Don't expect increase in payroll

[DJL44]

The Twins have managed to shift income from radio off the books by underselling their rights to a station owned by the same people. Who knows how many other ways they're using accounting shifts.

[tobi0040]

I'm not sure.  I do know those Forbes numbers consistently aligns closer to the Twins' continued statements than your method.  It further emphasizes my point that we don't actually know how they calculate it.  Do you know which figure the Twins use when they talk about 50-52%? 

 

In ten minutes of looking, I have only found TR and DSP talking of 50-52% of payroll and payroll numbers that do not align wih the player expenses numbers that Forbes. Rather, the lower MLB payroll figure.  Example, $100M in 2012 versus the Forbes $122M

[jay]

All the money they have went around bragging they have spent, has resulted in payroll to decline from $110M to in the $80's.  

 

What if $110M was 55%?  What if it was 60%?  The quotes can support that position.  Now you're holding them to a higher standard than they've stated.  If it's a crediblity issue and you don't believe those quotes, then why even believe the 50-52% quote at all?

 

 

 

Last off-season they went around saying they spent $85M. That was on 2 3, and 4 year deas to three different starting pitchers. Paying a pitching $6M, $8M, and $11M a year for starting pitchers on the free agent market is not really a huge spend.

 

The rare, elite talent and how much those few players cost skew the perception.  Nolasco's contract value was in the top 10 and his AAV was in the top 15.  Hughes' contract and AAV were both in the top 25.  That's not insignificant.  If you don't like how the Twins are spending the FA dollars, that's different... but a whole 'nother debate. 

[Mike Sixel]

Maybe the Twins never expected to increase payroll relative to everyone else, but knew that payrolls would go up for everyone. I had not really considered that until today somehow. Maybe all along they planned to be in the lower third of payroll, but knew they needed more revenue even then. Maybe they never expected to be in the middle of payroll numbers.

[jay]

In ten minutes of looking, I have only found TR and DSP talking of 50-52% of payroll and payroll numbers that do not align wih the player expenses numbers that Forbes. Rather, the lower MLB payroll figure.  Example, $100M in 2012 versus the Forbes $122M

 

I can't find anything conclusive either.  The Forbes number says it includes bonuses and benefits.  That'd probably be draft and int'l, but not sure. 

 

DSP and TR's quotes say "payroll" from what I can find.  Who is to say they don't include bonuses and benefits in their calculation?  Why wouldn't they?  I can't find quotes by them that specifically says MLB contract salary = Twins' payroll calculation.

[tobi0040]

I can't find anything conclusive either.  The Forbes number says it includes bonuses and benefits.  That'd probably be draft and int'l, but not sure. 

 

DSP and TR's quotes say "payroll" from what I can find.  Who is to say they don't include bonuses and benefits in their calculation?  Why wouldn't they?  I can't find quotes by them that specifically says MLB contract salary = Twins' payroll calculation.

 

Given the $20M gap, we have to concude this includes the draft and international pools.  No way the benefits to the MLB players are $20M.  Especially given the final published payroll numbers include player earned bonuses.

[tobi0040]

What if $110M was 55%?  What if it was 60%?  The quotes can support that position.  Now you're holding them to a higher standard than they've stated.  If it's a crediblity issue and you don't believe those quotes, then why even believe the 50-52% quote at all?

 

 

 

 

The rare, elite talent and how much those few players cost skew the perception.  Nolasco's contract value was in the top 10 and his AAV was in the top 15.  Hughes' contract and AAV were both in the top 25.  That's not insignificant.  If you don't like how the Twins are spending the FA dollars, that's different... but a whole 'nother debate. 

 

When payroll goes from $110M, to $100M, to $75M, then back up to $85M.....why brag about how much you have spent?

 

In 2011 we let a LF leave that was making $10.5M. Then signed a replacement (Josh) for $7M and bragged that we made the largest free agent signing in our history.

 

This type of thing is extremely misleading.   The Twins do this type of thing all the time and yes, it leads to credibility issues with fans.

 

What if a money manager bought a stock for $50 per share. Then it drops to $30, then goes up to $35.  Can that money manager tell his investors he made them money?

[jay]

Given the $20M gap, we have to concude this includes the draft and international pools.  No way the benefits to the MLB players are $20M.  Especially given the final published payroll numbers include player earned bonuses.

 

Wouldn't you also conclude the Twins account for those pools in their accounting?  There can be big variation there and I can't imagine they just ignore it.

 

 

When payroll goes from $110M, to $100M, to $75M, then back up to $85M.....why brag about how much you have spent?

 

It is extremely misleading.   The Twins do this type of thing all the time and yes, it leads to credibility issues with fans.

 

What if a money manager bought a stock for $50 per share. Then it drops to $30, then goes up to $35.  Can that money manager tell his investors he made them money?

 

I didn't agree with your method of calculating an expected payroll level, but I'm not looking to defend the Twins from your perceptions. 

 

Your hypothetical question assumes the money manager told his investors that $50/share was a great value and it would continue to go up from there.  As much as we all might have wanted that to be true, I don't recall the Twins saying that. 

[tobi0040]

Wouldn't you also conclude the Twins account for those pools in their accounting?  There can be big variation there and I can't imagine they just ignore it.

 

 

 

I didn't agree with your method of calculating an expected payroll level, but I'm not looking to defend the Twins from your perceptions. 

 

Your hypothetical question assumes the money manager told his investors that $50/share was a great value and it would continue to go up from there.  As much as we all might have wanted that to be true, I don't recall the Twins saying that. 

 

You mean a comment like this from 2011?

 

"Pohlad said Target Field revenues should allow the Twins' payroll to remain in the $95 million range beyond this season."

 

So we get a nice flashy payroll in year one. The owner says it will remain in that range.  It goes to $75M.  Then he brags when it goes up to $85M. 

 

I don't think my perception is that this is misleading. It just is.

[Kwak]

I remember a newspaper article that was about the reduction of "short-term debt" using profit from operations.  I can't provide a link.

[jay]

Your question didn't say $95M, it referred to $110M. 

 

I think they had the ability to be at $95M this year.  The Twins seemed to convey they had payroll room at the start of the year.  Without trading away Morales, Willingham and Correia, which most everyone agrees was the right move, MLB payroll would have landed right at $95M.  I'm not seeing misleading, but to each their own.

[jay]

I can see how a payroll at $110M may have provided false hope.  It did for me as well.  I recall building my 'offseason plan' back then based off that number. 

 

I wouldn't characterize it as misleading though.  It actually makes more and more sense to me in hindsight.  None of the Twins' statements said they would continue to increase it from there.  Your quote clearly indicates they wouldn't.

[tobi0040]

Your question didn't say $95M, it referred to $110M. 

 

I think they had the ability to be at $95M this year.  The Twins seemed to convey they had payroll room at the start of the year.  Without trading away Morales, Willingham and Correia, which most everyone agrees was the right move, MLB payroll would have landed right at $95M.  I'm not seeing misleading, but to each their own.

 

We started at $85M.  Morales was a flip from day one.  He was never going to be paid $10M by the Twins.  We were hoping he would catch fire and be worth something.

 

Last year it was $20M less.

 

Starting from $110 or $95 doesn't matter.  Going down to $75, then up to $85 is not anything to brag about.

[Mike Sixel]

I LOVED that they signed a guy that they hoped would either help them win, or be flipped. It was a great risk to take with money that would otherwise not be spent.

[tobi0040]

I LOVED that they signed a guy that they hoped would either help them win, or be flipped. It was a great risk to take with money that would otherwise not be spent.

 

I liked the move too.  But we were 2 games below .500 fueled by un-sustainable runs by guys like Colabello, Escobar, and Santana (yes he tailed off from June 8). Our rotation was in shambles.

 

Terry knew it was a 10% shot he was paid $10M.  In fact he only was here 39 games.

[jay]

tobi... if you just want to be mad about the payroll, be mad.  The Twins have sucked for four years now.  Plenty of reasons to be mad. 

 

Whatever disclaimers you want to put on it, but the payroll would have ended at $95M this year if they hadn't swooned.  Exactly in line with the quote you provided.

[SwainZag]

You mean a comment like this from 2011?

 

"Pohlad said Target Field revenues should allow the Twins' payroll to remain in the $95 million range beyond this season."

 

So we get a nice flashy payroll in year one. The owner says it will remain in that range.  It goes to $75M.  Then he brags when it goes up to $85M. 

 

I don't think my perception is that this is misleading. It just is.

 

I'm sure Pohlad also didn't expect everyone to be injured in 2011 essentially forcing a rebuild.

 

I do not understand this outrage so many people have over an arbitrary payroll number.  If the team isn't good, an extra 10M in payroll isn't magically going to turn it around and produce 20 more wins.  

[tobi0040]

tobi... if you just want to be mad about the payroll, be mad.  The Twins have sucked for four years now.  Plenty of reasons to be mad. 

 

Whatever disclaimers you want to put on it, but the payroll would have ended at $95M this year if they hadn't swooned.  Exactly in line with the quote you provided.

 

"if they hadn't swooned".  We were two games below .500, I am guessing 6-10 games out of first place.  Payroll would only have ended at $95M if we made a serious run and even Terry had to know with a sudden turn to form by Morales in the middle of the season, our rotation, regression from guys like Escobar, Colabello, etc. that was very unlikely.  It is not like we had a huge lead and lost it.

[USAFChief]

I'm sure Pohlad also didn't expect everyone to be injured in 2011 essentially forcing a rebuild.

 

I do not understand this outrage so many people have over an arbitrary payroll number.  If the team isn't good, an extra 10M in payroll isn't magically going to turn it around and produce 20 more wins.

 

If injuries were all that caused 2011, shouldn't they have been good in 2012?

 

And if payroll isn't part of putting a winner on the field, then would you be OK with everyone making the minimum, and a $12.5m payroll? If you don't believe money matters, then that's the logical extension of your argument..."more wont make them better, so less can't make them worse."

[DocBauer]

What do people think the payroll (right, wrong or indifferent) will be next year?

 

Put me down for $80M.

I have two answers/opinions on this question. And it depends not only who will ultimately be made available on the market, but also how the Twins approach the current rebuild. Do you identify a pair of players to jump start the rebuild more quickly and lay out the cash and reasonable yearly terms? Or do you believe strongly as to who might be climbing the ladder quickly enough that you don't want to block progression?

 

The Twins entered 2014 with a reported payroll of $85,776,500M. They added to that with Morales for somewhere around 1/4 of a season at least. That would have to put the payroll payout somewhere in the $88M range, at least, though you did save a little of Willingham's and Correia's salary with late trades, though not much. If you go down the list and cross off the obvious scratches, you end up with a committed payroll of just shy of $66,000,000 if Deunsing is brought back. A raise to Suzuki and a few other "avoid arbitration" raises and you add roughly $5-6M to that total. So $88M minus $72M, roughly, you could add an additional $16M in additional payroll to the team without raising 2015 payroll above the 2014 expenditures.

 

Option #1: You sign a quality SP for the rotation, maybe not one of the proposed #1's on the market, but perhaps Ervin Santana, who the Twins have been tied to before, for 3-4 years at around $14-16M. Next, you bring in that one quality veteran OF to deepen the lineup, and he'll settle the OF situation. This could be Rasmus as a CF/LF option, or a Cabrerra or Markakis as example for around $8-10M per. This puts you around $94-98M. I think the Twins could very easily afford this as they've been there before, recently, and even been higher.

 

Option #2: The Twins really believe in Meyer, Berrios and a few other pitching options, and feel there are other ready or close OF options and don't want to block them or commit big money and years to other players in the interim. The Twins then sign a stop gap OF on a "make-good" or "last contract/season" deal for $5-7M. Then they look for another SP option, NOT a KC or Pelfrey, but another Hughes, or similar make good contract on a high upside arm. Think Scott Kazmir, who I advocated each of the past couple of years. That could be anywhere from $5-8M. Total, this option is about $15M or so, keeps the 2015 payroll the same, could still offer a nice boost, but doesn't tie up dollars and years as much to block prospects, or limit 2016 moves, including a possible re-sign of Hughes.

 

Both options make sense and could be worthwhile.

[drjim]

My take is different than most--the plan was to put a decent team on the field, sell TF with all of the pretty limestone, outdoor baseball, Joe Mauer and "Yah never know!".  The people would come streaming in, emptying their wallets dreaming "what if?"  Most did not believe the team was as bankrupt as their marketing pitches until the end of the 2013 season.  Ryan and Gardenhire made many promises to the execs, received a huge (by Twins standards FA budget), and put their heads together to reconstruct the roster.  I'm not sure if they were convinced they had "solved the problem or not" after Spring training but by September (maybe August) I think they knew the answer. 

 

I don't believe the execs are committed to building a championship team, but simply provide sufficient entertainment consistent with a middle-of-the road budget.  The stadium was not built to enrich BB players, but rather the owners.

 

I'll ask an honest question here - if you believe this, how in the world can you invest any time or energy to following this team? It certainly won't change as long as the Pohlads are owners.

[drjim]

For me the problem with 52% is that it basically acts as a cap. I have no problems with being 10% or so below that if we are playing prospects and developing talent. But I also want them to be willing to go 10% or so above that to acquire the final missing piece for a good team (if we ever get back there) but thus far I have never seen anything from the Twins saying that they are willing to carry "savings" forward and they have not done anything that would make me confident that they would ever go that far "above and beyond".

 

How do you know 52 is a cap? How do you know they won't stretch it when the time comes? Are you certain 2011 didn't represent a year that stretched the 52 a little?

[USAFChief]

I'll ask an honest question here - if you believe this, how in the world can you invest any time or energy to following this team? It certainly won't change as long as the Pohlads are owners.

Don't mean to speak for Kwak, but in my case I can no more quit investing time and energy in my Twins fandom than I can stop investing in breathing.

 

Sometimes I wish it weren't thus, but there ya go..."wish in one hand" and all that.

[drjim]

The Twins have managed to shift income from radio off the books by underselling their rights to a station owned by the same people. Who knows how many other ways they're using accounting shifts.

 

Off what books? No one in public sees them anyways.

 

Probably a good proxy is revenue sharing and competitive balance picks, as mlb has a formula for how this is determined. The Twins have shifted from paying into revenue sharing to now receiving revenue sharing and being eligible for competitive balance picks.

 

To see what the realistic payroll is, I would line up all payrolls and put the Twins at the 15-20 range. Obviously below that this year, as the Twins themselves admitted, but it certainly isn't some massive amount, probably around $95-105 mm.

[drjim]

You mean a comment like this from 2011?

 

"Pohlad said Target Field revenues should allow the Twins' payroll to remain in the $95 million range beyond this season."

 

So we get a nice flashy payroll in year one. The owner says it will remain in that range.  It goes to $75M.  Then he brags when it goes up to $85M. 

 

I don't think my perception is that this is misleading. It just is.

 

Actual facts are probably important here - payroll in 2012 started the season over $100 mm, so it was more or less a representative payroll for the first three years of Target Field. It really has only been the last two seasons that it dipped into the $80s, which coincided with an expected (in my mind) decrease as they more fully committed to the rebuild and started playing younger players who were making the minimum. Also the reason that next year will likely be in the $80s as well, the amount of guys making the minimum.

[drjim]

Don't mean to speak for Kwak, but in my case I can no more quit investing time and energy in my Twins fandom than I can stop investing in breathing.

 

Sometimes I wish it weren't thus, but there ya go..."wish in one hand" and all that.

 

And I'm pretty much the same way. So perhaps I'm the fool here, not willing to admit what the owners are doing right in front of my face. I just don't buy it. My take is that it is important for them to be profitable, but that do put the goal of winning a championship at the very least second. They just might engage in that pursuit in a way that people don't agree with.

[howeda7]

This is where we need an aggressive GM, which I fear TR is not. Yes the 'budget' will be ~$85 million. But if needs to go to $95 million to get a James Shields, the Pohlads will not say no. But only if the GM is willing to make his case.

[DocBauer]

Things I know, and think I know.

 

1) If someone has first hand knowledge where they have seen the Twins books, or have enough factual evidence to properly address the Twins total incoming dollars year to year, then they know a heck of a lot more than I do, or ever will. This pertains to the entire 50%-52% paid out for payroll. I don't know that the Twins have ever stated an absolute goal of what to spend year to year, rather, an approximate. And I would think there are a lot of factors that could lead to a yearly payroll. Not only what IS the actual income intake in a given year, but the factor of whether or not to spend simply for the sake of spending.

 

2) Higher payroll DOES NOT do anything to guarantee a World Series, and it doesn't always mean a playoff appearance as well. I've seen it. We all have. It does, however, indicate a better chance for a contending team. At the least, it assures a better chance to keep a team together.

 

3) The Twins never have been, and never will be, even with Target Field and better revenue sharing, have the finances of a NY, an LA, a Chicago, or Boston, or several other high market revenue teams. Just a fact.

 

4) The Twins attempted to sign Garza even after they had already signed both Hughes and Nolasco. With a season begining payroll of just shy of $86M, that means they were prepared and willing to open the season with a payroll of around $97M!

 

5) Reference point #4, then realize that without Garza, and adding a partial season pro rated for Morales, we're still talking a 2014 payroll output in the $89M payroll range. Consider St Peter's comments to be pretty flippant at this point considering the season JUST ENDED and nothing has been concluded yet, and his comment was a pretty arbitrary statement. Further, as I stated in an earlier post, he loosely commented on the payroll not dipping much vs the usual mantra regarding not rising much. Further further, with obvious detractions and raises, the Twins could an additional $15M in payroll and still not exceed 2014.

 

6) Twins payroll going back to 2004, season begining:

 

While still in the Dome: (ML ranking)

 

2004: 53,584,000. (19)

2005: 56,615,000. (20)

2006: 63,396,006. (19)

2007: 71,439,500. (18)

2008: 56,932,766. (25)

2009: 65,299,267. (24)

 

While in Target Field: (ML ranking)

 

2010: 97,559,167. (11)

2011: 112,737,000. (9)

2012: 94,085,000. (13)

2013: 75,802,500. (22)

2014: 85,776,500. (24)

 

There are multiple conclusions to draw from these numbers. One is that the Twins payroll jumped significantly since they moved in to Target Field, regardless of whatever total % you care to use or speculate on. Two is that the Twins clearly felt they had something good going on with said jump in payroll for 2010, and they did, winning 94 games and a division crown. They also clearly felt 2011 would be as good or better as they topped the $100M mark for the first time in team history with a record payroll of nearly $113M. Three is that the team, rightly or wrongly, naive or not, felt they could make some moves and rebound in 2012 as they still kept the payroll in the $94M area rather than cut and run and jump right in to an immediate rebuild.

 

7) I am no apologist for billionaire owners and how they run their sports franchises. And as a lifelong Twins fan, I DO have a horse in this race. But for a moment, consider all the facts presented here.

[diehardtwinsfan]

well said doc.

 

One thing I'd draw from those numbers is that while payroll was high, they put some pretty bad teams on the field in 2011 and 2012. That's going to lead to declining attendance and I woudln't be shocked at all if they were well over the 52% number as fans lost interest and stopped going to games, buying overpriced concessions, and overprised merchandizing. Based on picking up that draft pick, I wouldn't be terribly shocked if they are closer to 50% revenue than they are 30% as some have speculated. I think the Twins will generally strive to keep payrol around the 95M mark when they are winning with a couple of seasons going all in if they are close. That's my 2 cents at least.

[jay]

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

 

Remaining playoff teams by payroll rank...

Giants (7)

Cards (13)

Orioles (15)

Royals (19)

 

11 of the top 12 payrolls didn't make it to baseball's final four....

 

While the Twins aren't likely to reach #7 ($154M) anytime soon, they've shown the ability to be in that 10-15 range on the right occasion.  That occasion almost certainly isn't 2015.