Why the Twins Should Reconsider Cost Cutting

[DJL44]

9 minutes ago, Jocko87 said:

Whats the difference between a 97 OPS+ and a 79 OPS+ in a player?  One is a solid major leaguer and the other is a DFA/AAAA guy.  Its a big difference.

I agree with your thesis of spending to the market.  Your methodology is incorrect though.  You cannot use the best three month period of the year to tell you anything.  If you try to apply for a loan based on the best three months of any seasonal business you will get laughed out of the bank.  There is a large issue with only having one teams data avalible in that small sample size distorts everything and lots of people try to read the data incorrectly.  Just check out this Sports Illustrated article where the call it 272M "profit!!!" instead of revenue.  That kind of misreading of the data causes all kinds of issues.

https://www.si.com/mlb/braves/analysis/atlanta-braves-holdings-2023q3-financial-results

When we pull the lens back on the actual data the 6 month view is enlightening.  The previous 3 months, Jan Feb and March include much of spring training (loss leader) only brings an additional 20-30m in revenue.  Over that 6 month period, including the period you reference, they operated at a loss.  Year over year, they performed significantly worse.  ie lost money.  The largest difference is baseball operating costs, most likely player salary. 

That depreciation line is such a weird thing for baseball. They count player salaries in the baseball operating costs column and then get to double count them by depreciating them as assets. That accounting loophole is enough to push the team into a paper loss. No other business I know of gets to depreciate its employees.

SG&A looks like $120M a year which is mostly executive salaries.

[Jocko87]

20 minutes ago, DJL44 said:

That depreciation line is such a weird thing for baseball. They count player salaries in the baseball operating costs column and then get to double count them by depreciating them as assets. That accounting loophole is enough to push the team into a paper loss. No other business I know of gets to depreciate its employees.

SG&A looks like $120M a year which is mostly executive salaries.

I can't see where they would be depreciating players?  I don't believe any business can do that with employees, including baseball?  It would be a line item in the 10Q i would think.

[Fatbat]

2 hours ago, Riverbrian said:

Personally... I don't care about payroll. The Twins are going to be in a grouping of teams that are going to spend around the same ballpark. 

We ranked 17th last year... I don't care. We spent 154 Million... around 75.5 million of that was spent on players that didn't really significantly produce what the money suggests they should have produced. Correa, Buxton, Gallo, Mahle is 67 million spent. I don't really believe Vazquez and Kepler were worth what we paid them.  

I care about players and the production that we get out of the players. This team made the playoffs because of minimum salary players that did the majority of the producing. 

I understand that money increases your odds of success but that's for the big boys. I'm not going to care about payroll... I'm going to care about production. How Gallo stayed on the roster for as long as he stayed on the roster is beyond me. 

 

Exactly why the twins need to invest in a couple guys not currently on the roster. We are just a couple guys away even tho some people say we aren’t.  We are a young talented team with several more young guys coming fast. Every season is different but pitching always cost $$$.  That whole Gallo/Bundy/Archer/et al of buyng the ugly step sister and hiring a makeup artist is ridiculous. We need actual investment worthy players to cover a couple roster spots that we lack. 

[chpettit19]

12 minutes ago, Jocko87 said:

Whats the difference between a 97 OPS+ and a 79 OPS+ in a player?  One is a solid major leaguer and the other is a DFA/AAAA guy.  Its a big difference.

I agree with your thesis of spending to the market.  Your methodology is incorrect though.  You cannot use the best three month period of the year to tell you anything.  If you try to apply for a loan based on the best three months of any seasonal business you will get laughed out of the bank.  There is a large issue with only having one teams data avalible in that small sample size distorts everything and lots of people try to read the data incorrectly.  Just check out this Sports Illustrated article where the call it 272M "profit!!!" instead of revenue.  That kind of misreading of the data causes all kinds of issues.

https://www.si.com/mlb/braves/analysis/atlanta-braves-holdings-2023q3-financial-results

When we pull the lens back on the actual data the 6 month view is enlightening.  The previous 3 months, Jan Feb and March include much of spring training (loss leader) only brings an additional 20-30m in revenue.  Over that 6 month period, including the period you reference, they operated at a loss.  Year over year, they performed significantly worse.  ie lost money.  The largest difference is baseball operating costs, most likely player salary. 

 

Stepping back to a 9 month view, (full year won't be available until late January at the earliest) we can see most of revenue for the year.  It will be interesting to come back and see playoff impact but this is pretty close to full year revenue.  The playoffs are very conveniently scheduled so we can see the value of a playoff game.  Regardless, almost no revenue in November or December but the bills keep coming.  The final numbers will certainly be worse than these. 

 

From a quick review of the reports, I can see where the Twins TV deal was 10m less.  That plus attendance at 1m or so less feels like a lot more than 18% difference.  18% less revenue than the Braves at 52% of baseball revenue would work out to a $225m payroll to the Twins.  That's not close to correct and the missing information makes it an impossible equation to solve.  The Braves have to service half a billion in debt, how much do the Twins have?  The Twins almost certainly have a different expense structure as well. 

Heck, the Braves aren't even spending 50% of baseball revenue on salary and they are operating at a loss.  What should we expect the Twins to do?  While there will be significant differences between the two teams we can reasonably assume some similarities.  If the Twins are actually at 50-52% of baseball revenue they should be commended as they probably are operating at a loss yearly already.  It's quite obvious that the Correa spend over the last two years pushed the comfort level.  The investment you are asking for has already happened, unfortunately.  If they can't get back to 3m attendance they can't spend much more.

Focus on product instead of payroll.

 

Their OIBDA was 51 million through September. It was 71 million for 2022. And 104 million in 2021. The day to day Braves business is doing quite well.

Were their losses on intergroup interests realized or unrealized? They had 62 mil in unrealized losses through June. They didn't actually lose that money, it's just on paper. The 83 million in the next report could absolutely be unrealized losses. Their depreciations aren't necessarily real losses either. Very likely those are just paper losses to increase their tax deductions.

[DJL44]

54 minutes ago, Jocko87 said:

I can't see where they would be depreciating players?  I don't believe any business can do that with employees, including baseball?  It would be a line item in the 10Q i would think.

The Roster Depreciation Allowance: How Major League Baseball Teams Turn Profits Into Losses – Society for American Baseball Research (sabr.org)

IRS provides safe harbor for professional sports teams trading personnel contracts and draft picks (thetaxadviser.com)

[Fatbat]

17 minutes ago, DJL44 said:

The Roster Depreciation Allowance: How Major League Baseball Teams Turn Profits Into Losses – Society for American Baseball Research (sabr.org)

IRS provides safe harbor for professional sports teams trading personnel contracts and draft picks (thetaxadviser.com)

Isn’t that part of the antitrust agreements that pro sport operate under?

[Jocko87]

1 hour ago, DJL44 said:

The Roster Depreciation Allowance: How Major League Baseball Teams Turn Profits Into Losses – Society for American Baseball Research (sabr.org)

IRS provides safe harbor for professional sports teams trading personnel contracts and draft picks (thetaxadviser.com)

That’s fascinating, thank you.  I would still think it would be on the annual report somewhere though but it further illustrates how different the Braves and the Twins situations are.  The Polahds would seem to be at a disadvantage not having a sale transaction since 84, where the Braves sold and now spun off has certainly reset those basis numbers.  

What’s the depreciation schedule on Correa’s contract? Linearly or I’m sure some sort of cost segregation strategy? 

[DJL44]

10 minutes ago, Jocko87 said:

The Polahds would seem to be at a disadvantage not having a sale transaction since 84, where the Braves sold and now spun off has certainly reset those basis numbers.  

I'm not certain but the inheritance in 2010 might have allowed them to claim depreciation on the team again. The Pohlads nearly ended up in court with the IRS over how they valued the Twins.

Pohlad estate settles with IRS over disputed $250M tax claim - Bring Me The News

Professional sports teams are really good tax shelters.

[Jocko87]

3 hours ago, chpettit19 said:

Their OIBDA was 51 million through September. It was 71 million for 2022. And 104 million in 2021. The day to day Braves business is doing quite well.

Were their losses on intergroup interests realized or unrealized? They had 62 mil in unrealized losses through June. They didn't actually lose that money, it's just on paper. The 83 million in the next report could absolutely be unrealized losses. Their depreciations aren't necessarily real losses either. Very likely those are just paper losses to increase their tax deductions.

As you illustrate, it’s declining significantly.  $51m excludes 3 months without meaningful revenue, they will certainly come in with another year over year decline.  The peak of 104m came in a year where they won a World Series and had one of the best possible business outcomes they could hope for.  A banner year in more ways than one and a very solid business outcome many businesses would kill for.  They are normalizing into an 8-10% business which is nothing to sneeze at but certainly not setting any records.  One bad contract still would hurt.

Take out the Battery numbers, which the Twins don’t have, and I would not be surprised if the Twins weren’t spending more than the 52% on payroll last year. 

OIBDA is also a non-GAAP number.  It’s doesn’t include debt service or interest payments, of which the Braves are servicing half a billion.  It’s a good measure of the baseball operations but not a complete picture of the full business.  

[chpettit19]

30 minutes ago, Jocko87 said:

As you illustrate, it’s declining significantly.  $51m excludes 3 months without meaningful revenue, they will certainly come in with another year over year decline.  The peak of 104m came in a year where they won a World Series and had one of the best possible business outcomes they could hope for.  A banner year in more ways than one and a very solid business outcome many businesses would kill for.  They are normalizing into an 8-10% business which is nothing to sneeze at but certainly not setting any records.  One bad contract still would hurt.

Take out the Battery numbers, which the Twins don’t have, and I would not be surprised if the Twins weren’t spending more than the 52% on payroll last year. 

OIBDA is also a non-GAAP number.  It’s doesn’t include debt service or interest payments, of which the Braves are servicing half a billion.  It’s a good measure of the baseball operations but not a complete picture of the full business.  

None of it is a complete picture, right? The point is they're not really operating at a loss. And the Twins aren't either. Dave St Peter has been the president of the Twins organization since 2002. If the Twins were operating at a loss constantly like some people suggest they are I highly doubt he makes it 20+ years running their organization.

I'm not asking the Twins to do crazy things and throw 20 mil out the window every year or anything. All I'm asking is that they don't slap their fans in the face by cutting payroll as they lead into a competitive window. I'm asking them to run their business better so they actually maximize this market. I'm asking them not to have their president and CEO come out after a season they struggled to stay above .500 before completely collapsing and question fans because they didn't turn out to watch that team (Dave St Peter after 2022). I'm asking that they don't have their president of baseball operations announce a payroll decrease weeks after their first playoff wins in 2 decades (Derek Falvey just a few weeks ago). I'm asking them to at least pretend they care about winning and not just their profit margins. And, yes, they are profits way, way, way more often than they're losses. Either that or St Peter has some very incriminating stuff on the Pohlad family.

[DJL44]

27 minutes ago, Jocko87 said:

Take out the Battery numbers, which the Twins don’t have, and I would not be surprised if the Twins weren’t spending more than the 52% on payroll last year. 

United Properties redeveloped the Ford Center right next to Target Field. That's a Pohlad company. They also developed the RBC Gateway in the North Loop neighborhood.

If the Twins get a loan I would be shocked if they didn't get financing from Northmarq or a similar Pohlad company. They would actually be pretty stupid not to funnel money to other companies by taking out loans and paying interest to themselves.

[Jocko87]

1 hour ago, DJL44 said:

United Properties redeveloped the Ford Center right next to Target Field. That's a Pohlad company. They also developed the RBC Gateway in the North Loop neighborhood.

If the Twins get a loan I would be shocked if they didn't get financing from Northmarq or a similar Pohlad company. They would actually be pretty stupid not to funnel money to other companies by taking out loans and paying interest to themselves.

But its a Pohlad entity, not Twins Baseball LLC so its a different equation.  The question isn't if the Pohlads should kick in from somewhere else, I think we would all be good with that, just the Twins business.  The Battery is part of the Braves so those funds are already at their disposal. 

I think the obvious solution to all this would be that the Pohlads get into the television business, broadcast the team and make money coming and going.  Brilliant!

[old nurse]

18 hours ago, chpettit19 said:

I don't care what you want to label the Twins, a product or whatever other term you want to use. The question isn't weird. The Pohlads want to make more revenue. You keep telling me over and over that they can't/shouldn't invest in their team until they have more revenue. That's not how business works. The Pohlads need fans to invest their money and time in order to make revenue. You're arguing that the fans should do that regardless of the team on the field, or the investment the Pohlads make.

Your argument, at it's core, is that if the fans want a better Twins team they should spend their time and money on the bad team so the Pohlads can make money and then hopefully invest in the team and make it better. What other businesses run that way? What other businesses tell you that if you want the company to spend you have to spend first? 

2022 revenue was 256 million according to Sportrac Cots listed Twins payroll at 156 million.  Twins in the past  have said they would spend 50 % of revenue on players. To all but probably you it would look like they invested in the team. It netted a couple hundred thousand more fans and people like you who say a division winning team is a bad team not worth watching 

Your argument was the Twins should produce revenue like Atlanta. My point was the Twins fan are different than Atlanta, spend different from Atlanta so you cannot expect the same results as Atlanta. If you are expecting the same results as Atlanta you can first  look at ticket prices. To match your standard set by you for the Twins in revenue generation the team would have to dramatically raise prices.  The point that escapes you was you asked for what was an impossible thing.  I did not ask for fans tto spend money first. I have said that they have to be patient  and wait for a core to develop,

[old nurse]

20 hours ago, Woof Bronzer said:

hahahahahahahahahahahahah you know you're arguing a solid position when you have to distort the truth in order to fit your narrative.  Seriously, I think you would benefit from a basic understanding of economics.   Check out your local library.  All this would make much more sense for you.  

Yes I know the facts. Why are you distorting them. Don’t bother responding as there is a mute feature. Good riddance

[Major League Ready]

1 hour ago, old nurse said:

2022 revenue was 256 million according to Sportrac Cots listed Twins payroll at 156 million.  Twins in the past  have said they would spend 50 % of revenue on players. To all but probably you it would look like they invested in the team. It netted a couple hundred thousand more fans and people like you who say a division winning team is a bad team not worth watching 

Your argument was the Twins should produce revenue like Atlanta. My point was the Twins fan are different than Atlanta, spend different from Atlanta so you cannot expect the same results as Atlanta. If you are expecting the same results as Atlanta you can first  look at ticket prices. To match your standard set by you for the Twins in revenue generation the team would have to dramatically raise prices.  The point that escapes you was you asked for what was an impossible thing.  I did not ask for fans tto spend money first. I have said that they have to be patient  and wait for a core to develop,

The number used for payroll is almost always misrepresented in these conversations.   The number used to divide against revenue should include benefits of around 11%.  Many people even omit dead contracts or injured players.  Corporations do not omit costs when they report or speak of expenses.  Not only is it GAAP, it simply makes absolutely no sense to omit parts of total cost for any form of business analytics.   Percentage of payroll = Active players + injured or released + Minor League Contracts + Benefits / Revenue.  Spotrac provides these totals for current year estimates but for some reason does not include them in 2023 numbers.

BTW… When discussing 2023 vs 2024 payroll I don’t recall anyone considering the fact the Twins got a $30M BAM payment last year.  Obviously, this impacted 2023 spending but many ignore this in setting 2024 expectations.  I want them to spend as much as possible but I don’t think the way in which that number is arrived at by fans is determined with all the facts nor is it determined in an unbiased way.  

[chpettit19]

2 hours ago, old nurse said:

2022 revenue was 256 million according to Sportrac Cots listed Twins payroll at 156 million.  Twins in the past  have said they would spend 50 % of revenue on players. To all but probably you it would look like they invested in the team. It netted a couple hundred thousand more fans and people like you who say a division winning team is a bad team not worth watching 

Your argument was the Twins should produce revenue like Atlanta. My point was the Twins fan are different than Atlanta, spend different from Atlanta so you cannot expect the same results as Atlanta. If you are expecting the same results as Atlanta you can first  look at ticket prices. To match your standard set by you for the Twins in revenue generation the team would have to dramatically raise prices.  The point that escapes you was you asked for what was an impossible thing.  I did not ask for fans tto spend money first. I have said that they have to be patient  and wait for a core to develop,

Yeah, I don't care what Spotrac says the Twins revenue in 2022 was. You're more than welcome to believe the numbers from people who have no access to the Twins books. I haven't complained about the 2023 payroll either. I'm complaining about slashing the 2024 payroll. I haven't said they were a bad team either. At this point you're arguing against things I'm not even saying.

My argument is that if they maximize this market they still wouldn't make as much revenue as the Braves when they maximize the Atlanta market, but they'd make more money than they do now. My argument is that they're not maximizing the Minneapolis market. Again, you're arguing against things I'm not even saying. Ah, yes, the old "impatient Twins fans" argument. Yeah, we haven't been patient at all. You're right.

You can't simultaneously complain about me saying a division winning team is bad (which, again, I never said) and suggest the fans need "to be patient and wait for a core to develop." All I hear all over these boards is that the core is here. The time is now. They have Lewis, and Julien, and Wallner, and Kirilloff, and Jeffers, and Ryan, and Ober, and Lopez, and Correa, and Martin on the way, and Lee on the way, and ERod on the way. Every thread about a possible trade is full of people saying "you can't trade the young guys cuz they're the core and they're here!" They were just in the ALDS and you want more patience? When do we stop getting to be patient? If it's not after the first playoff wins in 20 freaking years when is the time? 

Hey, if you think Dave St Peter has held his job as president and CEO of the Twins organization for over 20 years while the team loses money regularly more power to you. I tend to think that people get fired from those positions if the organization they're running loses more money than it makes, but maybe I really don't understand how business works. Is it not more realistic to believe that he's held that job for as long as he has because the Twins make the Pohlads a lot of money? I think it is, but maybe I'm just way off base on what they expect from him. But, if I'm right, and the Twins are making the Pohlads money and that's why they keep the guy in charge of the organization's finances in place for over 2 decades, then I don't think it's unreasonable to ask them to invest in a team that just went to the ALDS instead of destroying their own momentum and slashing payroll. Or we can just be more patient and wait another 20 years for a playoff win and maybe then "a core" will have developed and then it'll be reasonable to ask the Pohlads to invest for a year.

[chpettit19]

13 hours ago, Jocko87 said:

But its a Pohlad entity, not Twins Baseball LLC so its a different equation.  The question isn't if the Pohlads should kick in from somewhere else, I think we would all be good with that, just the Twins business.  The Battery is part of the Braves so those funds are already at their disposal. 

I think the obvious solution to all this would be that the Pohlads get into the television business, broadcast the team and make money coming and going.  Brilliant!

To be fair, The Battery is only part of the Braves because Liberty Media chose to make it part of the Braves. They absolutely could've held that in their main company and not spun it off with the Braves, but they chose to put it with the Braves instead. The Pohlads choosing to push revenue driven by the Twins into another of their entities so as not to be expected to invest it back in the Twins is what frustrates many fans.

[Major League Ready]

1 hour ago, chpettit19 said:

Yeah, I don't care what Spotrac says the Twins revenue in 2022 was. You're more than welcome to believe the numbers from people who have no access to the Twins books. I haven't complained about the 2023 payroll either. I'm complaining about slashing the 2024 payroll. I haven't said they were a bad team either. At this point you're arguing against things I'm not even saying.

My argument is that if they maximize this market they still wouldn't make as much revenue as the Braves when they maximize the Atlanta market, but they'd make more money than they do now. My argument is that they're not maximizing the Minneapolis market. Again, you're arguing against things I'm not even saying. Ah, yes, the old "impatient Twins fans" argument. Yeah, we haven't been patient at all. You're right.

You can't simultaneously complain about me saying a division winning team is bad (which, again, I never said) and suggest the fans need "to be patient and wait for a core to develop." All I hear all over these boards is that the core is here. The time is now. They have Lewis, and Julien, and Wallner, and Kirilloff, and Jeffers, and Ryan, and Ober, and Lopez, and Correa, and Martin on the way, and Lee on the way, and ERod on the way. Every thread about a possible trade is full of people saying "you can't trade the young guys cuz they're the core and they're here!" They were just in the ALDS and you want more patience? When do we stop getting to be patient? If it's not after the first playoff wins in 20 freaking years when is the time? 

Hey, if you think Dave St Peter has held his job as president and CEO of the Twins organization for over 20 years while the team loses money regularly more power to you. I tend to think that people get fired from those positions if the organization they're running loses more money than it makes, but maybe I really don't understand how business works. Is it not more realistic to believe that he's held that job for as long as he has because the Twins make the Pohlads a lot of money? I think it is, but maybe I'm just way off base on what they expect from him. But, if I'm right, and the Twins are making the Pohlads money and that's why they keep the guy in charge of the organization's finances in place for over 2 decades, then I don't think it's unreasonable to ask them to invest in a team that just went to the ALDS instead of destroying their own momentum and slashing payroll. Or we can just be more patient and wait another 20 years for a playoff win and maybe then "a core" will have developed and then it'll be reasonable to ask the Pohlads to invest for a year.

If the best thing for the business financially was for them to "eat it" in 2024 ... That's no doubt what they would do.  You are insisting they take a hit because you assume it will destroy their momentum when you don't know what they will plan to do and none of us knows what will actually be done.  This absurd conjecture would not be tolerated in an actual business environment.  Spending $33M on Correa produced 1.1WAR and there are endless examples around the league.  While spending is obvious advantageous, it's obviously no sure thing.  I bet your employer would like it if you were willing to work for less than market rate.  Players act in their financial best interests.  Your expectation / insistence that a business does not is fanatical.

BTW ... Any junior level financial analyst could construct a revenue estimate for the twins that was relatively accurate.  IDK about Spotrac but Statista has a subscription service and that service is dependent upon accurate data.  My former firm had a subscription and their numbers are pretty close to Spotrac.  The whole I don't care about legit is just refusal to accept anything other than your insisted upon spending level.

[Jocko87]

9 minutes ago, Major League Ready said:

If the best thing for the business financially was for them to "eat it" in 2024 ... That's no doubt what they would do.  You are insisting they take a hit because you assume it will destroy their momentum when you don't know what they will plan to do and none of us knows what will actually be done.  This absurd conjecture would not be tolerated in an actual business environment.  Spending $33M on Correa produced 1.1WAR and there are endless examples around the league.  While spending is obvious advantageous, it's obviously no sure thing.  I bet your employer would like it if you were willing to work for less than market rate.  Players act in their financial best interests.  Your expectation / insistence that a business does not is fanatical.

BTW ... Any junior level financial analyst could construct a revenue estimate for the twins that was relatively accurate.  IDK about Spotrac but Statista has a subscription service and that service is dependent upon accurate data.  My former firm had a subscription and their numbers are pretty close to Spotrac.  The whole I don't care about legit is just refusal to accept anything other than your insisted upon spending level.

And my suspicion is that they already “ate it” in 22 and 23.  There is room in the bounds of the rumored numbers that brings a championship roster to spring training next year.  They will likely have to spend from the prospect accounts rather than the cash accounts but I have no doubt they are still working to invest in the winning window.

The other part of this that really bothers me is that we are discussing what we assume they are doing vs what Falvey actually said.  Expecting payroll to be lower is not the old salary dump move.  Expecting payroll to be lower is actually a perfectly reasonable assumption considering the roster makeup.  They will get a ton of production from 700k players and they frankly should be commended for that.  

Remember, the last two years they expected payroll to be approximately 33m less but when an opportunity presented itself they spent the money.  Nothing Falvey said rules something like that out.  

Focus on the product, not the payroll.

[chpettit19]

5 minutes ago, Major League Ready said:

If the best thing for the business financially was for them to "eat it" in 2024 ... That's no doubt what they would do.  You are insisting they take a hit because you assume it will destroy their momentum when you don't know what they will plan to do and none of us knows what will actually be done.  This absurd conjecture would not be tolerated in an actual business environment.  Spending $33M on Correa produced 1.1WAR and there are endless examples around the league.  While spending is obvious advantageous, it's obviously no sure thing.  I bet your employer would like it if you were willing to work for less than market rate.  Players act in their financial best interests.  Your expectation / insistence that a business does not is fanatical.

 

BTW ... Any junior level financial analyst could construct a revenue estimate for the twins that was relatively accurate.  IDK about Spotrac but Statista has a subscription service and their numbers are pretty close to Spotrac.  The whole I don't care about legit is also crude thinking.

I'm a fan. That's short for fanatic. I'm supposed to be fanatical. So I'm glad I'm being what I'm supposed to be.

BTW...Any junior level financial analyst could make it look publicly like their company is making less than they actually are. I wonder which junior level financial analyst would have the upper hand. The one with the actual books or the one with the "reported" (that's a direct quote from your precious "subscription service") operating numbers?

[Major League Ready]

16 minutes ago, chpettit19 said:

I'm a fan. That's short for fanatic. I'm supposed to be fanatical. So I'm glad I'm being what I'm supposed to be.

BTW...Any junior level financial analyst could make it look publicly like their company is making less than they actually are. I wonder which junior level financial analyst would have the upper hand. The one with the actual books or the one with the "reported" (that's a direct quote from your precious "subscription service") operating numbers?

Yes, we are fans but you are far too smart and analytically inclined to allow bias to influence conclusions to this degree.  Like I said earlier, Atlanta has at least a $250M revenue advantage.  It takes very little financial acumen to conclude the two organizations will be run differently out of necessity.  

It's not that easy to misrepresent revenue for a baseball team.  The sources are not complicated unless you think their is a conspiracy on attendance.  The TV revenue is public record because it's paid out by public companies and the distribution model is public.  Sponsorships are paid by public companies so those records are easy to verify.  

[chpettit19]

5 minutes ago, Jocko87 said:

And my suspicion is that they already “ate it” in 22 and 23.  There is room in the bounds of the rumored numbers that brings a championship roster to spring training next year.  They will likely have to spend from the prospect accounts rather than the cash accounts but I have no doubt they are still working to invest in the winning window.

The other part of this that really bothers me is that we are discussing what we assume they are doing vs what Falvey actually said.  Expecting payroll to be lower is not the old salary dump move.  Expecting payroll to be lower is actually a perfectly reasonable assumption considering the roster makeup.  They will get a ton of production from 700k players and they frankly should be commended for that.  

Remember, the last two years they expected payroll to be approximately 33m less but when an opportunity presented itself they spent the money.  Nothing Falvey said rules something like that out.  

Focus on the product, not the payroll.

It's really easy to say "focus on the product, not the payroll" when the product may actually be getting good. What about the product for nearly all of the 2010s? Do you think the Pohlads were "eating it" for all those years when focusing on the product was not so appealing or do you think they made a whole bunch of money off those horrible teams?

I also think it's a huge stretch to think their 2023 payroll was 33m over what they thought it was going to be. You think they were expecting to run out a 122ish mil payroll in 2023, but were offering Correa a massive deal from the beginning of the offseason? They were trying to sign him from the jump so I find it very hard to believe they weren't planning for a payroll well north of 120 mil.

[Major League Ready]

25 minutes ago, Jocko87 said:

And my suspicion is that they already “ate it” in 22 and 23.  There is room in the bounds of the rumored numbers that brings a championship roster to spring training next year.  They will likely have to spend from the prospect accounts rather than the cash accounts but I have no doubt they are still working to invest in the winning window.

The other part of this that really bothers me is that we are discussing what we assume they are doing vs what Falvey actually said.  Expecting payroll to be lower is not the old salary dump move.  Expecting payroll to be lower is actually a perfectly reasonable assumption considering the roster makeup.  They will get a ton of production from 700k players and they frankly should be commended for that.  

Remember, the last two years they expected payroll to be approximately 33m less but when an opportunity presented itself they spent the money.  Nothing Falvey said rules something like that out.  

Focus on the product, not the payroll.

They did get $30M in BAM money for 23 and then we landed Correa late.  I am guessing these two factors are why we saw the record payroll.  They looked ahead to 24 knowing a lot of money would roll of and they could deal Kepler / Polanco or decline their options so there was no way they would get stuck without an out in 24.

[chpettit19]

3 minutes ago, Major League Ready said:

Yes, we are fans but you are far too smart and analytically inclined to allow bias to influence conclusions to this degree.  Like I said earlier, Atlanta has at least a $250M revenue advantage.  It takes very little financial acumen to conclude the two organizations will be run differently out of necessity.  

This is a great conclusion to our back and forth on this thread. For the 4th time now I get to tell you I'm not asking them to spend as much as Atlanta. You speak about my bias, but you can't even get out from behind yours to read what I'm actually saying despite me saying it 3 times previously. I want them to run their team better. I want them to maximize the potential in this market. I'm not asking them to blindly spend the same as Atlanta. I have argued from the very beginning that they'd still be below Atlanta even if they do what I'd like them to do. Yes, Atlanta has a revenue advantage, but the size of that advantage is because of how they run their team and because they've maximized the Atlanta market. That is what I'm asking the Twins to do. Run your team better so you can actually maximize this market. It takes very little vocabulary acumen to conclude that run and spend are two different words, yet here we are with me telling you for the 4th time that I'm not asking them to spend like Atlanta. They have to spend differently out of necessity, they don't have to be run differently.

[Jocko87]

2 hours ago, chpettit19 said:

It's really easy to say "focus on the product, not the payroll" when the product may actually be getting good. What about the product for nearly all of the 2010s? Do you think the Pohlads were "eating it" for all those years when focusing on the product was not so appealing or do you think they made a whole bunch of money off those horrible teams?

I also think it's a huge stretch to think their 2023 payroll was 33m over what they thought it was going to be. You think they were expecting to run out a 122ish mil payroll in 2023, but were offering Correa a massive deal from the beginning of the offseason? They were trying to sign him from the jump so I find it very hard to believe they weren't planning for a payroll well north of 120 mil.

When fans vote with their wallets do you think they do it based on the payroll or the product? 

I named two specific years I believe they ate it, I don't know why you bring the 2010s into the equation except to change the conversation.  It is a interesting comparison but like everything else we are discussing, imperfect information keeps us from knowing how much of the 2010s was the Pohlads or Terry Ryan.  As we get further away, that line is murkier, especially as we see what the current front office is able to accomplish with the same Pohlads.

The current front office is the topic though, so lets stick to that.  To answer the specific question, no, I don't know how much the overspend in 23 was.  I'm pretty sure its at least 11m (Gallo) could be 21m (Gallo and Vazquez) or it could be 33m (paying Correa is the only option to spend that much)  Who knows.  I am quite sure they were over what ever budget they set though.  As they are always flexible, that number would change as well.

2 hours ago, chpettit19 said:

I want them to run their team better. I want them to maximize the potential in this market.

I'm glad you finally said this so clearly.  Your main complaints have been consistently around payroll so it can be difficult to get to the core of your issues.  What I, and I believe MLR, are trying to say is that they are doing a pretty damn good job running this team.  If we focus on what this front office has done to put themselves in the position to have all these options its pretty impressive.  Have they been perfect?  No, but no executive is.  They didn't Forrest Gump their way to this roster. Executive level positions aren't generally evaluated on individual decisions but more direction and vision.  They had a nice bump with the 2019 squad but this is fully their organization now.  One of the things I see that is very impressive is that they are adjusting the tactics with the changing conditions.  This offseason presents a new condition and new challenge.  At the end of the day if they are presented with another amazing opportunity to improve the team I believe the money would be there.  With not much that I personally like in free agency other than a couple unobtainables I'm fine with payroll going down.

As the kids say

[chpettit19]

50 minutes ago, Jocko87 said:

When fans vote with their wallets do you think they do it based on the payroll or the product? 

I named two specific years I believe they ate it, I don't know why you bring the 2010s into the equation except to change the conversation.  It is a interesting comparison but like everything else we are discussing, imperfect information keeps us from knowing how much of the 2010s was the Pohlads or Terry Ryan.  As we get further away, that line is murkier, especially as we see what the current front office is able to accomplish with the same Pohlads.

The current front office is the topic though, so lets stick to that.  To answer the specific question, no, I don't know how much the overspend in 23 was.  I'm pretty sure its at least 11m (Gallo) could be 21m (Gallo and Vazquez) or it could be 33m (paying Correa is the only option to spend that much)  Who knows.  I am quite sure they were over what ever budget they set though.  As they are always flexible, that number would change as well.

I'm glad you finally said this so clearly.  Your main complaints have been consistently around payroll so it can be difficult to get to the core of your issues.  What I, and I believe MLR, are trying to say is that they are doing a pretty damn good job running this team.  If we focus on what this front office has done to put themselves in the position to have all these options its pretty impressive.  Have they been perfect?  No, but no executive is.  They didn't Forrest Gump their way to this roster. Executive level positions aren't generally evaluated on individual decisions but more direction and vision.  They had a nice bump with the 2019 squad but this is fully their organization now.  One of the things I see that is very impressive is that they are adjusting the tactics with the changing conditions.  This offseason presents a new condition and new challenge.  At the end of the day if they are presented with another amazing opportunity to improve the team I believe the money would be there.  With not much that I personally like in free agency other than a couple unobtainables I'm fine with payroll going down.

As the kids say

No, the conversation has been about the Twins organization, not the FO. The FO doesn't set the payroll budget they just work within it. The FO doesn't control the business side of things. The payroll budget is set by the Pohlads and Dave St Peter.

For what it's worth the Twins reported a negative 27 million operating income in 2023 and a positive 10 million in 2022. If you're one who believes the public numbers there's your answer. Public numbers suggest a 7 mil loss in 2003 and 500k loss in 2004. From the public numbers I'm told to believe the Twins have a positive $257.9 million operating income since 2002. And that's with a $49 million loss in 2020 from the pandemic. Again, all very rough numbers that I don't think much weight should be placed because there are far too many ways companies can work their books to make things look how they want so without the actual books those numbers don't mean much to me. But when you say "worry about the product, not the payroll" it rings incredibly hollow to me because the Pohlads appear to do nothing but worry about the payroll so why shouldn't I?

I have said "the way they run the organization" at least 6 times in this thread. I've mentioned maximizing their market numerous times. I've said I don't expect them to operate at a loss consistently, I expect them to run their organization in a way that allows them to maintain payrolls consistent with the market's potential. I've provided the CBA determined market potential as compared to Atlanta since Atlanta's books are publicly available. I haven't really discussed the FO and their team building at all. Only complaints I've had in this thread about them are that Falvey should've stuck to his usual "the Pohlads are great and provide us with every resource we need" when he was asked about the payroll. My entire complaint has been, from my very first post where I laid out Atlanta's numbers compared to the Twins, that they aren't maximizing the Minnesota market and we should absolutely blame the team for that when they tell us they're going to cut payroll. My expectations are that they should do better to earn our hard earned money, and valuable time, instead of cruising along making hundreds of millions of dollars from a publicly funded stadium while providing far more bad product than good, and then when they finally get what may be a good product cutting resources to that product.

Free agency isn't the only way to spend money. There's a bunch of trades on this site that fans are saying "yeah, it'd be nice but we can't afford that player." Like Pete Alonso for example. They've already lost their #2 pitcher. Fans are suggesting they fill that hole by trading guys who reasonably hit in the 2 and 4 holes in their playoff lineup. Maybe they'll pull a rabbit out of their hat and thread the needle of improving the team while cutting payroll and trading a piece or 2 from the heart of their already not good enough lineup. Odds say that isn't likely. Banking on Lewis and Kirilloff to play more than 100 games, let alone 150 games, in the majors for the first time in either of their lives while producing heart-of-a-playoff-lineup type production is a massive bet. Expecting Wallner to close the massive hole in his swing that covers basically the entire inner third of the plate so he can maintain his production for a full season after the league has found his weakness is a massive bet. Expecting Jeffers to maintain his league best catcher OPS as "the guy" behind the plate is a massive bet. Expecting Bailey Ober to complete just his 2nd healthy professional season ever while maintaining his production is a massive bet. I follow prospects as much as just about everyone, and get all excited for guys to come up, too, but the idea that they don't have much to worry about doesn't make sense to me.

I am worrying about the product. The product won 87 games in a historically bad division while playing fewer than half of their total games against teams that finished above .500. They weren't bad, but the idea that they're on the doorstep of being great doesn't make sense to me. Lewis was hurt again. Kirilloff ended another season on the IL needing surgery. Buxton looks to be closer to retirement than ever being the guy he's shown flashes of being. Miranda cratered. They have to replace the production of the Cy Young runner up. Brock Stewart has to be a lights out late inning guy instead of a 32 year old who hadn't been in the majors since before the pandemic. Thielbar has to be a shutdown lefty again. They need a CFer and legit players behind their injury prone corner infielders. Prospects fail far more than they succeed. 2nd year players fail all the time after teams find their weaknesses. People are acting like this was the Dodgers or Braves who steamrolled through the regular season and just had a hiccup in a short series. They aren't that. And taking resources away when they have real holes that need to be filled hurts their ability to truly improve this team. Doesn't make it impossible. But I'm not going to pretend it isn't a slap in the face to fans whom the Pohlads have made hundreds of millions off with a publicly funded stadium. The team owes the fans better whether people think it makes financial sense for 2024 or not.

[Jocko87]

3 hours ago, chpettit19 said:

No, the conversation has been about the Twins organization, not the FO. The FO doesn't set the payroll budget they just work within it. The FO doesn't control the business side of things. The payroll budget is set by the Pohlads and Dave St Peter.

For what it's worth the Twins reported a negative 27 million operating income in 2023 and a positive 10 million in 2022. If you're one who believes the public numbers there's your answer. Public numbers suggest a 7 mil loss in 2003 and 500k loss in 2004. From the public numbers I'm told to believe the Twins have a positive $257.9 million operating income since 2002. And that's with a $49 million loss in 2020 from the pandemic. Again, all very rough numbers that I don't think much weight should be placed because there are far too many ways companies can work their books to make things look how they want so without the actual books those numbers don't mean much to me. But when you say "worry about the product, not the payroll" it rings incredibly hollow to me because the Pohlads appear to do nothing but worry about the payroll so why shouldn't I?

Quick, what was the payroll in 87?  Or 91?  Or 2019 for that matter?  I don't know, don't care and I'm not looking it up.  Why does it matter?

You keep saying the way they run the organization, I get it, but keep coming back to talk about only money.  And I'm going to be blunt here, talking about it completely incorrectly.  Revenue since 2002 is not a relevant measurement but if I take that number to mean something its approximately a Joey Gallo sized mistake per year.  That's a razor thin margin.  The making hundreds of millions comments are totally without merit, no rational accounting measure could get there.  Every comparison to Atlanta literally makes the Twins looks better, not worse.  If the 2022 (last full year, which does matter) numbers at Statista are to be believed, and its as good as we've got, Twins payroll was 56% of revenue.  The Braves?  43%.  Cheapos.

You are free to vote with your dollars and attention, the same as I do.  I'm telling you as plainly as I can that this is not the hill to die on.   

[Fatbat]

@Jocko87 the braves have been in the playoffs 6 straight years and won a WS. 56% to 43% in the same calendar year doesn’t prove the braves are cheap. It proves that they have a solid business plan, win games, increase fandom and maximize revenue and profits. If only the Twins could do something that was modeled similarly but different and achieve those types of results. 

[Jocko87]

2 minutes ago, Fatbat said:

@Jocko87 the braves have been in the playoffs 6 straight years and won a WS. 56% to 43% in the same calendar year doesn’t prove the braves are cheap. It proves that they have a solid business plan, win games, increase fandom and maximize revenue and profits. If only the Twins could do something that was modeled similarly but different and achieve those types of results. 

I thought the word "cheapos" would emphasize the sarcasm.  My bad.  I would bet good money that a similar run of success would still leave the Twins woefully short on revenue comparatively.

[Fatbat]

30 minutes ago, Jocko87 said:

I thought the word "cheapos" would emphasize the sarcasm.  My bad.  I would bet good money that a similar run of success would still leave the Twins woefully short on revenue comparatively.

I was flip flopping on sarcasm or not.