"The Twins are looking at $396 million in revenue based on this model and are spending only 30% on payroll." - from your post

Your post and the numbers you used raise legitimate questions. 

Posted in another TD thread - if one projects the team’s payroll forward from 2019 - $119M ……Covid year………...2021 - $125M ………2022 - $134M ………(skip 2023 as an over spending outlier - over by &10M at $154M)

7% annual increase is typical for MLB payrolls.

2024 projects to $153M to be parallel to previous years……..Team is at $122M as of today and that’s less than 2021 payroll.

Why??

Promises made by billionaires are not promises at all. Lets call them cheap lies from people who could care less how many games the Twins win. They want to worship their God of Greed. They have decided that pocketing hundreds of millions of dollars a year isnt enough greed for them. They just love money too much.

Just be thankful you arent one of them. Most of the weatlhy people I know are the most repulsive human beings on earth. Almost like having a mental disorder that makes you care only about yourself. You can watch people struggle for the basics while having more than you will ever need or want and yet you want more. What a sickening way to live.

When someone shows you who they are, believe them. I was a Twins season ticket holder for 10 seasons. I remember thinking 11 years ago when I dropped my season tickets that the Pohlads hate their fans. This is just another reminder that I was right. 

Being wealthy nearly guarantees that you are evil AF.

broken promises trying to get a new stadium? Who would have thought.

One of our intrepid TD owners/reporters needs to specifically ask Joe Pohlad and also Dave St. Peter this 50%-52% payroll question. I'd ask the question if I had access to either of these fine gentlemen. Inquiring minds want to know. 

FWIW, it seems like there may have been some double counting. The revenue pile is 48% of each team's monies is collected and then distributed to all 30 organizations. This means that one can only add 52% of whatever revenue the Twins created to that number.

Factually, we don't know all of the numbers and frankly it seems like a futile task that ends in disagreement.

3 hours ago, tarheeltwinsfan said:

One of our intrepid TD owners/reporters needs to specifically ask Joe Pohlad and also Dave St. Peter this 50%-52% payroll question. I'd ask the question if I had access to either of these fine gentlemen. Inquiring minds want to know. 

Aaron Gleeman did ask this at the end of 2022 and Dave St. Peter seemed to have trouble answering but he backed peddled pretty hard compared to his 2008 quote about how he wants to be competitive and competitive teams spend 50% of revenue on payroll.

https://twitter.com/AaronGleeman/status/1575549873343995905

7 hours ago, jharaldson said:

Aaron Gleeman did ask this at the end of 2022 and Dave St. Peter seemed to have trouble answering but he backed peddled pretty hard compared to his 2008 quote about how he wants to be competitive and competitive teams spend 50% of revenue on payroll.

https://twitter.com/AaronGleeman/status/1575549873343995905

 

Dave St. Peter sure did crawfish on his answer to a good, legitimate question asked by Aaron.

7 hours ago, jharaldson said:

Aaron Gleeman did ask this at the end of 2022 and Dave St. Peter seemed to have trouble answering but he backed peddled pretty hard compared to his 2008 quote about how he wants to be competitive and competitive teams spend 50% of revenue on payroll.

https://twitter.com/AaronGleeman/status/1575549873343995905

 

I remember that. I actually also remember my reaction, which was to say, "Shenanigans with words."

DSP is (he is unknown to me in any other way) very unfamiliar or just plain clumsy with the English language.

I don't disagree with the principle of this blog entry but I think it's worth pointing out that other baseball costs have risen dramatically over the past 15 years. Minor leaguers are paid *way* more now (good), front offices are *much* larger, investment in tech and infrastructure is much higher, the list goes on...

It takes a lot more revenue to run all the non-payroll parts of a major league franchise than it did in the past.

With that said, all we have to do is look at the Braves, the only team that has a legal responsibility to open their books to the public. And they're wildly profitable.

Costs have risen, to be sure, but so have profits.

You have to understand that professional sports teams have footprints that are much larger than the arbitrary lines  drawn to determine a DMA (Designated Market Area), MSA (Metropolitan Statistical Area or even the larger CSA (Combined Statistical Area). 

Source Wikipedia

The MSA of Atlanta 6,104,803 - Twin Cities 3,690,512

The CSA of Atlanta is 6,930,4323 - Twin Cities 4,080,232

By extending the arbitrary lines outward to include area surrounding the MSA. Atlanta has picked up 830,000 people. While Minneapolis/St. Paul picks up 390,000 with the addition of St. Cloud and Faribault among other neighboring counties.

What happens if you keep extending out and adding the counties surrounding the arbitrary lines of the CSA?. The answer is Atlanta keeps adding to their advantage.  

I only do this to illustrate the limitations of what you have chosen for data to make your conclusions.

Atlanta isn't just bigger in the Designated Market Area, they increase the margin when you expand out further to arbitrary lines of the MSA and they increase that margin again when you expand you further to the arbitrary lines of the CSA.

So, I'll ask what happens when you expand to add the counties surrounding the CSA. The Answer is that the Atlanta area population will grow that margin even further because there are more people living in those counties then in the Minnesota counties surrounding St. Cloud. I am only typing this for your understanding of the data that you are using to draw your conclusions. They don't support your conclusion.    

At this point it is important to repeat a sentence that I used earlier. Professional Footprints are much larger than the arbitrary lines drawn to determine the MSA. 

Rochester, Duluth, Sioux Falls, Fargo, Grand Forks and Baudette are not included in the Minnespolis/St. Paul CSA.

It would be a mistake to not consider these secondary even tertiary markets when it comes to revenue possibilities for a sports team. Twins games are broadcast exclusively in those markets, the additional market demographic data will be included to determine advertising rates. The advertising rate will determine how much money the broadcast rights are worth.

It is also important to note that the people in Pipestone, not only watch the games from home, they buy Jorge Polanco Jerseys, they travel to home games and they buy a hot dog when they are at the game. If they didn't... the Twins caravan would be an incredible waste of time and effort. It was great meeting Kirby Puckett in Thief River Falls and all but why do it, if they don't matter. 

Once you consider that using MSA or expanded CSA data robs the Twins of the chance to include significant population centers like Rochester, Duluth, Sioux Falls, Fargo and Grand Marais. 

Then you have to consider what you have robbed the Braves of by arbitrarily condensing their footprint. 

The Braves get to tack on fairly large population centers in the state of Georgia like Augusta, Columbus, Macon and Savannah. All of which are bigger or similar size to our largest population center outside the CSA which is Sioux Falls.

Not only that... but Atlanta Braves Territory extends out to neighboring states much like we extend out to the major crowded states of North Dakota and South Dakota. This put Braves broadcasts exclusively in markets like Nashville, Charlotte, Birmingham, Jackson Mississippi and Tennessee plus Knoxville, Asheville and it probably includes New Orleans, and the Raleigh-Durham-Chapel Hill Area. 

Add Nashville to the Braves and compare that to the addition of Duluth. Add Charlotte to the Braves and compare that to the addition of Fargo. Add Birmingham, Mobile, Huntsville, Chattanooga, Biloxi. and compare that to Rochester and Hibbing. 

To put it simply... More people live in the South than live in the North. 

Throw all of this information into the hopper and it still doesn't mean that the Brewers won't have more attendance than the Giants at the end of the year. 

14 hours ago, tony&rodney said:

DSP is (he is unknown to me in any other way) very unfamiliar or just plain clumsy with the English language.

Dave St. Peter's Road From Intern To President And CEO Of The Minnesota Twins | Fargo INC!

Quote

Pretty soon after discovering the media guide, St. Peter began volunteering at the school’s Sport’s Information Center. He would later go on to write for the Dakota Student and work for the Grand Forks Herald before graduating in 1989.

Once graduated with a degree in Public Relations

Not a feather in the cap for the University of North Dakota's major in public relations.

Has anyone ever thought that they might just be wanting to have mid season flexibility?

The team doesn't have a ton of holes.  Another SP is one of them, but it is likely that the Twins win the central division with the options they have now, so an immediate pickup is not critical.  Lopez is a solid #1.  Ober matches up with #2 of other contenders.  Joe Ryan needs to get more consistency.  Paddack is an injury risk (who could probably be replaced by a midseason trade if he gets hurt).  When you look at Varland, Woods-Richardson, Canterino and Festa, they've got 4 young guys that may be able to step up to that #5 role.  If it becomes a problem over the first couple months of the season, they have the prospect depth to trade for an upgrade, who would likely be cheaper or shorter term deal than Montgomery or Snell.

RH outfield depth is the other need.  This was never going to be a big signing.  Maybe the pick up Taylor again, or fill this with young guys in the system stepping up.  Again, if its a big problem, a mid-season trade wouldn't be crazy.  If the Angels don't contend, Aaron Hicks would be available.

The Twins have a lot of good young guys and up and comers.  The salary increases for next season are big.  A reasonable 2024 plan is to stand pat, not lock up even more payroll on long term contracts, see how the young guys step up and if needed, use your prospect depth to make in season tweaks.

A lot has changed since that 50-52% promise but what hasn't changed is that the Pohlads have a PR problem because they have no one that can correctly communicate that we have to pay more before they invest more🤣

This is a structural issue with ownership. The Astros had a losing team because of a bad ownership situation. The team sold and they transformed into a generational winner. 
The Twins are a product of the ownership culture. Ownership simply doesn’t want to invest their generational pocket change into being a perennial champion. At least we have gotten lucky in a few recent draft picks that are building blocks to a championship team but leave it up to the Pohlads and they will likely screw it up somehow. 
There is a distinct line between just competitive and juggernaut.  The Twins have spent decades trying to tiptoe over that line instead of simply taking a step and not looking back.  The revenue from that success would have caught up to the investment. 

4 hours ago, Riverbrian said:

You have to understand that professional sports teams have footprints that are much larger than the arbitrary lines  drawn to determine a DMA (Designated Market Area), MSA (Metropolitan Statistical Area or even the larger CSA (Combined Statistical Area). 

Source Wikipedia

The MSA of Atlanta 6,104,803 - Twin Cities 3,690,512

The CSA of Atlanta is 6,930,4323 - Twin Cities 4,080,232

 

Thanks for responding!  I appreciate that there are different measurements for an audience and that they can fluctuate.  If we look at the 2 you described above we can see that regardless of the difference in size, they are still about the same ratio to each other: 

The MSA of Atlanta 6,104,803 - Twin Cities 3,690,512 - MSP/ATL = 60.4% 

The CSA of Atlanta is 6,930,4323 - Twin Cities 4,080,232 = 58.9%

When I used them in my stats I stated that the Twins could only make 60% of the non-broadcast revenue, which is a small round down from the MSA and a small round up from the CSA.  I would argue that for the purpose of a high level discussion like this that CSA vs. MSA vs. Etc.... is a distinction without a difference.

Quote

It is also important to note that the people in Pipestone, not only watch the games from home, they buy Jorge Polanco Jerseys, they travel to home games and they buy a hot dog when they are at the game. If they didn't... the Twins caravan would be an incredible waste of time and effort. It was great meeting Kirby Puckett in Thief River Falls and all but why do it, if they don't matter. 

Once you consider that using MSA or expanded CSA data robs the Twins of the chance to include significant population centers like Rochester, Duluth, Sioux Falls, Fargo and Grand Marais. 

I don't disagree that folks outside the metro make up a good part of Twins Territory.  The question is how much?  If we look at the Braves statement again we can see that it is broken up into multiple revenue sources:

Baseball Events - $324M - These events are going to be financed in large by local Metro companies purchasing suites and local families purchasing season tickets.  Individual game sales and visits by folks outside the MSA and CSA would be measurable but would not make up a significant amount of this money.

Broadcasting - $139M - This is going to be based on the equal share of national money that is pulled out and a variance in local broadcasting.  My understanding is that the Twins are going to make $40M while the Braves make $68M, which puts the Twins at 58.8% of comparable revenue and in line with my 60% assumption.

Retail and Licensing - $45M - This may have an outsized influence from outside the MSA but this is also the smallest source.  Looking at estimates if the Twins are between 30-60% of Braves revenue in this area it only changes the overall number by $13M total. 

The short of this is I agree with your final statement, despite whatever gymnastics I am doing here I don't know the real numbers.   What I disagree with is that despite this fact, my numbers aren't accurate enough to support my article title of whatever happened to the 50% rule.  They are good enough for that and they are supported by the fact that Dave St. Peter backpedaled into the bushes like Homer Simpson when asked about this by Aaron Gleeman in the context of a $140M payroll at the time.

How does draft, international signings and minor league salaries factor into this. 
 

Spending money is not the only consideration. The money needs to be spent wisely. Look at last year, $70 million was tied up in 4 players who combined to produce slightly more than 4 WAR. 

According to Forbes, the Twins had Revenues of $267 million in 2023... They say that the Twins had $172 million in "Player Expenses." (I'm not sure what the difference is between that and "Payroll" might be... 

Regardless, but that, the Twins should have been at about $133-140 million in 2023. They were at $152 million or so. 

They're down about $20 million in TV revenue in 2024... assume all else is equal, that's $247 million in revenues, which would put them at an expected payroll of $123-128 million. They're at $122ish million right now, and likely still looking for a right-handed bat in the $3-5 million range.

2 hours ago, Seth Stohs said:

According to Forbes, the Twins had Revenues of $267 million in 2023... They say that the Twins had $172 million in "Player Expenses." (I'm not sure what the difference is between that and "Payroll" might be... 

Regardless, but that, the Twins should have been at about $133-140 million in 2023. They were at $152 million or so. 

They're down about $20 million in TV revenue in 2024... assume all else is equal, that's $247 million in revenues, which would put them at an expected payroll of $123-128 million. They're at $122ish million right now, and likely still looking for a right-handed bat in the $3-5 million range.

Perhaps we all need to just agree that while there is a general range of numbers related to revenue and expenses, we just don't actually know what those numbers are and relax the angst toward the Pohlads because it is not something to stress about. The team is fine.

Baseball is fun to watch. I'm going to watch some high school, college, minor league, and town ball games again this year in addition to feeding my sorry addiction to the Twins. I hope to see good baseball games.

On a side note, it was sort of funny when Carlos Correa said that the money concerns were above his pay grade. I wondered if that was just a canned response or tongue in cheek. 

12 minutes ago, tony&rodney said:

On a side note, it was sort of funny when Carlos Correa said that the money concerns were above his pay grade. I wondered if that was just a canned response or tongue in cheek. 

I noticed that too... Clichés are fun... That decision is well below his pay grade, but well above his job title. 

On 2/23/2024 at 3:26 PM, jharaldson said:

Thanks for responding!  I appreciate that there are different measurements for an audience and that they can fluctuate.  If we look at the 2 you described above we can see that regardless of the difference in size, they are still about the same ratio to each other: 

The MSA of Atlanta 6,104,803 - Twin Cities 3,690,512 - MSP/ATL = 60.4% 

The CSA of Atlanta is 6,930,4323 - Twin Cities 4,080,232 = 58.9%

When I used them in my stats I stated that the Twins could only make 60% of the non-broadcast revenue, which is a small round down from the MSA and a small round up from the CSA.  I would argue that for the purpose of a high level discussion like this that CSA vs. MSA vs. Etc.... is a distinction without a difference.

I don't disagree that folks outside the metro make up a good part of Twins Territory.  The question is how much?  If we look at the Braves statement again we can see that it is broken up into multiple revenue sources:

Baseball Events - $324M - These events are going to be financed in large by local Metro companies purchasing suites and local families purchasing season tickets.  Individual game sales and visits by folks outside the MSA and CSA would be measurable but would not make up a significant amount of this money.

Broadcasting - $139M - This is going to be based on the equal share of national money that is pulled out and a variance in local broadcasting.  My understanding is that the Twins are going to make $40M while the Braves make $68M, which puts the Twins at 58.8% of comparable revenue and in line with my 60% assumption.

Retail and Licensing - $45M - This may have an outsized influence from outside the MSA but this is also the smallest source.  Looking at estimates if the Twins are between 30-60% of Braves revenue in this area it only changes the overall number by $13M total. 

The short of this is I agree with your final statement, despite whatever gymnastics I am doing here I don't know the real numbers.   What I disagree with is that despite this fact, my numbers aren't accurate enough to support my article title of whatever happened to the 50% rule.  They are good enough for that and they are supported by the fact that Dave St. Peter backpedaled into the bushes like Homer Simpson when asked about this by Aaron Gleeman in the context of a $140M payroll at the time.

So based on MSA data... You have Minneapolis at 60% of Atlanta and that forms the basis of your narrative. 

OK... Keep going. Do the same with all of the markets if you'd like. How does Atlanta compare to New York. Are the Yankees spending up to par in comparison to the Braves using your MSA formula? Maybe the Yankees are the real cheap skates. Maybe the Brewers are the big spenders? 

Based on MSA... Why would the A's leave the 13th largest market for the 29th if you can simply assess Twins revenue based upon MSA Data comparison between markets? The same comparison would have to apply between San Francisco/Oakland and Vegas. 

Come to think of it... Why is the San Francisco/Oakland market only 13th!?!.

Why does the San Francisco market go from 4 million to 9 million shooting up to 5th largest if you use the CSA?

What about San Jose? San Jose isn't part of the arbitrary lines drawn to determine MSA but they are included within the arbitrary lines to determine CSA? Why Did the Giants Care if the A's landed in San Jose?  

Whose going to care if the A's land in Las Vegas.

Why are blackouts rampant in Iowa?  

How do the Brewers do it if they are a lowly 40th ranked MSA barely bigger than Louisville. 

I appreciate the tone of the discussion and it's great to have discussions but... all I can say is. 

I tried

I can only advise you to not use MSA data to draw your conclusions. It is your decision weather you will take that advice. 

On 2/22/2024 at 9:51 AM, tony&rodney said:

FWIW, it seems like there may have been some double counting. The revenue pile is 48% of each team's monies is collected and then distributed to all 30 organizations. This means that one can only add 52% of whatever revenue the Twins created to that number.

Factually, we don't know all of the numbers and frankly it seems like a futile task that ends in disagreement.

 

I agree on the knowledge of the numbers after all the complexities of shared revenues. It seems the accounting for T.V. number is actually 52% of $45 or so, million and not the whole thing - big difference. Not going to dive into details here since, as you say, it’s somewhat futile.

However, there’s what is assumed to be a couple things that should help make an argument (support one) that 2024 payroll should be higher.

#1 - Revenues across MLB are increasing annually at some rate

#2 - Payroll history for Twins …2019-$119M spent…..2020-Covid spending……….2021-$125M spent ………2022-$134M spent …….2023-$154M spent

With the uncertainties with T.V. $$ I could get behind moving back to $140-$145M range……very justifiable, but a 21% reduction from last year & a 9% reduction from 2022 doesn’t seem to make sense.

It just doesn’t seem plausible that 2024 economics for the organization are forcing a regression in Payroll to that of under 2021’s total.

21 hours ago, clone52 said:

Has anyone ever thought that they might just be wanting to have mid season flexibility?

The team doesn't have a ton of holes.  Another SP is one of them, but it is likely that the Twins win the central division with the options they have now, so an immediate pickup is not critical.  Lopez is a solid #1.  Ober matches up with #2 of other contenders.  Joe Ryan needs to get more consistency.  Paddack is an injury risk (who could probably be replaced by a midseason trade if he gets hurt).  When you look at Varland, Woods-Richardson, Canterino and Festa, they've got 4 young guys that may be able to step up to that #5 role.  If it becomes a problem over the first couple months of the season, they have the prospect depth to trade for an upgrade, who would likely be cheaper or shorter term deal than Montgomery or Snell.

RH outfield depth is the other need.  This was never going to be a big signing.  Maybe the pick up Taylor again, or fill this with young guys in the system stepping up.  Again, if its a big problem, a mid-season trade wouldn't be crazy.  If the Angels don't contend, Aaron Hicks would be available.

The Twins have a lot of good young guys and up and comers.  The salary increases for next season are big.  A reasonable 2024 plan is to stand pat, not lock up even more payroll on long term contracts, see how the young guys step up and if needed, use your prospect depth to make in season tweaks.

I like the up & coming player options! There’s an array of possibilities and hopefully team only needs one or two starter arms & one or two position guys through the year.

The mid-season trade market is not a very real/good option. It’s tough to get anyone better than what you have and trade partners want a ransom for the guy you want. Just difficult to execute.

Truly, we’ll never know what percentage of revenue is going to payroll, as the Twins (and every other MLB teams) are unwilling to transparently open their books. We’re just guessing. 

On 2/22/2024 at 8:13 PM, tony&rodney said:

I remember that. I actually also remember my reaction, which was to say, "Shenanigans with words."

DSP is (he is unknown to me in any other way) very unfamiliar or just plain clumsy with the English language.

Quote

There is no other way to look at this other than a broken promise made to taxpayers and a money grab by some Nepo-babies.

good post, @jharaldson 

I look at this not as a broken promise, but as a signal, from Pohlad to the front office, that their time is up. I see this through the lens of the Correa signing(s). I have no insider knowledge, but I am guessing that the quarter of a Billion with a B dollars they will be transferring to Correa over his stay here is not sitting well, nor should it. Fans who loved the Correa signing have very little standing to complain about no money being spent this offseason-- plenty was spent in 2022 and 2023 and plenty of prospect value went out the door with it. Maybe I'm wrong. Maybe the Twins fail to advance to the ALCS in 2024 and Pohlad will keep them around anyway. Time will tell.