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The Marlins are Ridiculous... Or Are They? Baseball Econ 101

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#1 Curt

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Posted 14 November 2012 - 12:43 PM

How do we know if a team's payroll is too high or too low?

AFAIK, teams do not share their financial information with the public. None are publicly held, which would require disclosure. Not only do they not have to disclose the information, they do not have to be honest with what they do disclose.

What we might need to know is how does the payroll affect these...

1. The long-term value of the franchise? News flash... Most of the money made in baseball is made when the franchise is sold. Calvin Griffith cried about losing money most years then retired to his ranch when he sold his burden to poor Carl Pohlad for $44 Million. Poor Carl's $44 Million investment was worth $510 Million the last time Forbes estimated it (which comes to 9.14% annualized for 28 years. The Yankees went from $8.8 Million when Steinbrenner bought them in '73 to $1.85 Billion in 2012, 14.7% annualized for 39 years!).

2. The franchise's short-term profit? Short-term profit might keep investors from having to hire younger, less-expensive yacht staff (which need to be trained) and might help long-term value (see above). Lack of short-term profit does not necessarily kill reason #1 (see above about Calvin).

3. Winning. This is important in so far as it helps the reasons stated above. But winning is not the only path to success. Just look at the Cubs (sold for $21M in 1981 and for $845M in 2009 or 14.1% annualized for 28 years).

As fans we want our teams to win. Ownership just might have a slightly different take on it.

#2 Cody Christie

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Posted 15 November 2012 - 07:13 AM

It seems like the Marlins are going to continue to be run like this until they get a new ownership group.

#3 beckmt

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Posted 15 November 2012 - 07:55 AM

Which is why the Twins should inquire on RIcky Nolasco(Stopgap1 to 2 years). I would offer like a Joe Benson as all Miami may want is salary relief. Outside of that they need a new ownership group.

#4 allenmarton

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Posted 20 December 2012 - 11:45 PM

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#5 Rosterman

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Posted 20 December 2012 - 11:59 PM

You will lose just as many games with a $100 million payroll as a $30 million payroll. Will the Twins actually do better this year with a $75 million payroll?
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#6 Rosterman

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Posted 21 December 2012 - 12:01 AM

How come we don't know how much money the staff makes, even coaches. What is Terry Ryan paid, or Dave. St. Peter. What do the minor leagues cost to operate: personnel vs. real estate/equipment. hat is the true operational costs for tickets/sales, advertising, media. How much do the Twins generate in advertising revenue. What percentage comes from corporate sponsorships.
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#7 Top Gun

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Posted 21 December 2012 - 12:15 AM

The Marlins could beat the Twins pretty easily.

#8 SpantheMan

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Posted 21 December 2012 - 01:22 AM

The Marlins could beat the Twins pretty easily.


That is just depressing. But i think I would take the 2015 twins over 2015 marlins so there's that.

#9 SpiritofVodkaDave

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Posted 21 December 2012 - 01:55 PM

How come we don't know how much money the staff makes, even coaches. What is Terry Ryan paid, or Dave. St. Peter. What do the minor leagues cost to operate: personnel vs. real estate/equipment. hat is the true operational costs for tickets/sales, advertising, media. How much do the Twins generate in advertising revenue. What percentage comes from corporate sponsorships.

Because it is a private company.

#10 James

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Posted 21 December 2012 - 03:01 PM

How come we don't know how much money the staff makes, even coaches. What is Terry Ryan paid, or Dave. St. Peter. What do the minor leagues cost to operate: personnel vs. real estate/equipment. hat is the true operational costs for tickets/sales, advertising, media. How much do the Twins generate in advertising revenue. What percentage comes from corporate sponsorships.

How much money do you make a year? Why can't the rest of us know?

For the record, I don't really want to know. But as vodkadave said, it's a private company. They don't have to disclose anything at all if they don't want to, just like you don't have to disclose that sort of thing to me or the rest of the TD community.

The minor league costs are a little different, because minor league teams are generally not owned by the MLB team (with a few exceptions). So, there you're asking for financial information from more than one private company.

If you want to look at financial statements for some teams, some of them were leaked a while ago. The Twins were not one of them though. You're not going to get actual numbers for how much the GM made, but you might get an idea of how much they pay the entire front office.

MLB Confidential: The Financial Documents Baseball Doesn't Want You To See, Part 1

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


#11 gil4

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Posted 21 December 2012 - 03:23 PM

hi all



Allen is on the board with post #1. Hi Allen. Welcome! (I'm trying to pad my numbers - only about 35,000* posts to catch VodkaDave.)



[SIZE=1]* - Estimate - might be slightly high.
[/SIZE]

#12 kab21

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Posted 21 December 2012 - 08:37 PM

The Marlins could beat the Twins pretty easily.


Stanton can only hit once in the order so this isn't close to true.

#13 SpiritofVodkaDave

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Posted 22 December 2012 - 12:17 PM

How much money do you make a year? Why can't the rest of us know?

For the record, I don't really want to know. But as vodkadave said, it's a private company. They don't have to disclose anything at all if they don't want to, just like you don't have to disclose that sort of thing to me or the rest of the TD community.

The minor league costs are a little different, because minor league teams are generally not owned by the MLB team (with a few exceptions). So, there you're asking for financial information from more than one private company.

If you want to look at financial statements for some teams, some of them were leaked a while ago. The Twins were not one of them though. You're not going to get actual numbers for how much the GM made, but you might get an idea of how much they pay the entire front office.

MLB Confidential: The Financial Documents Baseball Doesn't Want You To See, Part 1

This isn't obviously directed at you:

But...one thing I find annoying is people constantly complaining about owners wanting to "make" money. Sure, it would be nice if the Pohlads could just throw around money and not care about profits, but at the end of the day it is a business. If someone doesn't like the product, then stop going/watching. Reading thread after thread about how much people think the Twins payroll should be etc gives me some serious tired head.

#14 Top Gun

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Posted 22 December 2012 - 12:43 PM

Then try soaking your head.

#15 Riverbrian

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Posted 22 December 2012 - 01:51 PM

Then try soaking your head.


lol.. Gun... You obviously have a strong negative feeling about our Twins.

#16 Fire Dan Gladden

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Posted 22 December 2012 - 06:29 PM

I always wonder about the individuals that constantly complain about the Twins regardless of the move or situation. I mean, why even bother putting so much time and effort into a team if you can't enjoy it sometimes?

As someone once said "Just be glad you don't wake up in the morning with the same outlook on life as them."

#17 beckmt

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Posted 22 December 2012 - 06:37 PM

Twins need to come close to breaking even. They still have some bills from the building of the statium. Payroll will likely be between $80 - $85, plenty if you are rebuilding without saying you are rebuilding. Twins will need to spend extra money in 2- 3 years when hopefully the farm system brings enough talent to be competitive for at least division titles.

#18 Thrylos

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Posted 22 December 2012 - 07:39 PM

What should be added in the original statement is that using their strategy the Marlins won 2 World Championships since the Twins won their last. So, at least their way has been more effective that the Twins' way.
Fact.
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#19 Riverbrian

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Posted 22 December 2012 - 08:22 PM

Thrylos is back... With extra juice!!!

#20 biggentleben

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Posted 22 December 2012 - 08:30 PM

What should be added in the original statement is that using their strategy the Marlins won 2 World Championships since the Twins won their last. So, at least their way has been more effective that the Twins' way.
Fact.


Not fact. The current ownership group took over in 2002. The pieces to that 2003 team were already there when they took over. So the current ownership's strategy has won them 87 games in 2009, but other than that, their building has left the organization with a sub .500 record, even with the championship season.
Staff Writer for Tomahawktake.com, come check it out!

#21 Top Gun

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Posted 22 December 2012 - 08:42 PM

Maybe the Twins need new ownership then.

#22 darin617

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Posted 22 December 2012 - 11:03 PM

Because it is a private company.


Here is a really good question that cannot be answered. How can MLB teams call themselves a private company when a high percentage have their stadiums paid for with public funds(taxpayers). They should make all teams that have received public money for stadiums to open up their books and make them public to show how bad they really needed help to pay for their stadiums.

Like that would ever happen! Could you imagine how terrified owners would be if they had to show the books about how much money they really make.

#23 kab21

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Posted 23 December 2012 - 12:54 AM

The Twins getting a stadium isn't much different from all of the deals that are made to attract big businesses (like cheap land or major infrastructure improvements). The Twins just have more visibility.

I've said it in another thread but I don't really have a problem with what the Marlins did. They were terrible and they got rid of two BIG contracts and a guy that was a FA in a year. Some dismiss the prospects that they got back but there are a couple top 100 prospects in the deal.

It sucks that it happened a year after the Marlins opened a new stadium but most of that is due the Marlins having no plan. They just signed those two BIG contracts last season due to opening the new stadium.

#24 SpiritofVodkaDave

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Posted 23 December 2012 - 09:37 AM

The Twins getting a stadium isn't much different from all of the deals that are made to attract big businesses (like cheap land or major infrastructure improvements). The Twins just have more visibility.


Thank you!
This is very true and exactly spot on.

Who cares anyways? I could care less if the Pohlads make 1 dollar or 100 million dollars a year, all I care about is the team. The Pohlads have no obligation to spend X amount of revenue each yeah on players. Like any other business in America they have to make sure they spend enough to keep customers coming back though.

#25 birdwatcher

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Posted 23 December 2012 - 10:00 AM

If all things were fair and equal (TV and stadium revenues, etc.), and the ONLY focus was on winning the World Series, then each team would win one pennant during a thirty year cycle.

Since things are not and never will be fair and equal, exactly how often would you expect a WS pennant victory?

#26 SpiritofVodkaDave

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Posted 23 December 2012 - 10:07 AM

If all things were fair and equal (TV and stadium revenues, etc.), and the ONLY focus was on winning the World Series, then each team would win one pennant during a thirty year cycle.

Since things are not and never will be fair and equal, exactly how often would you expect a WS pennant victory?

Every 20-25 years seems about right to me.

#27 darin617

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Posted 23 December 2012 - 11:18 AM

The Twins getting a stadium isn't much different from all of the deals that are made to attract big businesses (like cheap land or major infrastructure improvements). The Twins just have more visibility.

I've said it in another thread but I don't really have a problem with what the Marlins did. They were terrible and they got rid of two BIG contracts and a guy that was a FA in a year. Some dismiss the prospects that they got back but there are a couple top 100 prospects in the deal.

It sucks that it happened a year after the Marlins opened a new stadium but most of that is due the Marlins having no plan. They just signed those two BIG contracts last season due to opening the new stadium.


The thing that should bug you about the Marlins trading all those players is really simple, they never intended to keep any of them long term. All contracts were back loaded so Miami didn't have to pay much of their salaries and dumped them on to whoever would take them on for prospects.

#28 70charger

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Posted 27 December 2012 - 02:18 PM

If all things were fair and equal (TV and stadium revenues, etc.), and the ONLY focus was on winning the World Series, then each team would win one pennant during a thirty year cycle.

Since things are not and never will be fair and equal, exactly how often would you expect a WS pennant victory?



That's not true. For example, there are 20 wedges on a dart board. If you threw 20 darts at it randomly, would you really expect to hit all 20 wedges?

Randomness usually doesn't look random.

#29 nicksaviking

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Posted 27 December 2012 - 03:12 PM

Thank you!
This is very true and exactly spot on.

Who cares anyways? I could care less if the Pohlads make 1 dollar or 100 million dollars a year, all I care about is the team. The Pohlads have no obligation to spend X amount of revenue each yeah on players. Like any other business in America they have to make sure they spend enough to keep customers coming back though.


Well which is it, do you care about the team, or do you not feel the Pohlad's are obligated to assemble a proper one?

#30 SpiritofVodkaDave

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Posted 27 December 2012 - 03:36 PM

Well which is it, do you care about the team, or do you not feel the Pohlad's are obligated to assemble a proper one?

I care about the team, I just have a basic understanding of how businesses work.

The "Durr durr the Pohlad's are cheap" drivel gets really old, when in fact they have shown an ability to spend over 100 million a year when they feel it's warranted, I believe a couple years ago they were one of the top 8 or 10 payrolls in all of baseball.

Good lord, people act like we are in the middle of the 1993-2000 days again, give me a break.