Will the Twins Be Helped By MLB and MLBPA’s Revised Television Deal?

[Cody Christie]

The team’s television issues have impacted Minnesota fans throughout the 2024 season. Will a revised plan for shared revenue from MLB help the Twins for this season and beyond?

Image courtesy of Troy Taormina, USA Today Sports

Multiple outlets are reporting that MLB and the MLBPA have agreed to alter the collective bargaining agreement. Under the amended rules, teams who saw media revenue decline are eligible for what’s being called a “media disruption distribution.” Money will be pulled from the league’s portion of the competitive-balance tax revenues, collected from teams with the largest payrolls. Eligible teams with lost TV revenue will be eligible for up to $15 million each, with the league expected to cap payouts at a total of $75 million. It is a one-year deal, meant to serve as a bridge to help teams for the 2024 season.

The union wrote a memo to players that justified the move. “We believe this agreement should positively affect the player market by softening the impact of revenue declines, by increasing the number of clubs who have monies to spend, and by undermining the ability of clubs to weaponize recent developments in RSN markets,” it reads, in part.

So, which teams are eligible? According to reports, eligible teams are those “whose local media revenue declined from the year prior (2023) or from the two years prior (2022).” Many of these teams are associated with the regional sports networks associated with Diamond Sports (Bally-branded networks), or those under the Warner Brothers-Discovery umbrella. 

The San Diego Padres and Arizona Diamondbacks were dropped by Diamond Sports last season, so they are two of the teams that will, apparently, benefit. The Twins were among a trio of teams (along with the Cleveland Guardians and Texas Rangers) that agreed to pay cuts on one-year deals with Diamond. The Colorado Rockies, Houston Astros, Seattle Mariners, and Pittsburgh Pirates were part of the Warner Brothers-Discovery group, making them eligible for this distribution, too.

The MLBPA’s memo also said, “Under MLB’s proposal, the clubs that have been affected by declining local media revenues caused by regional sports network (RSN) developments would benefit from this expanded flexibility. All clubs with declining local media revenue are eligible to receive monies from the fund, regardless of revenue sharing status, market size or payroll level.”

From the Twins’ perspective, there are no guarantees the increased revenue will be spent on the current roster. Minnesota’s ownership group slashed payroll by $30 million this winter while blaming the team’s expiring television deal. Eventually, the Twins took a one-year deal to return to Diamond Sports because it brought in an estimated $40-45 million. Instead of reinvesting a portion of that income on the roster, ownership seems to have pocketed that money. A similar path could be followed with this new “media disruption distribution,” because MLB can’t force teams to spend money in the middle of the season.

Next week’s trade deadline got an added level of intrigue with the new television news. Rumors have swirled that the Twins might be interested in adding a starting pitcher on an expiring contract, something this front office has previously avoided. Minnesota might also be right up against their payroll threshold, and this revenue influx might allow the team to add a player with a higher salary, since the team would only be on the hook for a small portion of their overall deal.

Regional sports networks are disappearing, so it's good to see that MLB and the MLBPA were able to find a solution for the 2024 season. There is a chance some of these issues will resurface next season, and then the two sides must decide on a long-term path to address the difficulties surrounding the television and streaming landscape.

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What are your thoughts on this change to the CBA? Do the Twins have room to add a player with a higher salary at the trade deadline? Leave a comment and start the discussion.

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[chpettit19]

Teams are required to use these funds "in an effort to improve performance on the field." Will be interesting to see which teams take on salary in trades next week and which ones use this money in other ways to improve their on field performance.

[Parfigliano]

Will the teams getting this money be named publicly including the amount recieved?  If say TC doesnt get any of this money does that mean that their TV rights money did not in fact decline in any significant amount?

[chpettit19]

7 minutes ago, Parfigliano said:

Will the teams getting this money be named publicly including the amount recieved?  If say TC doesnt get any of this money does that mean that their TV rights money did not in fact decline in any significant amount?

Will be fascinating to see if they release the numbers. My bet would be that they don't, but I really hope they do. The teams do everything they can to keep all their financials as far under wraps as possible. But I'd really like to see who gets money and what kind of changes we see in their spending that could possibly be tied to it.

[Jocko87]

Obviously the bent on this will be "they got $15m and didn't spend it!" 

Just your daily reminder we have no idea and almost no chance of knowing how much money was received and spent.  Just like the off-season TV money.

It could theoretically allow them to trade for a player without adding salary but the money allowed them to make a trade without the other team taking on money for more prospects.  We would never know, but that seems like a pretty possible scenario that would satisfy MLB requirements behind the scenes. 

My read on this is that the TV revenue issue is worse than most think.  If its at the level that MLB thinks they need to step in for multiple teams and $5 to 15m makes the difference the margins are too tight for comfort in a lot of places.

[Rosterman]

They can buy more television sets to show the games at their games.

 

[BH67]

"Eventually, the Twins took a one-year deal to return to Diamond Sports because it brought in an estimated $40-45 million. Instead of reinvesting a portion of that income on the roster, ownership seems to have pocketed that money. A similar path could be followed with this new “media disruption distribution,” because MLB can’t force teams to spend money in the middle of the season."

Given the uncertainty over future TV revenue, I would have pocketed that money and had it available for 2025. Local governments would call this non-recurring revenue (much like the American Recovery Plan Act), and it is prudent to have that in store to ensure payroll stability for next season.

However, this new infusion should compel the Twins to make significant talent upgrades specifically for the 2024 playoff run.

Detroit just beat Cleveland  Four and a half back, four in the loss column.

[Linus]

Has MLB stated when the amount will be determined and when the clubs will be notified?  If they don’t specifics before the deadline it won’t do much good for this year. 

[Craig Arko]

1 minute ago, Linus said:

Has MLB stated when the amount will be determined and when the clubs will be notified?  If they don’t specifics before the deadline it won’t do much good for this year. 

No, but I suspect the teams affected will know specifics before this weekend is out.

[Linus]

1 minute ago, Craig Arko said:

No, but I suspect the teams affected will know specifics before this weekend is out.

That would make sense. Fingers crossed it facilitates a trade for a good starter. 

[Craig Arko]

1 minute ago, Linus said:

That would make sense. Fingers crossed it facilitates a trade for a good starter. 

Also may delay some trades until the last minute as the dynamics change.

[Linus]

4 minutes ago, Craig Arko said:

Also may delay some trades until the last minute as the dynamics change.

Will be interesting to watch it unfold. If the Twins pocket this money, well let’s just say Twins Daily will be quite active. I don’t have any idea what they will do but I have no doubt that it wouldn’t bother them a bit to take the money and do nothing. 

[Craig Arko]

13 minutes ago, Linus said:

Will be interesting to watch it unfold. If the Twins pocket this money, well let’s just say Twins Daily will be quite active. I don’t have any idea what they will do but I have no doubt that it wouldn’t bother them a bit to take the money and do nothing. 

Asst. GM Correa’s shopping list may play into this. :)

[Parfigliano]

2 hours ago, Linus said:

Will be interesting to watch it unfold. If the Twins pocket this money, well let’s just say Twins Daily will be quite active. I don’t have any idea what they will do but I have no doubt that it wouldn’t bother them a bit to take the money and do nothing. 

They pocketed the TV money and I bet it will be the same if they get this money.

[jorgenswest]

That is several teams with a cap of 75 million. I wouldn’t expect 15 million. I don’t think it will move the needle much.

[Brandon]

I wonder how much revenue the Twins lost this year with the TV contract blowing up on them.  And the declining attendance from last year.  I’m guessing in the 40-60 million range.  The Twins only cut 27 million.  Hopefully they are at a point where they won’t have to drop payroll further.  

[whosafraidofluigirussolo]

47 minutes ago, Brandon said:

I wonder how much revenue the Twins lost this year with the TV contract blowing up on them.  And the declining attendance from last year.  I’m guessing in the 40-60 million range.  The Twins only cut 27 million.  Hopefully they are at a point where they won’t have to drop payroll further.  

The truism is that teams tend to run player payroll at about half of revenue, right? So the cut of $27M they made to payroll already would be right in line if the revenue loss was $40-60M.

[Fatbat]

If I were the twins FO. Id sit down with existing players with a bonus plan based on 2nd half and playoff incentives.  String that carrot and pay the money when the WS is won. Id also buy more pitching. 

[old nurse]

11 hours ago, jorgenswest said:

That is several teams with a cap of 75 million. I wouldn’t expect 15 million. I don’t think it will move the needle much.

Nine teams listed in the story so that would average out to 8 million a team. 

[Major League Ready]

19 hours ago, chpettit19 said:

Teams are required to use these funds "in an effort to improve performance on the field." Will be interesting to see which teams take on salary in trades next week and which ones use this money in other ways to improve their on field performance.

That's a pretty big part of this story.  I did not see this information in the article so I assume you saw another article or news bulletin.  Can you provide a link?  It would be great to have all the information that has been reported.

[dxpavelka]

"Regional sports networks are disappearing"  I would assume the revenue they previously generated is going to be gone as well.  Not a good thing for a team like the Twins.

 

[dxpavelka]

11 minutes ago, Major League Ready said:

That's a pretty big part of this story.  I did not see this information in the article so I assume you saw another article or news bulletin.  Can you provide a link?  It would be great to have all the information that has been reported.

Would likely need to get this off the ground by the trade deadline to accomplish that goal.  Stuff seldom moves that quickly.

[chpettit19]

8 hours ago, Fatbat said:

If I were the twins FO. Id sit down with existing players with a bonus plan based on 2nd half and playoff incentives.  String that carrot and pay the money when the WS is won. Id also buy more pitching. 

Players already get playoff bonuses. It's part of the CBA. Players get a cut of playoff revenue.

[Fire Dan Gladden]

18 hours ago, BH67 said:

"Eventually, the Twins took a one-year deal to return to Diamond Sports because it brought in an estimated $40-45 million. Instead of reinvesting a portion of that income on the roster, ownership seems to have pocketed that money. A similar path could be followed with this new “media disruption distribution,” because MLB can’t force teams to spend money in the middle of the season."

Given the uncertainty over future TV revenue, I would have pocketed that money and had it available for 2025. Local governments would call this non-recurring revenue (much like the American Recovery Plan Act), and it is prudent to have that in store to ensure payroll stability for next season.

However, this new infusion should compel the Twins to make significant talent upgrades specifically for the 2024 playoff run.

Detroit just beat Cleveland  Four and a half back, four in the loss column.

To call this non-recurring revenue would be saying that the Twins will not have a television deal next year.  We know that is false.  Just like last year, we know the Twins will have some sort of television revenue.  This year it was $40+ million (and that was low).  Next year it would be that at it's worst.

The Twins wonder why attendance is down in when they are on pace to win 90 games?  Keep pocketing 100% of that revenue, instead of re-investing a portion of that back into salary...

[BH67]

5 minutes ago, Fire Dan Gladden said:

To call this non-recurring revenue would be saying that the Twins will not have a television deal next year.  We know that is false.

The death of regional sports networks necessitates a new media model with little understanding of what it looks like, or whether consumers can or will access it. The Pac-12 Conference has evaporated for this reason. Spending on a large scale is imprudent until the amount and duration of funds from the new model are certain.

[Finlander]

MLBPA should have only agreed to this if the receiving teams and respective distribution amounts are made public.

[Fire Dan Gladden]

1 hour ago, BH67 said:

The death of regional sports networks necessitates a new media model with little understanding of what it looks like, or whether consumers can or will access it. The Pac-12 Conference has evaporated for this reason. Spending on a large scale is imprudent until the amount and duration of funds from the new model are certain.

When the Twins were TV free-agents, ownership cried they needed to lower payroll due to no television deal.  Everyone knew the chances of the Twins entering into the 2024 season without some sort of TV deal were zero.  The Twins got their deal.  The Twins will probably scream this again this offseason as there are already rumblings of further payroll reductions (and because they believe Twins fans are dumb and will always return) even though we all know there will be some sort of television deal again next year.

If the Twins followed their past pronouncements and spent roughly %50 of this year's TV money, that is another $20m that could be spent on Starting Pitching.

[TopGunn#22]

This is a very interesting agreement and lots of good comments regarding it.  I just can't believe that MLB or the MLBPA would agree to any of this extra income unless there was a specific stipulation that this revenue be spent to improve a team's roster.  They simply cannot just let teams pocket this money (as the Pohlad's are most likely to want to do).

EVERYTHING about this process should be made public.  No team getting money should be able to just pocket it.  There are nine teams that fall within the parameters.  The Rockies are the only team that is a certainty NOT to take advantage of this.  That leaves 8 teams who could.  

The Twins will have no excuses if they fail to take advantage of this.  They need a pitcher to slot in at #3, behind Lopez and Ryan and ahead of Ober and SWR.  This "pennies from heaven" revenue gives the Pohlad's a reason to spend a little to improve the ballclub.  

If, after this possible shot in the arm with potential revenue the Pohlad's remain averse to spending additional money, there is still a pitcher in Mexico who could be had for the league minimum and who would probably relish an opportunity to pitch in meaningful games against Cleveland.  

[Richmond Dude]

I'm still convinced that the Twins payroll cut this year wasn't about TV, but about 2025 and 2026.  We have an extremely good core of young players.  They are going to need to be paid, either by negotiated contracts or arbitration.  I'd rather be low this year (when we could afford it due to the talent), then have to let Royce Lewis go in 2026 because we couldn't afford his first arbitration contract due to previously overspending.

[Major League Ready]

6 hours ago, dxpavelka said:

Would likely need to get this off the ground by the trade deadline to accomplish that goal.  Stuff seldom moves that quickly.

That's why I asked for the source of the quote supplied by chpettit19 which indicates there are stipulations that require the money to be spent on improving the team.  He tends to be well-informed, so I am inclined to believe the requirements to get these funds have been determined.  I will do some digging on my own this weekend.