Don't expect increase in payroll

[Shane Wahl]

I've posted this before, and continue to believe it: the Twins did not, are not and will not put a penny of their own money into Target Field. They borrowed the money, and are paying that off from TF revenues...using the old "other people's money" real estate ploy.

 

That's where the extra money is going. They are taking their yearly profit, AND paying off their note. Probably on a loan they made from banks they own, so they are making money in interest on that as well.

 

They end up with a new stadium, at zero out of pocket cost.

Yep. Billionaires make the people pay. This is true of everything. And no one does anything about it.

[diehardtwinsfan]

They are going to have a tough time selling tickets because the year prior they were bad in part because they had payroll at 35%.

 

If payroll was at 50% this year, they would have had another $30M in payroll and happier fans.

I think this right here is the rub for me. Higher payroll doesn't cause more wins. The Twins went out and spent 48M on Nolasco, 24M on Hughes, and 12M on Pelfrey. The first two were pretty much universally lauded on these boards. Which one was better? They also already had money tied up in KC and Hammer that they weren't just going to burn. They got rid of KC and Hammer, and the team improved. They spent big money on Morales, and that got them nothing. They got rid of him and called up Vargas, and the team improved.

 

It's easy to look back an the FA market in hindsight and say 'you should have signed player X', but the reality is that with the exception of the top tier FAs, most of the others carry with them a pretty significant chunk of risk tied to that cash.

[Riverbrian]

I think this right here is the rub for me. Higher payroll doesn't cause more wins. The Twins went out and spent 48M on Nolasco, 24M on Hughes, and 12M on Pelfrey. The first two were pretty much universally lauded on these boards. Which one was better? They also already had money tied up in KC and Hammer that they weren't just going to burn. They got rid of KC and Hammer, and the team improved. They spent big money on Morales, and that got them nothing. They got rid of him and called up Vargas, and the team improved.It's easy to look back an the FA market in hindsight and say 'you should have signed player X', but the reality is that with the exception of the top tier FAs, most of the others carry with them a pretty significant chunk of risk tied to that cash.

I agree 100 percent. I continue to be not concerned with the payroll number. I don't think it should ever be that systematic to say 30%... 52% or 110%.

 

To me it continues to be about the play on the field. Whatever number is attached to that... is attached to that.

[USAFChief]

I agree 100 percent. I continue to be not concerned with the payroll number. I don't think it should ever be that systematic to say 30%... 52% or 110%.

To me it continues to be about the play on the field. Whatever number is attached to that... is attached to that.

It is at least theoretically possible that the number has an effect on the play on the field, though, no?

[TheLeviathan]

We fundamentally won't ever see eye-to-eye on how to use quotes and the limited information available to us on the internet.  We've mutually established that in the past.

 

Do I think revenue estimates can be accurate within the 10's of millions?  Sure, but that leaves a lot of room for error and interpretation.  Compound that with the fact that we don't and won't ever know how the Twins adjust that number -- budgetary periods, revenue sharing, variations in amateur acquisition costs, etc, etc, etc -- and I fail to see where this fan analysis can give us an accurate number.

The problem is that the Twins have had opportunities (2011 comes to mind) to answer the concerns themselves. The reality is that regardless of all the conditions and adjustments you want to play devils advocate with, the Twins have never soundly declared through their actions that they have pushed payroll at or above that number. They have stayed disproportionality lower in payroll even as their revenues have increased substantially.

[Riverbrian]

It is at least theoretically possible that the number has an effect on the play on the field, though, no?

Sometimes... But I've been plenty pissed off at high dollar players... sometimes. Keep in mind tho... I'm crazy... I think you can win with Ben Revere.

[drjim]

I view payroll as a "big picture" item.

 

I would too only if it limits the ability to add or retain talent. I don't think they have hit that point yet.

 

I like "context specific".

[jokin]

I think this right here is the rub for me. Higher payroll doesn't cause more wins. The Twins went out and spent 48M on Nolasco, 24M on Hughes, and 12M on Pelfrey. The first two were pretty much universally lauded on these boards. Which one was better? They also already had money tied up in KC and Hammer that they weren't just going to burn. They got rid of KC and Hammer, and the team improved. They spent big money on Morales, and that got them nothing. They got rid of him and called up Vargas, and the team improved.

 

It's easy to look back an the FA market in hindsight and say 'you should have signed player X', but the reality is that with the exception of the top tier FAs, most of the others carry with them a pretty significant chunk of risk tied to that cash.

 

Actually, the top tier FAs carry a pretty significant chunk of risk, as well  (Pujols, Tanaka, Zito, etc.)

[jokin]

I agree 100 percent. I continue to be not concerned with the payroll number. I don't think it should ever be that systematic to say 30%... 52% or 110%.

 

To me it continues to be about the play on the field. Whatever number is attached to that... is attached to that.

 

Quoting that 50% figure sure seems concerning enough to Twins management/ownership for Dave St Peter to dredge it up, yet again on Monday.  They must see a link, or then, Why say it?

[tobi0040]

I think this right here is the rub for me. Higher payroll doesn't cause more wins. The Twins went out and spent 48M on Nolasco, 24M on Hughes, and 12M on Pelfrey. The first two were pretty much universally lauded on these boards. Which one was better? They also already had money tied up in KC and Hammer that they weren't just going to burn. They got rid of KC and Hammer, and the team improved. They spent big money on Morales, and that got them nothing. They got rid of him and called up Vargas, and the team improved.It's easy to look back an the FA market in hindsight and say 'you should have signed player X', but the reality is that with the exception of the top tier FAs, most of the others carry with them a pretty significant chunk of risk tied to that cash.

No absolutes but a correlation does exist between payroll and wins. An example here or there does not make the reality false. Had we signed four nolasco's last year (30 additional million) all four would not have failed. Two or three would have resembled the 4.30 era guy we thought we were getting and we would have won more games

[Riverbrian]

Quoting that 50% figure sure seems concerning enough to Twins management/ownership for Dave St Peter to dredge it up, yet again on Monday.  They must see a link, or then, Why say it?

Dave St. Peter may feel differently then I do... And let me just say.

 

That is all on him.

[DocBauer]

From a preseason 2010 article - "Pohlad said Target Field revenues should allow the Twins' payroll to remain in the $95 million range beyond this season."

 

95 million or 52%, take your pick. The Twins dug this hole for themselves by making predictions sound as much like promises as they possibly could without technically obligating themselves, and then making those predictions not become reality.

 

And now they've kicked off the run-up to the 2015 season by saying they'll probably keep trying to get out of the hole by continuing to dig.  It's confusing to me that you don't see this as cause for consternation, or at least disappointment.

Honestly, after my initial post way back at the begining, I was going to stay out of this one. But this caught my eye. "Pohlad said Target Field revenues should allow the Twins payroll to remain in the $95 million range beyond this season"...........and what? Forever? For 2011? Long enough to keep what was a winning team in tact? No matter what, even if it meant tossing money to mid and lower tier FA or aging veterans on the decline just to keep the payroll at that amount?

 

Look, all I'm saying is some perspective needs to be kept. I'm not on any side in this arguement even though I have a horse in the race. NOBODY saw the Twins spending what they did last season. And do I have to say again, they TRIED to spend more but were rebuffed at a couple of the turns they tried. Then they signed Morales, spending more money, in an attempt to improve the club. Do I think all the money was spent wisely? No. Are there a couple moves that could have been made, or at least attempted, that even I could have attempted if out in charge for a few days? Well.......maybe.

 

Do I think you can just buy a winning team? No. Can you spend more, and spend wisely? Yes. Do I want the Twins to spend more now for improvement? Again, yes. I don't think the $60M I've seen tossed around is accurate. My review of the finances for next season seem higher. But regardless, there is room to spend even if the payroll didn't increase. And St. Peter's comment is a pretty off the cuff remark if you ask me, and not worth the vitriol. We have a long way to go people.

[Rosterman]

In any business, you budget. You know what you can spend in certain areas. You try and predict revenues. You have to cut costs if you are losing money. Especially if you are a profit business, you can carryover (i.e. sign players) to the next season and beyond.

 

Baseball is a strange business. Owners will cry that they don't make money some years, yet the price of a franchise always seems to go up. Why? Because it is a closed club. You have to pay big dollars to get in, there are a limited number of opportunities to join, and if you don't love where you are you can always petition (and probably) go elsewhere, thus causing the value of your business to keep increasing.

 

It is also a gamble business. You may spend $100 million on payroll, and the players give you $60 million of production because of injuries, age, all-around-badness. That is the gamble you take. Some teams, like the Yankees, can afford to have $100 million sit on the disabled list, and they are still competitive, because their non-disabled payroll is still larger than any other team in the business.

 

You take a chance when you sign players. The Twins seem to feel that they know and play it safe with their signings...they don't want to be burned if it turns out badly (the Japanese guy is an exception, Nolasco also looks like something scary in their minds). Yet, it shouldn't stop you from pursuing other international signings for big bucks, or above-average free agent signings. You learn and go forward and hope hope hope that your future expenditures will pay off AND that you can still get something, anything for your current investments.

 

If, say, the Twins had spent $100 million this season, got that better bat than the Kubel/Barrett reruns, or talked another pitcher like Garza into coming on board, and the current meltdowns of Pelfrey, Nolasco, Mauer and Willingham happened, they would still be putting a darn good product on the field. I applaud that they did spend, rather than trade, for product this year. 2/3s failed, sadly, but it shouldn't stop you from taking another and another chance.

 

They did manage to flip Willingham and Morales for players. They managed to get cash for Correia. Unlike the year's that they had Kubel and Cuddyer and Nathan walk.

 

But then they also turn around and don't bring up Meyer. They leave another starter candidate (longshot) in September limbo (Kris Johnson) and have nothing for the 5th spot. They have a looksee guy in the minors like Debinson Romero who could get some shots at third base and they don't get rid of Florimon early and add him, where he can at least shine in 4-5 games when Plouffe goes under. I applaud giving a Bernier a shot. Giving Fryer some shots. But making Burton the closer when he is a free agent? Let's see Achter in that spot. Or Oliveros.

 

But back to payroll. You have a lousey year, you spend less the next. No. You spend more, you evaluate better, you roll some heads (especially after four seasons). You make some statements. You have a product that if you win, people will come and spend. Sometimes, you have to, too. And don't tell me you can't, won't, don't have to.

[jay]

Would it be fair to say, based on examples like Detroit, that some teams in similar situations chose to put payroll concerns at a lower priority?

 

Definitely.  The unfortunate part there is that neither you, nor I, will be a Tigers fan anytime soon.  Not to feed the fury, but their owner paid for 60%+ of Comerica when it was built.

 

Their franchise is clearly in the significant minority of finance ignorance.

[Otto von Ballpark]

I think payroll is a big picture item. I also think it's a context specific item. There's a time to bump it up, and there's a time where it makes little sense. The danger as I see it is that when it becomes a mandate, you see real large contracts given to guys who have no business getting them.

Agreed, but we're not talking about a one-year window/mandate here.  TR didn't have to add a big contract in any particular year of 2012, 2013, or 2014 -- but within that 3 year window, given the resources available, he should have been allowed (and perhaps requested) to spend aggressively for the best talent he could find, when he found it.  Lump 2015 into that group if you like.

 

And if payroll/resources aren't the problem, and TR simply can't identify/sign a top FA talent over 4 offseasons, or the best he can come up with is Ricky Nolasco... maybe he needs help?  Maybe he shouldn't be self-accountable GM for life?

[jay]

It is at least theoretically possible that the number has an effect on the play on the field, though, no?

 

More so in the past: http://www.hardballtimes.com/money-and-wins/

 

Less so in the more recent past: http://www.providencejournal.com/sports/red-sox/content/20140825-money-can-t-buy-success-for-mlb-teams-anymore.ece

http://hardballtalk.nbcsports.com/2014/08/26/these-days-the-correlation-between-payroll-and-winning-is-historically-weak/

[tobi0040]

More so in the past: http://www.hardballtimes.com/money-and-wins/

 

Less so in the more recent past: http://www.providencejournal.com/sports/red-sox/content/20140825-money-can-t-buy-success-for-mlb-teams-anymore.ece

http://hardballtalk.nbcsports.com/2014/08/26/these-days-the-correlation-between-payroll-and-winning-is-historically-weak/

It would appear a strong correlation exists this year.

 

Dodgers (1)

Tigers (5)

Angels (6)

Giants (7). Up 8 to 0

Nats (9)

Cards (13)

Orioles (15)

Royals (19)

 

 

http://deadspin.com/2014-payrolls-and-salaries-for-every-mlb-team-1551868969

[tobi0040]

Definitely. The unfortunate part there is that neither you, nor I, will be a Tigers fan anytime soon. Not to feed the fury, but their owner paid for 60%+ of Comerica when it was built.

 

Their franchise is clearly in the significant minority of finance ignorance.

They have an owner any city would appreciate. He is old and desperately wants to win and is ok losing money in the process. We know that was not part of carls plan.

[diehardtwinsfan]

Actually, the top tier FAs carry a pretty significant chunk of risk, as well  (Pujols, Tanaka, Zito, etc.)

I guess I cannot really argue with that. At least with them, you get a few good years out of them. But yeah, the Angels are already regretting the Pujols contract, and he's going to play into his 40s.

[diehardtwinsfan]

It would appear a strong correlation exists this year.

 

Dodgers (1)

Tigers (5)

Angels (6)

Giants (7). Up 8 to 0

Nats (9)

Cards (13)

Orioles (15)

Royals (19)

 

 

 

http://deadspin.com/2014-payrolls-and-salaries-for-every-mlb-team-1551868969

You left off the Pirates (27) and the As (25). Without those two, the average payroll of the playoff teams relative to the league is between 9 and 10. With those two, it's closer to 13. That's not a strong correlation.

[jay]

It would appear a strong correlation exists this year.

 

Dodgers (1)

Tigers (5)

Angels (6)

Giants (7). Up 8 to 0

Nats (9)

Cards (13)

Orioles (15)

Royals (19)

 

 

http://deadspin.com/2014-payrolls-and-salaries-for-every-mlb-team-1551868969

 

It would appear some teams that didn't support your point were left off the list of playoff teams.  

 

The original question was whether or not payroll could influence the product on the field.  Obviously, yes, to some extent.  However, as the research in the linked articles and the full list of playoffs teams from this year shows... it's not nearly as big of an influence as many fans make it out to be.

[Paul Pleiss]

SHOW ME THE MONEY! SHOW ME THE MONEY!

[DJL44]

The Twins have managed to shed revenues fast enough to go from paying into the competitive balance fund when Target Field opened to receiving a draft pick this time around. I think that's more them standing still and everyone else continuing to grow.

[drjim]

The Twins have managed to shed revenues fast enough to go from paying into the competitive balance fund when Target Field opened to receiving a draft pick this time around. I think that's more them standing still and everyone else continuing to grow.

Probably also means that revenue generated from stadiums is becoming a smaller percentage of a team's revenue every year.

 

Not a good trend for the Twins considering they will always have one of the smaller TV deals.

[tobi0040]

It would appear some teams that didn't support your point were left off the list of playoff teams.  

 

The original question was whether or not payroll could influence the product on the field.  Obviously, yes, to some extent.  However, as the research in the linked articles and the full list of playoffs teams from this year shows... it's not nearly as big of an influence as many fans make it out to be.

 

I view the one game is a play in game, with the winner advancing to the playoffs.  The two teams being talked about lost the play in game.  I also don't think throwing in two teams in the 25-30 range and then saying the average is about 15, therefore no correlation exists is not the proper way to evaluate.  The median tells the story, even with those two.  8 of the 10 teams are top 15.  That is a correlation.  5 or whatever are top 9.

 

The Twins made the playoffs several times, only to be out-gunned in round one over and over.  So if you look at who is actually winning it is more convincing.

 

You have to go back to 2003 to find a world series champ that was not in the top 15 payrolls. In additon, salaries are lagging to an extent.  Teams that win see payroll go up or have to get rid of guys.  The Phillies and Giants for example saw payroll go up after their titltes. The Marlins had to dismantle. Others saw a combination.

 

13 - Sox (4)

12 - Giants (8)

11 - Cards (11)

10- Giants (10)

09 - Yanks (1)

08 - Phillies (12)

07 - Sox (2)

06 - Cards (10)

05  W Sox (13)

04 - Sox (2)

03 - Marlins (26)

[Mike Sixel]

The argument that they didn't get better with the FA acquisitions is a bit off.....they may not have won more than last year, but would they have won as many as they did w/o Suzuki, Hughes, and even Nolasco?

 

Take out Hughes, put in ??? Take out Nolasco, put in ????.....are people arguing they would have won even this many games w/o them?

 

Are people really arguing that adding good players through FA, and keeping your good players around, does NOT increase the odds of winning more games?

[jay]

I view the one game is a play in game, with the winner advancing to the playoffs.  The two teams being talked about lost the play in game.  I also don't think throwing in two teams in the 25-30 range and then saying the average is about 15, therefore no correlation exists is not the proper way to evaluate.  The median tells the story, even with those two.  8 of the 10 teams are top 15.  That is a correlation.  5 or whatever are top 9.

 

You're arguing against something that hasn't been said.  No one said there is NO correlation.  The facts show the correlation isn't all that strong.

[Mike Sixel]

From a Freakonomics article:

 

USA Today reports team payrolls from 1988 to 2012 – across these 25 years, a team’s relative payroll (team payroll in a given year divided by the league average payroll in that season) does have a statistically significant relationship with a team winning percentage.  So across all the years for which data exists, payroll and wins are statistically related.
We should note, though, that explanatory power is somewhat low.  Only about 17 percent of the variation in team winning percentage (i.e. the R2 from the equation) across the past 25 years is explained by a team’s spending on talent.  So much of the variation (specifically, more than 80 percent) in winning percentage is not explained by payroll.
That being said, there is a statistical relationship.  More spending seems to get you something.

 

http://freakonomics.com/2012/10/11/money-didn%E2%80%99t-buy-happiness-in-baseball-in-2012/

[jay]

The argument that they didn't get better with the FA acquisitions is a bit off.....they may not have won more than last year, but would they have won as many as they did w/o Suzuki, Hughes, and even Nolasco?

 

Take out Hughes, put in ??? Take out Nolasco, put in ????.....are people arguing they would have won even this many games w/o them?

 

Are people really arguing that adding good players through FA, and keeping your good players around, does NOT increase the odds of winning more games?

 

My reading comprehension skills could be declining, but I haven't seen a single one of those arguments made. 

 

I've tried to make a few points here, which I'll recap, and then be done with this one:

1 - A fan-determined expectation of the payroll level for any given season based off a quote and revenue projections is extremely flawed.

2 - Payroll can influence your odds of success, but it isn't nearly as big of a factor as many fans portray it to be.  Your freakonomics article nails it.  17% percent...

[Mike Sixel]

I'd take a 17% improvement in the club right now (and I know that's not what the number means.....). quoting the 17% is also kind of bunk, in the last 10 years of that study, the number was over 20% 5 times........

 

Post 122 said that they didn't win more games this year than last year, even with the signings. The implication was that they "were the same", when I'd argue that not having Hughes, Suzuki, and even Nolasco, they win less games than they did. There are plenty of posts here arguing there is "no" correlation between wins and payroll, when that is not true.

 

A slightly different take on 2012 from Fangraphs:

 

If you spend less than the league average, even in the year when there was "no correlation"....resulted in this: http://www.fangraphs.com/blogs/2012-payrolls-and-wins/

 

Top 10: $140 million, .525 Win%
Middle 10: $88 million, .511 Win%
Bottom 10: $66 million, .464 Win%

 

Rather than look at one team, look at tiers of teams.....that 17% exists largely because salaries are constrained by the FA rules. Teams that draft well and don't spend much can win.....but even they would be better if they spent more.