have that just yet so I can see why they might not want to spend to the upper limit just yet.

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#40 ahart10

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Posted 18 January 2019 - 02:35 PM

If unspent money was going to be spent in later years Twins could sign Machado and Harper for whatever they wanted.

Edited by ahart10, 18 January 2019 - 03:33 PM.

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