Minnesota and Big Contracts

[scottz]

 

The point of the original post is a rebuttal to the hyperbole that the Twins never have and never will spend top dollar on players and the Pohlads are always cheap. On rare occasions, they have broken that mold

That's quite a rebuttal.

[goulik]

 

That's quite a rebuttal.

THANKS!!

[Major League Ready]

 

The value of the franchise has nothing to do with competing. For the many years they weren't competing, the value was still skyrocketing. It doesn't hurt, but the franchise has/had no value? Seriously?

 

As far as a "hobby", or a "hobby business" needing to be profitable - we all, I hope, have that passion that we spend on to enjoy life. I hope that is the point of it for all, really, because we all deserve it. Rich or not, it is a percentage of our income and wealth. I hope the Pohlads can have some fun, even a lot of fun, and use what they can't die with.

 

You are correct. I should have taken more time to make this point. Mike insists that people should not spend money on the team if they are not willing to spend at a rate which would result in less profit. Given an incremental five or even 10 million is going to have little impact, we can assume we are talking about cutting profitability in half (at least). If fans followed Mike’s position, and the team needed to operate at a minimum profit in order to attract fans, the valuation of the team would be considerable less.

 

What if the team said … we are willing to forgo 80% of our normal profit for the next 3 years if our players are willing to match our contribution? In other words. The players collectively would contribute roughly 24M or roughly 20% of their income. How many fans here think they would do this or should contribute? After all, they make literally 100 times that of the average working American for playing a game.

[Battle ur tail off]

 

You are correct. I should have taken more time to make this point. Mike insists that people should not spend money on the team if they are not willing to spend at a rate which would result in less profit. Given an incremental five or even 10 million is going to have little impact, we can assume we are talking about cutting profitability in half (at least). If fans followed Mike’s position, and the team needed to operate at a minimum profit in order to attract fans, the valuation of the team would be considerable less.

 

What if the team said … we are willing to forgo 80% of our normal profit for the next 3 years if our players are willing to match our contribution? In other words. The players collectively would contribute roughly 24M or roughly 20% of their income. How many fans here think they would do this or should contribute? After all, they make literally 100 times that of the average working American for playing a game.

 

You are assuming that the Pohlads taking a risk by upping their payroll would 100% result in smaller profits. That is assumption more than fact. What happens if they up the payroll and make it to a WS? Then the investment made by them would more than be wiped out by the additional revenue making that kind of run would afford them. 

 

No one is asking this team to run on slim margins or to lose money all the time. People in Minnesota, generally are pretty frugal and understanding people. All the fans are asking is that when the time is right, like it is now, like it was in 2010, like it was 2006, or in the early 2000s, that they bet on their team, coaches, and fans and go ahead and take that chance. Pay more, move a few prospects if needed. Give it everything you can to make that run.

[Mike Sixel]

What I've said is they shouldn't buy tickets if the team is bad, but that it is up them.

 

They should be disappointed with the team if they are good, and cut the budget, and consider not giving the team money.

 

I've said that at times, not always, not every year, they should be willing to bump the payroll and potentially make less profit to win more games, potentially.

 

I'll never tell another fan how to be a fan, that's up to them. But I don't get why a fan wouldn't want the team to go all in occasionally.....

 

Again, asking workers who aren't billionaires to give up wages is very different than asking owners to take less profit. And, I'm a fan asking owners to do this, not an owner asking employees to do something. And, in the NFL, there are instances of players taking less money so other players can be signed.... So it does actually happen. But that's a decision an individual gets to make, just as the owner can decide to make more or less profit.

 

I've never once said the owners shouldn't make money. ..

[Otto von Ballpark]

 

You are correct. I should have taken more time to make this point. Mike insists that people should not spend money on the team if they are not willing to spend at a rate which would result in less profit. Given an incremental five or even 10 million is going to have little impact, we can assume we are talking about cutting profitability in half (at least). If fans followed Mike’s position, and the team needed to operate at a minimum profit in order to attract fans, the valuation of the team would be considerable less.

Perhaps as a league-wide thing? Although even then, pro sports team ownership is such an elite, exclusive club, and tied so much to other interests (media networks, real estate, etc.), that I'm not sure lowering the team profit would matter all that much to the market of buying and selling teams, where franchise valuation is determined.

 

But more narrowly, a specific ownership group could absolutely run their team at minimum profit for a few years without their affecting franchise valuation at all, if they felt the competitive circumstances warranted it.

[Major League Ready]

 

I'm not disagreeing about their relative spending vs. other teams, it's a related but largely inconsequential point.

 

Their spending has not been in the range that was pitched as one of the primary purposes for needing a publicly-funded stadium (50-52%). Considering that, I think it fully justified that some folks might want to see them pony-up from time to time. 

 

The 50-52% is a soundbite. It's a player's association demand. I don't doubt someone in the organization made the comment that 50-52% was a targeted range. However, how is their spending relative to income and relative to other teams in terms of profitability inconsequential? The premise being argued here is the relative greed or cheapness of the Pohlads. How do we measure their relative greed if not against the other teams? If their relative willingness to invest in players is the same as other teams, we can say all of the owners are greedy but we can say the Pohlads are particularly greedy.

 

Player salaries have trended down the last few years. Could it be because teams are spending more money on analytics, development programs, facilities, etc because teams are recognizing this investments nets the most productivity on the field per dollar spent.

 

BTW ... I would love it if the Pohlads were willing to run the team at break even but I certainly have no expectation they do, just as I expect players to get every dollar they can in free agency or arbitration. I expect they are as aggressive as the other teams on average.

[Major League Ready]

 

Perhaps as a league-wide thing? Although even then, pro sports team ownership is such an elite, exclusive club, and tied so much to other interests (media networks, real estate, etc.), that I'm not sure lowering the team profit would matter all that much to the market of buying and selling teams, where franchise valuation is determined.

 

But more narrowly, a specific ownership group could absolutely run their team at minimum profit for a few years without their affecting franchise valuation at all, if they felt the competitive circumstances warranted it.

 

I don't disagree. If lowering profits resulted in a dominant team, it might actually improve the brand and therefore eventually the evaluation. My response was specific to the premise Mike promotes every year which is that people should not spend money on tickets if the team isn't willing to operate at a minimal profit.

 

If you look back, I was advocating a payroll of a little over $140M. I advocated the signing of free agents. However, I also understand the absolute necessity  of production per/dollar spent, especially when so many teams can outspend us. Their reluctance to pay what it would have required was not a product of cheapness. I think it's a fair assumption that they felt they could make a better investment. This is not a difficult concept. Wolves fans have been lamenting signing to a max contract. It's not because they are worried about Glen Taylor's bank account. They understand that there is a max the team can spend and investing this much in Wiggins would likely prevent the team from putting together an elite team.

 

There are those who will respond that there is no salary cap in baseball. None of us have a formal cap on our spending either but we recognize we can't spend more than we take in. Can we agree there is a stark contrast to the way NHL or NBA fans view investment in player salaries? Those fans understand the necessity of production per dollar spent, Would you agree?

[Major League Ready]

 

What I've said is they shouldn't buy tickets if the team is bad, but that it is up them.

They should be disappointed with the team if they are good, and cut the budget, and consider not giving the team money.

I've said that at times, not always, not every year, they should be willing to bump the payroll and potentially make less profit to win more games, potentially.

I'll never tell another fan how to be a fan, that's up to them. But I don't get why a fan wouldn't want the team to go all in occasionally.....

Again, asking workers who aren't billionaires to give up wages is very different than asking owners to take less profit. And, I'm a fan asking owners to do this, not an owner asking employees to do something. And, in the NFL, there are instances of players taking less money so other players can be signed.... So it does actually happen. But that's a decision an individual gets to make, just as the owner can decide to make more or less profit.

I've never once said the owners shouldn't make money. ..

 

I noticed you avoided answering my scenario which was quite specific. Would players be willing to take a much smaller hit (on a percentage basis) if the team was willing to forgo profits in order to spend more on players? Will anyone have the guts to say ... their might be a player or even two but in general every player is going to want every last dime coming to them.

[nicksaviking]

 

I noticed you avoided answering my scenario which was quite specific. Would players be willing to take a much smaller hit (on a percentage basis) if the team was willing to forgo profits in order to spend more on players? Will anyone have the guts to say ... their might be a player or even two but in general every player is going to want every last dime coming to them.

 

I doubt Zack Wheeler is one of only two players who chose a deal of lesser money for an ulterior goal. We've heard of players take less money to go (or remain) in a preferred destination, but we also hear of players who only want to play for a contender. It's presumptuous to assume they wouldn't take a lesser offer to ensure they have better teammates and/or a greater chance of winning a WS.

 

[Mike Sixel]

I've never said they should always operate at a minimum profit. Not one time. I've said they should occasionally go all in.

 

You yourself said you would also like them to do so... But you don't expect it. Which is also what I've said.

[Otto von Ballpark]

 

I doubt Zack Wheeler is one of only two players who chose a deal of lesser money for an ulterior goal. We've heard of players take less money to go (or remain) in a preferred destination, but we also hear of players who only want to play for a contender. It's presumptuous to assume they wouldn't take a lesser offer to ensure they have better teammates and/or a greater chance of winning a WS.

Wheeler picked the better/closer team, but the reported higher offer was pretty much within a rounding error. I don't think that really disproves the general point that money talks for most of these guys (and why I would have been really curious to see what would have happened if the Twins were bidding in that range too).

[Major League Ready]

 

I doubt Zack Wheeler is one of only two players who chose a deal of lesser money for an ulterior goal. We've heard of players take less money to go (or remain) in a preferred destination, but we also hear of players who only want to play for a contender. It's presumptuous to assume they wouldn't take a lesser offer to ensure they have better teammates and/or a greater chance of winning a WS.

 

You have changed the scenario. I have often said players are going to go where they want to play. The financial sacrifice is very modest for them to do so. The premise being promoted here is that the team take a substantial bottom line hit in order to sign a desirable player. I am asking if players would take even a fraction of that hit in order to contribute to winning. We all know players would not take any substantive reduction. 

[USAFChief]

 

You have changed the scenario. I have often said players are going to go where they want to play. The financial sacrifice is very modest for them to do so. The premise being promoted here is that the team take a substantial bottom line hit in order to sign a desirable player. I am asking if players would take even a fraction of that hit in order to contribute to winning. We all know players would not take any substantive reduction. 

No...the premise here is that sometimes the Twins could take a very modest financial sacrifice too.

 

Settling for a few break even years, or modest losses even, in light of near constant profit, and $1.2 billion in franchise appreciation, doesn't seem unrealistic. Particularly in light of taxpayer built operating facilities. 

[USAFChief]

 

The 50-52% is a soundbite. It's a player's association demand. I don't doubt someone in the organization made the comment that 50-52% was a targeted range.  

No, it's been a standing statement from the franchise going back well into the dome days. Here's just one source, you can find others

 

http://www.startribune.com/should-you-be-mad-at-the-twins-for-their-decreased-payroll/505032412/

 

And that ignores the fact the Twins made the same claim in the dome, when revenues were way lower. Which begs the question...if ~$65M was enough for "other expenses" besides payroll in 2009, why then did the team suddenly need ~$120M for "other expenses" when they moved into TF?

 

Why'd the "50% to payroll" stay the same?

 

[Diesel]

If the Twins have a payroll of like 140-160 million, I would be happy. Would put them in top 10-15 range of payroll, which a team with a newer publicly funded stadium and World Series aspirations should have

[Major League Ready]

 

No...the premise here is that sometimes the Twins could take a very modest financial sacrifice too.

 

Settling for a few break even years, or modest losses even, in light of near constant profit, and $1.2 billion in franchise appreciation, doesn't seem unrealistic. Particularly in light of taxpayer built operating facilities. 

 

So, in other words, you refuse to answer the question I asked. Would the players sacrifice any substantive salary to help build a winner?  I am sure you will find another way to avoid answering the question to which we all know the answer.

[Dman]

 

I don't disagree. If lowering profits resulted in a dominant team, it might actually improve the brand and therefore eventually the evaluation. My response was specific to the premise Mike promotes every year which is that people should not spend money on tickets if the team isn't willing to operate at a minimal profit.

 

If you look back, I was advocating a payroll of a little over $140M. I advocated the signing of free agents. However, I also understand the absolute necessity  of production per/dollar spent, especially when so many teams can outspend us. Their reluctance to pay what it would have required was not a product of cheapness. I think it's a fair assumption that they felt they could make a better investment. This is not a difficult concept. Wolves fans have been lamenting signing to a max contract. It's not because they are worried about Glen Taylor's bank account. They understand that there is a max the team can spend and investing this much in Wiggins would likely prevent the team from putting together an elite team.

 

There are those who will respond that there is no salary cap in baseball. None of us have a formal cap on our spending either but we recognize we can't spend more than we take in. Can we agree there is a stark contrast to the way NHL or NBA fans view investment in player salaries? Those fans understand the necessity of production per dollar spent, Would you agree?

 

I tend to agree with your analysis here and I think we see it borne out in looking at teams in the bottom half of revenues.  Teams like Tampa and Oakland with less money in their budget need to maximize the  dollar value per performance a player gives to the team.  They have to take more risks on development and sometimes even trade productive players early to get some type of decent return.  

 

Granted the Twins revenue is higher and they can take slightly more risk in the FA pool but those parameters and type of thinking still apply IMO.  Smaller market teams have a harder time selling out for high priced free agents because it limits what they can do with the rest of the roster and if the that player gets injured or becomes unproductive it really upsets the balance of the team. 

 

That being said when a window presents itself it seems best to take advantage of it.  I think the Twins will be looking for FA player production that gives them good value for the dollar. Using this mindset i think that with the Bumgarner bidding going up the less likely I see him becoming a Twin.  I think they likely drop down to Ryu or Keuchel.  I think years and dollars matter more to teams that generate less revenue.  Granted there are and can be exceptions I just think the Twins FO will ultimately still look for better value when push come to shove.

[goulik]

 

 which a team with a newer publicly funded stadium and World Series aspirations should have

I am sorry but the "newer publicly funded stadium" part of this is a straw man. Actual revenue from said newer publicly funded stadium does not push them into top 20 revenue in the majors. It moved them from just above the A's to low 20's in revenue rank and made staying in Minnesota viable.

 

World Series Aspirations part of this is spot on though. Yes, this is the time to push the chips all in, lose money and win a world series with the financial losses being offset by all the recent years they saved so much money by being way under budget in Salary expenses.

[goulik]

 

That being said when a window presents itself it seems best to take advantage of it.  I think the Twins will be looking for FA player production that gives them good value for the dollar. Using this mindset i think that with the Bumgarner bidding going up the less likely I see him becoming a Twin.  I think they likely drop down to Ryu or Keuchel.  I think years and dollars matter more to teams that generate less revenue.  Granted there are and can be exceptions I just think the Twins FO will ultimately still look for better value when push come to shove.

Honestly with all the miles on Bumgarner's arm, Ryu may be the better investment either way. Only time will tell. With Bumgarner you're paying for the World Series Experience despite declining peripherals. With Ryu you have better peripherals but no proven experience at that critical next level...

[Rosterman]

It is NOT about how much you pay players. It is HOW MUCH you can spend on overall payroll each and every season.

 

A Couple of Points:

 

Teams should spend 53% of revenue on payroll. Actually, they can spend moe than that at a certain point, depending on the profit and success of each seasn. I always blanch at such a blanket statement. If you suddenly make $400 million in a season and can now spend $200 million on payroll, instead of the $150 million spent the previous season on $300 million....you aren't spending that additional $50 million in front office expense.

 

Teams are also willing to reduce their budget when the team under performs during a season. The past two seasons the Twins have had less than normal payrolls (for the time) but have had decent attendance success (plus selling many more full-price rather than season tickets) and better ratings on radio and television. So, in reality, they have pocketed funds that could've been spent on...payroll.

 

When Target Field was built, the Twins were going to try and KEEP their own players. Most of that happened before, rather than now. Yes, the Twins kept Puckett from going to more fruitful pastures, plus locked up hometown kid Mauer. But Hunter Walker, Morneau and Koskie parted ways, Cuddyer took big money. Even Santana took $20 million more to play in New York. If he ahd stayed in Minnesota, he would've been a star. Sure, he should've been a star in NYC, but.....

 

The Twins play lip-service to Big Contracts. They just lost out on Wheeler because they came in at only $100 million and Wheeler wanted to be on the east coast, plus the Twins wouldn't blow-him-away with signifcantly more than $118 million. Last year they missed out on Yu Davish by a few million. But then we hear that folks like Ervin Santana and Kevin Correia jump at Twins offerings because they go above what it looks like they may get elsewhere. Yet the Twins never break the bank (beyond Mauer). Okay, maybe they did this year with Odorizzi getting a big payout. But the Twins can afford it this year, can't they? The thought of tying up funds over $20 million a player for 5-6-7 years truly ahs to be as daunting for the front office as well as fans.

 

Throwing money at a player can work. But also throwing decent money at good players who mesh as a team can also work. Four solid starters can be as good as one superstar and 2-3 also-rans. Last year the Twins five starters started 146 games. All pitched more than 140 innings. They won 53 of their starts and lost 34. A $25 million pitcher might add 8-10 wins and good innings. But you could also have a 5th starter that would take back 6-7 of those wins.

 

I think we are seeing some fine moves by the front office on shorter term deals. I think they will extend our own players, within reason, and what happens with Berrios, Buxton, Sano and maybe Rosario will give us a better idea of that investment, within reason, for the future. But they also are carefully weighing their own draftees vs. patching in quality free agents. Last year they did good, except in the bullpen...but many of those names were also-rans and jettisoned, and the Twins had a couple of failures in guys they thought would contribute (Hildenberger, Moya, Romero. 

 

The Front Office was hired and were looking towards 2021 being their limelight year. They had to work with field staff that they finally changed this season. Joe Mauer came off the books and field. The farm system management ahs been reorganzied totally once this season starts. And they have pretty much moved-on from prospects of the old regime.

 

[Battle ur tail off]

 

 

 

The Front Office was hired and were looking towards 2021 being their limelight year. 

 

Oh come on with this. 

 

We have been hearing such a such a year is what we are shooting for, for as long as we have been fans. Circumstances change. Doesn't matter if they thought 2021 would be their year. 2019 was and now 2020 is setting itself up that way too. 

 

I agree with the rest of your post, except the part about 4 solid starters being worth just as much as a higher end guy, etc. Yes, you are right, throughout the course of 162 that might hold true. But when it comes down to 5 or 7, you need those studs. 

[Steve Lein]

 

For more than 2 decades I have listened to Minnesota Twins fans complain that the Pohlads never give out big contracts. This is mostly but not necessarily 100% true. As a market that is not close to top 10 in the U.S., we, like most markets deal with the rise and fall of team salaries and our clubs are working within a more constrained budget than teams from Los Angeles, New York, Boston, or even Chicago. Now I'm not gonna be a Pohlad Pocket Protector, but there are times this team has handed out big contracts. Let's examine some truth in history:

 

In 1989, Kirby Puckett was being courted by the big market teams and everyone knew he was going to become the highest paid player in baseball. There were lots of rumors of the Yankees trying to sign him and everyone in Minnesota was anxious that we were about to lose our favorite player to the Evil Empire. Turns out that the biggest offer he got was from the Red Sox but Kirby took a home town discount and stayed here. He also became the first player in MLB history to make 3 million dollars a year.

https://www.nytimes.com/1989/11/23/sports/puckett-hits-the-jackpot-first-3-million-man.html

 

Fast forward past all the losing of the 90's and nearly getting contracted. We lose Hunter to free agency and Johan Santana is demanding a trade,  We are finally out of the Dome and immediately we offer up not one, but two big contracts starting with the MVP himself Justin Morneau and the much loved Michael Cuddyer. 

https://www.espn.com/mlb/news/story?id=3214732

 

Two short years later, the home town hero is rumored to be a future Yankee. The hand wringing has started all over again and Minnesotan's are sweating. But before Mauer even gets to the open market and tests those waters, the 4th largest MLB contract ever at that point in History is:

https://bleacherreport.com/articles/366903-the-184-million-man-joe-mauer-signs-extension-with-twins

 

Let the record show, the Pohlads are usually cheap, but not always. For more signing history, see also:

http://twinsdaily.com/_/minnesota-twins-news/minnesota-twins/the-best-free-agent-signings-in-twins-history-r8447

and 

https://puckettspond.com/2011/11/03/best-twins-free-agents-ever/

 

My end note: It was also cool when we brought home Dave Winfield

 

The major flaw here is none of these contracts were for a Free Agent not currently in the organization.

[goulik]

 

Why do players sign in California?

So you want an honest answer to that? I will assume yes...

Climate

Bigger market/alternate sources of income with increased market size that off sets taxes

Ability to roll with the rich and famous mega stars of SoCal

 

I'm sure there are many more things to add....Many similar to why one would choose NYC over Minnesota.

[goulik]

 

The major flaw here is none of these contracts were for a Free Agent not currently in the organization.

This is true and was discussed in the first couple of comments.  Welcome to the party!

[diehardtwinsfan]

 

 

Are people Ford fans, like they are Twins' fans? Do they keep buying bad Fords, because they are fans? Do Ford buyers care if Ford makes money, or if they make good cars?

 

 

 

My  in-laws would be exhibit A in this category... They keep buying them despite all their car troubles. 

[diehardtwinsfan]

 

MSP is a bigger market than St. Louis. I would like to see us be in their neighborhood instead of the Royals.

 

I'm not disagreeing with you on whether or not they should spend more. I've stated that I think they should use that resource, especially since they have room in their payroll. I'm never going to argue though that they spend for the sake of spending. 

 

My point though is that at the end of the offseason, I'm grading them on how well they solved the problem of impact pitching. If they end up trading prospects and getting impact on the mound, so be it. I'm not complaining. 

[Diesel]

World Series Aspirations part of this is spot on though. Yes, this is the time to push the chips all in, lose money and win a world series with the financial losses being offset by all the recent years they saved so much money by being way under budget in Salary expenses.

6 straight years of being terrible certainly didn’t help revenue. That’s why I think that 140-160 million dollar range is reasonable. The team needs to capitalize on the opportunity to win so a new generation can fall in love with the game.

[operation mindcrime]

No one has ever said that it guaranteed anything. That is a straw man.

 

How well do teams that avoid big contacts do in the playoffs?

They get swept by the Yankees!

[old nurse]

 

MSP is a bigger market than St. Louis. I would like to see us be in their neighborhood instead of the Royals.

By cable market size it is not close, St Louis wins.