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Minnesota and Big Contracts


goulik
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OK, I could have used Disney or any other company in the entertainment business. Your premise that they should not care about profit because they are in the entertainment business is incredibly naive IMO. If you don't like that side of the argument, why is it that players should treat this business like a business but owners should not? 

 

If you worked for twins and they came to you and said we want everyone to contribute 25% of their wages and we will match in order to spend more on players, would you accept that sacrifice. After all, shouldn't you care more about winning since you chose to work for a MLB team? Funny how it's easy to say others should sacrifice.

 

I'm asking billionaire owners to make less profit.....not (likely underpaid) workers to give up wages that they need to pay their bills. I'm not sure how those two things are comparable at all. Not even a little.

 

And, again, I'm a fan....I'm speaking for what I want as a fan. Not an owner. Not an employee. Not a player. A fan.

 

As for Disney, if they stopped investing in good movies, and put out bad movies, I'd stop watching them. Since the TWins have failed at drafting and developing or trading for starting pitchers, and since they are in contention, I'm asking them to sign some FA pitchers, a stance you agree with. If they won't pay what other teams pay, then the product probably won't be good.

 

This isn't the movie business, or food business....there are only a few hundred human beings that can play baseball at an elite level. If you want an elite team, you have to have some of those elite players. 

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Using the link I shared above, Check out where we ranked in spending before and after building the new stadium. There actually was a huge uptick in how much the pohlads spent. A lot of that spending went to Mauer and Morneau which is also why there was a lot of vitriol towards Mauer and his contract as a 1B instead of being a Catcher.

 

Again, I do not think the Pohlads have done as much as they should have at times and I definitely will be upset if they do not spend big on someone or even a couple someones this off season.

 

To be fair, your response doesn't really address my points, which are in relation to the implications given during the publicly funded stadium debate, in that the stadium would allow the team to increase spending with a loose target of 50-52%. There have been many scenarios over the past roughly 10 years where they could have spent more (according to the % of revenue model noted above) but didn't whatever reason.

 

With all that being said, I've never been one who is really passionate on either side of this "Twins don't spend enough/Twins can't spend more" argument so I feel weird getting into it; but when trying to be objective about the topic it's just difficult to buy into the notion that the Twins are spending what they could. I don't know, spending more doesn't necessarily always equate to more wins (Chris Davis), but sometimes it does (Max Scherzer). 

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You apparently don't understand that the primary determinant in valuation is profitability. If they can't compete while remaining profitable, the franchise has no value.

So...they've been enormously profitable.

 

Thanks for helping demonstrate they can afford a much, much larger payroll.

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To be fair, your response doesn't really address my points, which are in relation to the implications given during the publicly funded stadium debate, in that the stadium would allow the team to increase spending with a loose target of 50-52%. There have been many scenarios over the past roughly 10 years where they could have spent more (according to the % of revenue model noted above) but didn't whatever reason.

 

With all that being said, I've never been one who is really passionate on either side of this "Twins don't spend enough/Twins can't spend more" argument so I feel weird getting into it; but when trying to be objective about the topic it's just difficult to buy into the notion that the Twins are spending what they could. I don't know, spending more doesn't necessarily always equate to more wins (Chris Davis), but sometimes it does (Max Scherzer). 

If you look at team spending before and after the new stadium, the Twins went from as low as 30th and usually at the very bottom of spending to usually somewhere around 18th even though they are not a top 18 market in revenue. (they are 22nd)

 

https://www.statista.com/statistics/193645/revenue-of-major-league-baseball-teams-in-2010/

 

Edit: not sure why the link is behind a paywall when I found it on a simple search and did not have to pay to get the link...

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The Pohlads are the 4th richest owners in MLB, and the 75th richest family in America.

 

Sources: https://moneyinc.com/the-20-richest-mlb-owners-in-the-world/

Sources: https://www.forbes.com/profile/pohlad/#3818177f5b07

That has been shown to be irrelevant to the payroll. The Pohlads generally do not let anything drain a positive cash flow. That is pretty much true for all of the baseball owners. The exception was the now dead pizza guy from Detroit. Could somebody help me remember what World Series the Tigers have won since 1993

 

Miami  did not buy a championship in 03 they had the 6th lowest payroll. in 1997 they upped the payroll a whopping 34 million

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Yes, I do believe it's morally wrong to run a major league sports team for profit only - especially when you're an uber-billionaire and your team plays in public funded stadium. 

I don't mind them breaking even, but I tend to agree, that should be the goal. Win as much as you can while not losing money. The appreciation on the value of the franchise is more than enough return on investment. And it is hypocritical to suggest pro sports teams are a quasi-public entity when convenient and a private business when it's not.

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Here's another question. What free agents have you wanted the Twins to sign through the years, if you even remember?

How have those players done?

Just because you give someone a big money contract, it doesn't mean the player is automatically going to deliver.

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Here's another question. What free agents have you wanted the Twins to sign through the years, if you even remember?

 

How have those players done?

 

Just because you give someone a big money contract, it doesn't mean the player is automatically going to deliver.

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?

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It is time for the Twins to pony up.   We built them a stadium now it is time for the payback.   The offense is there for a contender.  This market has proven it will attend games where there is realistic hope of a winner.  IMO,  this is the opportunity to make up for not signing premium hitting during the Gardy years.   IMHO, if the Twins do not have record payroll at the start of the season, they are very boycott worthy.

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If you look at team spending before and after the new stadium, the Twins went from as low as 30th and usually at the very bottom of spending to usually somewhere around 18th even though they are not a top 18 market in revenue. (they are 22nd)

 

https://www.statista.com/statistics/193645/revenue-of-major-league-baseball-teams-in-2010/

 

Edit: not sure why the link is behind a paywall when I found it on a simple search and did not have to pay to get the link...

 

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. 

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The following numbers are very important:

 

Marlins 0%
Rays 0%
Rangers 0%
Astros 0%
Mariners 0%
Phillies 3.07%
Pirates 3.07%
Tigers 4.25%
Diamondbacks 4.54%
Rockies 4.63%
Indians 4.9%
Reds 4.9%
White Sox 4.95%
Cubs 4.95%
Red Sox 5.05%
Cardinals 5.4%
Royals 5.4%
Braves 5.75%
Orioles 5.75%
Brewers 7.65%
Yankees 8.82%
Mets 8.82%
Nationals 8.95%
Twins 9.85%
Padres 13.3%
Dodgers 13.3%
A's 13.3%
Giants 13.3%

 

 

They are the max state income rates in these states.  So, if a player gets a 100,000,000 million contract offer by the Rays, just to match it the Twins have to offer 109,850,000 million.  Only the 4 CA teams are more disadvantaged than the Twins on the matter, but CA has additional advantages than MN as far as quality of life goes...

 

Got to compare apples with apples.  Just within the division, the Twins would need to spend 5% more than the other teams to offer the players equal contracts.   That does not help, but I do not see MN getting up in arms against their politicians

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So, if a player gets a 100,000,000 million contract offer by the Rays, just to match it the Twins have to offer 109,850,000 million. 

We just went through this, in another thread: Rosenthal: Minnesota Tax Rate 2nd Highest in Baseball.

 

Even the 0-state-tax players pay state tax, because road games are taxed by the states when the games are held. The effect is somewhere about half of what you state, and varies by teams' playing schedules. Toronto is the place that has a problem.

 

TD member tvagle published a nice table (I hope he did the math right): https://docs.google.com/spreadsheets/d/1aROefA3sv-PHroDmINNAdxOtGr0Jv-jz0Yw2ZEORJqA/edit#gid=209500107

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It always stuns me how some people find a way to attempt rationalization of the Pohlads. It’s absurd.

 

Saying you’re fine with it is one thing. Cherry picking 3 or 4 contracts And 2 years out of 40 years as evidence they spend is patently ridiculous. Also, those were contracts they had to sign to avoid a PR nightmare (can you imagine letting Joe Mauer walk in his prime while planning on moving into a new ballpark and you’re supposedly trying to contend? It’s common sense).

 

We’re supposed to take solace in the fact they’ve cracked the top 10 in spending two times in franchise history?

 

The Ford analogy is also ridiculous. Automotive companies are literally required to forego profits by law to meet certain standards of safety and efficiency (aka, quality). They tried to skimp and cheap out on the product to maximize profits. People stepped in and said, “you’re a fraud, you have a fiduciary responsibility to make safe, reliable, and efficient cars.” Its arguing against the attempted point without even realizing it.

 

Why do you think various sports have implemented salary floors?

 

Name me another line of business where you dictate your profit margin. Where you can say, “I’m only investing 50% of revenues, the rest is going in my pocket, like it or not. You still have to buy the product because I monopolize the market.” (Which is verbatim what they have said, basically). Name me another line of business where the owners of all the companies can get together at a publicized meeting at a swanky hotel and collude. There is zero market reaction because of profit sharing, monopolistic localized markets, etc.

 

There is nothing worse than a self-righteous Pohlad Pocket Protector trying to tell me how they know better (because what do I know about corporations, profits, finance, etc....I’m only a silly CPA with a masters degree). It’s a form of virtue signaling (“I’m so much more financially sophisticated, you just don’t get how it works”.....you know what? neither do you, clearly).

 

These people can darn near print money. Defending them for not investing an extra $20-$30 million is insane. You do realize that the Pohlad’s have unrealized gains of over $1 billion in their purchase of the Twins? That’s on top of their annual net. Where is “foregoing profits” to sign a couple of free agents coming from (besides a rear end)? They could literally sign every free agent on the market this year and still be well into the black. $20-$30 million per year is the difference between rounding to a ten thousandth instead of a thousandth.

 

Just stop it.

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The following numbers are very important:

 

Marlins 0%

Rays 0%

Rangers 0%

Astros 0%

Mariners 0%

Phillies 3.07%

Pirates 3.07%

Tigers 4.25%

Diamondbacks 4.54%

Rockies 4.63%

Indians 4.9%

Reds 4.9%

White Sox 4.95%

Cubs 4.95%

Red Sox 5.05%

Cardinals 5.4%

Royals 5.4%

Braves 5.75%

Orioles 5.75%

Brewers 7.65%

Yankees 8.82%

Mets 8.82%

Nationals 8.95%

Twins 9.85%

Padres 13.3%

Dodgers 13.3%

A's 13.3%

Giants 13.3%

 

 

They are the max state income rates in these states. So, if a player gets a 100,000,000 million contract offer by the Rays, just to match it the Twins have to offer 109,850,000 million. Only the 4 CA teams are more disadvantaged than the Twins on the matter, but CA has additional advantages than MN as far as quality of life goes...

 

Got to compare apples with apples. Just within the division, the Twins would need to spend 5% more than the other teams to offer the players equal contracts. That does not help, but I do not see MN getting up in arms against their politicians

No, because $5 million to an MLB franchise would be like me complaining about having to spend 5 cents more for a gallon of milk at the grocery store, and expecting the bum rattling a cup on a street corner to care.

 

Why should the state forego tax dollars for infrastructure, etc. for the Pohald’s to line their pockets even more? The state’s taxpayers already did the heavy lifting in funding a new ballpark. Remember that? When they were going to contract....then pickup and leave? The loyalty from them to their fans can be quantified with a negative.

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We just went through this, in another thread: Rosenthal: Minnesota Tax Rate 2nd Highest in Baseball.
 

Even the 0-state-tax players pay state tax, because road games are taxed by the states when the games are held. The effect is somewhere about half of what you state, and varies by teams' playing schedules. Toronto is the place that has a problem.

 

TD member tvagle published a nice table (I hope he did the math right): https://docs.google.com/spreadsheets/d/1aROefA3sv-PHroDmINNAdxOtGr0Jv-jz0Yw2ZEORJqA/edit#gid=209500107

 

It all added up when I did it :)

 

Make your own copy of the Google Doc and check it out for yourself if your a Doubting Thomas (or Tim-as as my late uncle used to say to me)

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It all added up when I did it :)

 

Make your own copy of the Google Doc and check it out for yourself if your a Doubting Thomas (or Tim-as as my late uncle used to say to me)

The amazing difference is how much a Blue Jays player loses by signing there.

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I love when people throw out unverified and unsubstantiated claims on expenditures, profits, percentages, etc. This is the hyperbole that makes me dislike posts on TD. The greatness behind the site is all the various fans that have researched real facts and stats. I have tried very hard to use verifiable facts with linked websites in this thread and I greatly appreciate others that have done the same. I understand the fanaticism that is in all our blood but I would hope that at the end of the day reason and logic could help us treat each other with respect and not throw straw men up on both sides of these discussions.

 

Fact, after we built a new stadium for the Pohlads, spending on team salaries jumped exponentially. It just did and those that use that argument are throwing up a straw man because I already linked that site in this thread! Was it enough money? That’s an opinion discussion but we did have a nice run of division championships and an unlucky run of concussions to our two best players and then there was the Liriano injury...

 

Fact, compared to other teams, we tend to spend enough that when compared to the other 30 teams we usually rank 18th or above (again, see link) while team revenue ranks more like 22nd (see link above) and unlike some teams, we have been a top 10 spending team this decade. Hopefully we will be again in the next few years as we chase another WS pennant.

 

Opinion, should the Twins have jumped into the top 10 payroll more and should we have signed more big name free agents in the past? Yes, I agree with that opinion. We will never truly know what they tried to do. We just know the results and these quick exits. They really really hurt.

 

Honestly though, I have not seen any comments by anyone in this thread by people I would call Pohlad Pocket Protectors. I have seen some people over the top in that direction in the past and as many have pointed out in this thread, the Pohlads are doing fine financially but I think everyone would agree we need to sign a big free agent this year. Hopefully 2. The truth is though, any of us on here, if we owned the Twins, we would want it to be a profitable business. The link I do not remember seeing on here is the huge profit margin link.

 

Let’s be honest, we all know there are a lot more expenses to this business other than the player salaries on the 40 man roster so 52% towards player salaries does not equal anywhere close to 48% profits for the owners. To actually see the fully opened books would be fascinating but Who has those figures for us? Until you can name these, we don’t know how much the Pohlads make off the team. I would not be surprised to see proof someday that they were literally losing money back in the dome days of the late 90s.

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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.

 

Do you have a link or the numbers to back up your claim that they have not spent these %s? I’m not saying they have or haven’t because I do not know. If you do know this as fact, can you share that with us please?

 

Edit: Actually I just did a search and here is annual team revenue

https://www.statista.com/statistics/196669/revenue-of-the-minnesota-twins-since-2006/

 

Based on this link and my earlier payroll rank link, we have only exceeded the 50% mark once since Target Field opened and that would have been in 2011. Our 2018 payroll vs revenue was 49% and I do not have the 2019 numbers.

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Dan Hayes of The Athletic reported that non-Minnesota sources told him that the Twins were ready to go further in pursuit of Wheeler and were told not to bother. Wheeler wasn't leaving the east coast, they said. If you were convinced this was factual (I am), would this add a glimmer of hope for you?

I heard that from Hayes too. I don't know if that really reflects all that well on the Twins, though. First of all, it doesn't say they were willing to match or beat $118 mil, and if not, what's the point? Of course Wheeler's not going to bother dragging the Twins from $100 to $110 mil or whatever if he already has two $118+ mil offers in hand, including one from his preferred destination.

 

At best, doesn't that seem to imply the Twins were slow and/or mis-calculated the player's market? And that they didn't even make their best offer for the attainable FA SP they valued the most? Really puts some pressure on them to come through with their fallback plan.

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Using the tax calculator(linked above by ashbury in comment 44), it would have taken us an offer of 122 million for him to reach same take home and she’s form Philli area? Doesn’t sound like we had a chance without serious overpay...

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Do you have a link or the numbers to back up your claim that they have not spent these %s? I’m not saying they have or haven’t because I do not know. If you do know this as fact, can you share that with us please?

Edit: Actually I just did a search and here is annual team revenue
https://www.statista.com/statistics/196669/revenue-of-the-minnesota-twins-since-2006/

 

One time - 2011 - have they spent in these ranges - and to their credit this one year they spent beyond 52%. Other than that, my quick glance at the numbers tells me they have been under 50% every other year.

 

It's time, we have young, controllable, inexpensive talent to make a run, now let's supplement with a bonafide star. It'd be fantastic to see them go get the level of player we simply don't have anywhere in our org - a la Strasburg or Rendon. 

 

https://www.statista.com/statistics/196669/revenue-of-the-minnesota-twins-since-2006/

https://legacy.baseballprospectus.com/compensation/index.php?team=MIN&cyear=2019

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One time - 2011 - have they spent in these ranges - and to their credit this one year they spent beyond 52%. Other than that, my quick glance at the numbers tells me they have been under 50% every other year.

 

It's time, we have young, controllable, inexpensive talent to make a run, now let's supplement with a bonafide star. It'd be fantastic to see them go get the level of player we simply don't have anywhere in our org - a la Strasburg or Rendon. 

 

https://www.statista.com/statistics/196669/revenue-of-the-minnesota-twins-since-2006/

https://legacy.baseballprospectus.com/compensation/index.php?team=MIN&cyear=2019

Agreed and thanks. Looking back to 2001, the only other big % spent on salaries I see is 2003 when they jumped to 56% revenue spent on salaries, 2004 dropped to 52%, 2005 was 50%, and then back into the 40s again. If your going to have years in the 30%s, (‘13 and ‘14) then you should have high expense years too. Let’s make the next 4 to 5 years those years. GO GET COLE!!

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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

Goulik, I’ll accept your rebuttal and add another data point. Last year, the Twins spent more than $50 million on free agents (I’m including Pineda’s entire $10M in that figure, because even though he signed the previous winter, it was really with 2019 in mind, anything he provided in 2018 was a bonus). They just did it over six guys — Cruz, Gonzalez, Cron, Pineda, Perez, Schoop. Naysayers can bellyache that they didn’t break the bank on a huge signing, but I see the wisdom in spreading the risk.

 

And now we receive word that in addition to shrewdly getting Odo to accept the QO (after having shrewdly trading for him a couple years ago), they’ve supposedly shrewdly gotten Pineda for 2/$20M. So they’ve spend $28M so far for next year. I’m like many in saying that I hope they still get MadBum, but even if they don’t, I’m still okay, because I have a pretty high degree of confidence that they are going to have a couple more smart adds.

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Using the tax calculator(linked above by ashbury in comment 44), it would have taken us an offer of 122 million for him to reach same take home and she’s form Philli area? Doesn’t sound like we had a chance without serious overpay...

Not quite. That table, while cool, is only state tax rates. Philadelphia has an additional city tax rate of 3.46-3.88%, which came up in the Harper discussions last year:

 

https://www.inquirer.com/business/phillydeals/bryce-harper-phillies-tax-philadelphia-california-cities-20190318.html

 

I'd guess the overall tax difference is negligible.

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You apparently don't understand that the primary determinant in valuation is profitability. If they can't compete while remaining profitable, the franchise has no value.

 

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.

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