Costs of Operating a Team.

[Trov]

This is not a post for or against current spending by the Twins, or any team.  I wanted to post about how there is more to the cost of running a team than just player payroll. In MLB there is not set amount that will go to player payroll, but NBA has a 50/50 split, NFL is close to a 50/50 split, of revenue to teams and to players.  Not sure NHL revenue sharing split. MLB is only sport of the major sports that do not do a revenue sharing split, but seems like for a team to feel break even or profitable 50/50 seems fair. 

That being said, the 50 percent that would go to team is not just money in hand, but has to go to other expenses.  When I see people post on here, many seem to forget that.  In baseball, there is not only the MLB player payroll, but all the minor league guys, along with international signings and draft signing bonus money each year.  Minor league is not huge, but at 165 per team on average of 25K per player, that is 4.125 million right there.  That does not include the housing cost the minor league players have now.  Add in the signing bonuses, varies on teams, but Twins was over 12 mil this year.  International signing varies depending on team again, but Twins were in the 6.5 mil pool.  Looking at non MLB player money but minor league guys, and signing bonus money, assuming all was spent, that is about 23 million.  That is just to pay the players that do not play at the MLB level.

Looking to other costs.  It is not free to run the lights at the stadium, which one article I found suggests it will cost over 1 mil for that.  There is also cost of all the rank and file employees, not sure how much that would be, but lets assume 100 employees averaging 100K, that may be way low or high not sure what an employee gets paid there, but if close that is 10 million there, but the team also has to pay taxes for like payroll taxes, unemployment taxes and the like as well.  We should assume they give out benefits too like health care and retirement perks, like most employees, that adds more expenses. That includes the club house guys, the grounds crew, the ticket sales people, the janitors that clean the offices, the travel people so on and so forth.  Then there is the actual travel expenses at each level.  At MLB level, lets assume there are like 40 people that travel with team, and they all get their own room, maybe some share.  If on average each room costs $200 a night, might be low in some cities and high in others, but that is 8K a night, and estimating 90 nights, 81 road games and some off days on road, that is 720K, add in per diam estimate 100 a day, maybe more, that is 360k.  So over 1 mil just for basic travel expenses.  Then there is the club house meals, the cost of actual planes and buses to and from games on the road.  This does not include the cost in minor league levels as well.

Then there is the cost of front office personnel who make millions, coaches and managers at each level, millions more. There is the cost of advertising, cost of giveaways, and even the cost of basic overhead like printer paper, office equipment and so on.  When you operate a business at the level of MLB there are a lot of little expenses that start to add up to very large expenses. 

I am not saying any team is overspending or underspending on players, not defending or attacking the Twins payroll.  However, I read comments and articles estimating how much money the Twins may have to spend and they look at just MLB player payroll as the only expense of the team.  Many people talk about how after getting a new TV deal Twins did not spend any more money, but it is possible that money that came in, which is only half because other half is shared with the rest of the league, may have mostly been spoke for in other expenses spread across many things. Recently there was talk about team getting up to 15 mil, if it helps product on field, and that may be more tied to spending on players payroll, as the MLBPA agreed to take from competitive balance tax to do that. But other income sources may have been earmarked for other expenses, and to assume it can be spent on something else is wrong.