Ripple Effects: This Team Wasn’t Built For This Payroll

[nicksaviking]

14 minutes ago, TheLeviathan said:

I think the statement in the middle of this excellent article is the key:

Say what you will about the moves made this offseason (they weren't good other than Santana) but the position they were in was completely unexpected.  The FO was assuming a 150-160M payroll and the flexibility that would have came with that.  Slashing the payroll took all manueverability from them and their scramble to add to the roster failed.

Ownership knee-capped the franchise just when they finally had the place starting to buzz again.  We talk about "winning fixes all" but this team was winning in July and nobody was showing up.  The fanbase is exhausted with the Pohalds, this offseason broke them.

Right, they go from 'We're trying to make a run, go ahead and sign Correa, Buxton and Lopez' to 'My unqualified nephew wants to run things now and he's going to cut payroll, what we told you to do last year isn't going to impact the club will it?'

[Major League Ready]

56 minutes ago, Greggory Masterson said:

To be clear, is your issue that I described a $30 million pay cut, based on a rounding from the total payroll allocations as available from Spotrac in both years (rounding 156.1 to 160 and 130.9 to 130) instead of a $26 million cut from an opening day salary of 153.7 to 127.3? When talking about an approximate payroll for 2025, it’s helpful to describe it round numbers that can be taken as more of an idea than an exact total. I’d appreciate the grace to not assume some sort of nefarious intent on my end.

It's sloppy and the writers here have a history of presenting numbers that are not accurately portrayed.  It's simply a misrepresentation to use year-end numbers to represent one extreme and opening day numbers for the other comparison.  You have the numbers, why not provide the exact numbers instead of rounding by $6.3M.   This would be subject to pretty harsh critique in an actual management analysis.  In the real world, any anomalies would also be reported.   Once again, no mention of the significant anomaly in the form of $30M in BAM money.  In any business environment, this would be highlighted as it is a very significant and very unusual circumstance that requires consideration.  In the dozens of TD articles about spending this year, this significant financial anomaly was continually ignored.  I guess it would not get readers nearly as wound up if you wrote the twins had a $30M financial windfall last year and what do you know they spent $30M less this year.  

With all of the angst over spending, how is it possible that there has never been an article that compares the Twins percentage of spend to the rest of the league?

 

[nicksaviking]

16 minutes ago, Old fox said:

The Pohlads are bankers which are considerably different from a businessman. They don’t even compare closely. 

Not Joe, they gave him the team to run because he didn't like banking. He likes running media companies into the ground instead.

[nicksaviking]

10 minutes ago, Major League Ready said:

It's sloppy and the writers here have a history of presenting numbers that are not accurately portrayed.  It's simply a misrepresentation to use year-end numbers to represent one extreme and opening day numbers for the other comparison.  You have the numbers, why not provide the exact numbers instead of rounding by $6.3M.   This would be subject to pretty harsh critique in an actual management analysis.  In the real world, any anomalies would also be reported.   Once again, no mention of the significant anomaly in the form of $30M in BAM money.  In any business environment, this would be highlighted as it is a very significant and very unusual circumstance that requires consideration.  In the dozens of TD articles about spending this year, this significant financial anomaly was continually ignored.  I guess it would not get readers nearly as wound up if you wrote the twins had a $30M financial windfall last year and what do you know they spent $30M less this year.  

With all of the angst over spending, how is it possible that there has never been an article that compares the Twins percentage of spend to the rest of the league?

 

Maybe because most of the other teams didn't also reduce their payroll by 30M due to the BAM money that was a one time earning?

If that was a consideration, why would they have given the front office the green light to sign Correa, Buxton and Lopez to MULTI year deals? Wouldn't they instead have said, 'This is a one time situation, go ahead and sign one one guy to a 1 year 30M deal'?

[Major League Ready]

22 minutes ago, nicksaviking said:

Maybe because most of the other teams didn't also reduce their payroll by 30M due to the BAM money that was a one time earning?

If that was a consideration, why would they have given the front office to the green light to sign Correa, Buxton and Lopez to MULTI year deals? Wouldn't they instead said, 'This is a one time situation, go ahead and sign one one guy to a 1 year 30M deal'?

For starters, everyone is assuming the payroll is not going up a dime or even going down.  Let's see what actually happens before we carve this in stone.  They also have a lot of cheap talent and quite a bit more that is not far off.  That allows them to spend on those three players.  They have Vazquez, Paddack, and Castro coming off next year and Correa's salary goes down $4.5M.  That's roughly $27.5M and that pays for a lot of arbitration increases for the next couple years.  They will also add  Rodriquez, Jenkins, and Keaschall in the next couple of years.  They will likely displace higher priced (arbitration eligible) players.  So, the premise that they won't be able to keep this team together because of the three big salaries is simply not correct.  

I almost forgot Dobnak.  Make it at least $30M coming off the books next year.

[S Bart]

1 hour ago, Parfigliano said:

3 batting crowns in 3 years in 2 different leagues with 3 different teams.

This tells me todays baseball analytics doesnt value singles hitters.

I am a Twins devotee but live in SD (MLB team with the best record since the all-star break). I can verify that the Padre fans enjoy having Arraez .314 avg. and Solano .286 avg. as part of the team. The manager especially likes Arraez.

“Wow, what an amazing hitter,’’ Padres manager Mike Shildt said. “What an amazing guy. He’s been a huge part of this group.’’

[Mike Sixel]

6 minutes ago, Major League Ready said:

For starters, everyone is assuming the payroll is not going up a dime or even going down.  Let's see what actually happens before we carve this in stone.  They also have a lot of cheap talent and quite a bit more that is not far off.  That allows them to spend on those three players.  They have Vazquez, Paddack, and Castro coming off next year and Correa's salary goes down $4.5M.  That's roughly $27.5M and that pays for a lot of arbitration increases for the next couple years.  They will also add  Rodriquez, Jenkins, and Keaschall in the next couple of years.  They will likely displace higher priced (arbitration eligible) players.  So, the premise that they won't be able to keep this team together because of the three big salaries is simply not correct.  

I almost forgot Dobnak.  Make it at least $30M coming off the books next year.

Don't you usually say that a team can't win with 40% of its payroll on 3 players? Or am I misremembering?

[nicksaviking]

1 hour ago, Major League Ready said:

For starters, everyone is assuming the payroll is not going up a dime or even going down.  Let's see what actually happens before we carve this in stone.  They also have a lot of cheap talent and quite a bit more that is not far off.  That allows them to spend on those three players.  They have Vazquez, Paddack, and Castro coming off next year and Correa's salary goes down $4.5M.  That's roughly $27.5M and that pays for a lot of arbitration increases for the next couple years.  They will also add  Rodriquez, Jenkins, and Keaschall in the next couple of years.  They will likely displace higher priced (arbitration eligible) players.  So, the premise that they won't be able to keep this team together because of the three big salaries is simply not correct.  

I'm not arguing about what the payroll will be or who will be on it. I'm arguing against the idea that the BAM money had anything to do with it, because if that was the reason for the bump, and it was supposed to be a one time deal, they wouldn't have given out those other long term deals.

I'll be honest, I'm stewing right now after listening to this podcast:

https://www.skornorth.com/episode/minnesota-twins-are-tone-deaf-addressing-their-2024-season-collapse/

As provided by another one of our posters:

I was in the minority, I LIKDED Jim Pohlad, at least as far as owners go. I thought he was the best this organization ever had so I did not like Joe Pohlad getting the gig. I had no clue about Joe's business background, which is frightening to say the least. The family gave him a 28M radio station to run and then they had to turn around and sell it for 2M a couple years later? He was given ANOTHER radio station to run and they had to sell it for ***$1*** soon after? Jim Pohlad says that his door is open and he's willing and able to help and give advice to Joe but Joe has never once reached out to him? This all sounds like a kid given $500 and a Robinhood account to play penny stocks.

This is troubling and embarrassing, but mostly just troubling. The swift change in philosophy seems much less likely to be due to unforeseen financial changes (TV money? BAM money? how could these things be unforeseen?!?) than it does due to someone wholly unqualified to running the show.

 

[KGB]

3 hours ago, chpettit19 said:

The "front office" we talk about is a separate entity than the one that deals with revenue and finances. Derek Falvey is likely not aware at all of what the revenue is. That's Dave St Peter's job. DSP and the Pohlads aren't sharing their financials with more people than they have to. They don't have to share with Falvey. Falvey gets told a general range of what he can spend that year, and the closer he gets to the max of that range, or the bigger his proposed deals get, the more he has to check with Pohlad to sign off on things. Derek Falvey wouldn't have insights into what future payrolls are going to be beyond what the Pohlad's and Dave St Peter tell him. He's not privy to revenue numbers. And neither is Forbes when it comes to the numbers that St Peter and the Pohlads are actually making payroll decisions on. 

If this is true, we have found the problem. If Derek Falvey has no idea of the revenue, which drives his payroll, then he shouldn't be in his position.

[Whitey333]

Nice article and great comments by all.  The Twins actually drew roughly the same amount of fans as the previous year.  The 300,000 reduction came from Twins estimation of attendance increase from 2023-2024.  Figuring the nice 2023 season would increase ticket sales.  But they shot themselves in the foot or mouth lol.  So they budgeted 2024 on an extra 300,000 in attendance to  a total of about 2.2 million not the 1.9 they actually drew. 

Keeping high priced players like Correa, Buxton, Lopez may be impossible since they take up so much of team payroll.  A frustrating fact is that many of the prospects they plugged in for injured players etc performed very poorly.  If that continues the future of the franchise looks bleak.

[Patzky]

FWIW, Popkins is gone as hitting coach. His contract wasn't renewed.

[chpettit19]

10 minutes ago, KGB said:

If this is true, we have found the problem. If Derek Falvey has no idea of the revenue, which drives his payroll, then he shouldn't be in his position.

Revenue is not his job. Baseball is his job. Derek Falvey doesn't make decisions on revenue or where to spend it. The Pohlads and Dave St Peter give him an allowance and let him spend it how he sees fit. The business and baseball sides are not the same thing. Derek Falvey is not in charge of any business decisions. He's in charge of baseball decisions. He had no part in cutting the payroll. Not his job.

[Major League Ready]

1 hour ago, nicksaviking said:

I'm not arguing about what the payroll will be or who will be on it. I'm arguing against the idea that the BAM money had anything to do with it, because if that was the reason for the bump, and it was supposed to be a one time deal, they wouldn't have given out those other long term deals.

I'll be honest, I'm stewing right now after listening to this podcast:

https://www.skornorth.com/episode/minnesota-twins-are-tone-deaf-addressing-their-2024-season-collapse/

As provided by another one of our posters:

I was in the minority, I LIKDED Jim Pohlad, at least as far as owners go. I thought he was the best this organization ever had so I did not like Joe Pohlad getting the gig. I had no clue about Joe's business background, which is frightening to say the least. The family gave him a 28M radio station to run and then they had to turn around and sell it for 2M a couple years later? He was given ANOTHER radio station to run and they had to sell it for ***$1*** soon after? Jim Pohlad says that his door is open and he's willing and able to help and give advice to Joe but Joe has never once reached out to him? This all sounds like a kid given $500 and a Robinhood account to play penny stocks.

This is troubling and embarrassing, but mostly just troubling. The swift change in philosophy seems much less likely to be due to unforeseen financial changes (TV money? BAM money? how could these things be unforeseen?!?) than it does due to someone wholly unqualified to running the show.

 

I think our angles are just slightly misaligned here.  I am sure you are correct that BAM money did play a role in the decision to sign those long-term deals.  They had never reached these levels without BAM and revenue was not growing substantially from other sources.   They knew (I hope) that they were not going to maintain a $152M payroll.  It would appear they felt they could absorb the Buxton, Correa, and Lopez contracts and still retain their players as they enter arbitration.  That's why a pointed out the $30M coming off next year which will provide the funding for arbitration increases.  This was the point of the article, was it not?  Isn't the premise of the article that these three contracts prohibit keeping the team together? 

The other possibility point of the article is that we should never sign high-end talent.  Is this how people want the team run?  

[nicksaviking]

21 minutes ago, Major League Ready said:

I think our angles are just slightly misaligned here.  I am sure you are correct that BAM money did play a role in the decision to sign those long-term deals.  They had never reached these levels without BAM and revenue was not growing substantially from other sources.   They knew (I hope) that they were not going to maintain a $152M payroll.  It would appear they felt they could absorb the Buxton, Correa, and Lopez contracts and still retain their players as they enter arbitration.  That's why a pointed out the $30M coming off next year which will provide the funding for arbitration increases.  This was the point of the article, was it not?  Isn't the premise of the article that these three contracts prohibit keeping the team together? 

The other possibility point of the article is that we should never sign high-end talent.  Is this how people want the team run?  

No, I think the premise of the article was that ownership lacks long term vision and can't/won't/isn't capable of forecasting outside of 12 months.

Which means it's poorly run.

[KGB]

1 hour ago, chpettit19 said:

Revenue is not his job. Baseball is his job. Derek Falvey doesn't make decisions on revenue or where to spend it. The Pohlads and Dave St Peter give him an allowance and let him spend it how he sees fit. The business and baseball sides are not the same thing. Derek Falvey is not in charge of any business decisions. He's in charge of baseball decisions. He had no part in cutting the payroll. Not his job.

Revenue drives his payroll and what he can do. He may not be in charge of it, but he better be aware of it and plan accordingly. You can't be surprised. If you are, you are not doing your job as a President of a organization.

[Greggory Masterson]

2 hours ago, Major League Ready said:

It's sloppy and the writers here have a history of presenting numbers that are not accurately portrayed.  It's simply a misrepresentation to use year-end numbers to represent one extreme and opening day numbers for the other comparison.  You have the numbers, why not provide the exact numbers instead of rounding by $6.3M.   This would be subject to pretty harsh critique in an actual management analysis.  In the real world, any anomalies would also be reported.   Once again, no mention of the significant anomaly in the form of $30M in BAM money.  In any business environment, this would be highlighted as it is a very significant and very unusual circumstance that requires consideration.  In the dozens of TD articles about spending this year, this significant financial anomaly was continually ignored.  I guess it would not get readers nearly as wound up if you wrote the twins had a $30M financial windfall last year and what do you know they spent $30M less this year.  

With all of the angst over spending, how is it possible that there has never been an article that compares the Twins percentage of spend to the rest of the league?

 

Thankfully for me, you, and business owners everywhere, I'm not providing a managerial analysis. I'm exploring a problem using rough figures that are rounded (mathematically-sound from the figures I started with). I'd appreciate that you not use the discrepancy between the numbers that I chose and the numbers that you'd prefer as an opportunity to grind an axe. Instead, I encourage you to engage with the content of the writeup, which doesn't meaningfully change whether I use $127.3-153.7 or $130-160 or whichever payroll snapshots that you'd prefer. The problem remains the same.

I didn't discuss the BAM financial anomaly because that tangent doesn't address the topic of this article--the difficulty in operating with nearly 60% sorry, 56.6717% of an estimated payroll to three players. I have never once written an article to get readers "wound up." Including the reasoning, if this indeed was the reason, doesn't change the problem, nor does it make it seem like decision-makers were not blindsided. The big contracts signed make it seem like they were either surprised by the reduction or planned poorly for an oncoming reduction that they should have seen. That's in the opening paragraph.

In terms of an article discussing percentage of spend to the rest of the league, I assume you mean percent of revenue that goes into player salary? We as fans are even more in the dark about revenue than we are just about anything else. I wouldn't write that, nor would I read that, because no one has that information. regardless of what Forbes reports.

[chpettit19]

28 minutes ago, KGB said:

Revenue drives his payroll and what he can do. He may not be in charge of it, but he better be aware of it and plan accordingly. You can't be surprised. If you are, you are not doing your job as a President of a organization.

He's not the president of the organization, Dave St Peter is. He's the president of baseball operations. It's just a fancier title for what used to be the team's GM because it allowed teams to say they were giving someone a promotion. Do you think Terry Ryan was doing a lot of revenue work?

The problem the organization would have is if they're wasting Falvey's time in meetings about TV deals or radio deals or attendance projections or jersey patch advertisements . That's St Peter's job. St Peter should be giving Falvey accurate general estimates for future payrolls, but Falvey shouldn't be the one making those estimates. Because revenue isn't what sets his payroll. Percentage of revenue as dictated by Dave St Peter and (now) Joe Pohlad is. Falvey wasting time predicting what percentage of an estimated revenue he may get in 2026 would be terrible management of the organization. That's what Dave St Peter is for.

[TheLeviathan]

9 minutes ago, chpettit19 said:

He's not the president of the organization, Dave St Peter is. He's the president of baseball operations. It's just a fancier title for what used to be the team's GM because it allowed teams to say they were giving someone a promotion. Do you think Terry Ryan was doing a lot of revenue work?

The problem the organization would have is if they're wasting Falvey's time in meetings about TV deals or radio deals or attendance projections or jersey patch advertisements . That's St Peter's job. St Peter should be giving Falvey accurate general estimates for future payrolls, but Falvey shouldn't be the one making those estimates. Because revenue isn't what sets his payroll. Percentage of revenue as dictated by Dave St Peter and (now) Joe Pohlad is. Falvey wasting time predicting what percentage of an estimated revenue he may get in 2026 would be a waste of his time. That's what Dave St Peter is for.

To add to all of this: all Falvey can do is make a reasoned guess about the future when he is signing Correa to a 6 year deal.  With inflation alone it would be reasonable for him to assume his spending would not have to go down.  Combine that with the largely steady climb in budget AND Dave St. Peter and others publicly stating that they had a plan for broadcast revenue....there was no reason he would expect such a substantial cut.

Hell, by just common sense of "We just broke a two decade curse, the stadium was buzzing, let's be a smart business and invest in this momentum" he should've expected plenty of room to operate.

Instead....knee-capped.  HARD.  With almost no time left to act.  He didn't do well with the resources and time he had, but we should all be enraged at Joe Pohlad right now.  Anyone protecting them by nit-picking the payroll cut is giving them cover for the indefensible.

[Patzky]

40 minutes ago, KGB said:

Revenue drives his payroll and what he can do. He may not be in charge of it, but he better be aware of it and plan accordingly. You can't be surprised. If you are, you are not doing your job as a President of a organization.

Numbers from a hat? Hey it worked for setting the lineup .

[Mike Sixel]

1 hour ago, Greggory Masterson said:

Thankfully for me, you, and business owners everywhere, I'm not providing a managerial analysis. I'm exploring a problem using rough figures that are rounded (mathematically-sound from the figures I started with). I'd appreciate that you not use the discrepancy between the numbers that I chose and the numbers that you'd prefer as an opportunity to grind an axe. Instead, I encourage you to engage with the content of the writeup, which doesn't meaningfully change whether I use $127.3-153.7 or $130-160 or whichever payroll snapshots that you'd prefer. The problem remains the same.

I didn't discuss the BAM financial anomaly because that tangent doesn't address the topic of this article--the difficulty in operating with nearly 60% sorry, 56.6717% of an estimated payroll to three players. I have never once written an article to get readers "wound up." Including the reasoning, if this indeed was the reason, doesn't change the problem, nor does it make it seem like decision-makers were not blindsided. The big contracts signed make it seem like they were either surprised by the reduction or planned poorly for an oncoming reduction that they should have seen. That's in the opening paragraph.

In terms of an article discussing percentage of spend to the rest of the league, I assume you mean percent of revenue that goes into player salary? We as fans are even more in the dark about revenue than we are just about anything else. I wouldn't write that, nor would I read that, because no one has that information. regardless of what Forbes reports.

Great writing! Truly. 

[Woof Bronzer]

4 hours ago, Old fox said:

The Pohlads are bankers which are considerably different from a businessman. They don’t even compare closely. 

Good news for you, Joe Pohlad is neither a banker nor a businessman!

[Woof Bronzer]

I think we're overcomplicating this.  The Twins don't have a plan.  Under Jim Pohlad, the plan was to optimize profits by just investing enough to remain modestly competitive - aided by the weak AL Central - and never getting reckless and going all in. So they were always looking five years down the road to a future that never came.  

Given what we've learned the last few days, the current Twins seem to be a failson vanity project.  They're a toy to keep Joe Pohlad too distracted to destroy any more media companies.  No planful organization would sign Correa to that deal and then cut payroll.  No planful mid-market team would tie up 60% of their payroll on 3 players as Gregg has written.  No planful organization would announce the extension of their manager and GM before a historically failed season is even over - wouldn't any serious business want to take a breath and evaluate what the hell just happened, and come up with a plan for the future? There is no plan.  Joe Pohlad is just playing Stratomatic.

[saviking]

Yup, a small market team can't pay one player 36 million a year unless he hits 50 home runs and drives in 120 a year. I've been saying that ever since we signed him years. But at least Correa played really solid this year if it weren't for being out for much of the stretch drive when we needed him the most. 

Now, we are really in a pickle. Just think of how much we could do with a freed-up 36 million. The only way that will happen is if Correa asks for a trade.

[Major League Ready]

16 hours ago, Mike Sixel said:

Don't you usually say that a team can't win with 40% of its payroll on 3 players? Or am I misremembering?

No, I have never used a 40% bar for 3 players.  That would only be three 17.33M players even at $130M budget.   You are probably remembering that I am generally against a very high percentage of payroll going to a single player and have stated that it's very uncommon among teams in the bottom half of revenue. Teams with below average revenue need to significantly outperform the average production per dollar spent and that’s very difficult to do with the highest paid players.

I was against signing Correa when the deal was 12 years and took a lot of grief from the many fans here who were adamant they sign him.  I was reluctantly OK with them signing him because it’s so rare to get that kind of player with only 6 years guaranteed.  What I said at the time and since then is that they will have to fill the roster from within.  They will have to produce cheap talent in maintain the team together as arbitration increases hit.  You may recall, I said it will be imperative they produce starting pitching.

Conceptually, I am very much in agreement with the article but I have two objections.  One, get the numbers right and don’t exaggerate because it helps your claim.  I can tell you from experience this sort of error would be met with harsh criticism in an actual business scenario.  It also is misguided to use a record high payroll set in a year with a $30M windfall as the bar and then assume payroll is never going to be higher than it is as of this moment.  

Two, the primary point of the article is the difficulty of filling the other roster spots with a limited budget which is a point I have made myself more than once.  Where is the assessment of where the Twins stand in this regard.  Cleveland got absolutely nothing from free agent spending so obviously a roster can be built from within.  If the Twins have enough talent here and on the way to support spending an AAV of $70M on three players that’s a good thing.  Do the Twins have young players for to fill the roster?  Do they have young pitching coming?  Do they have sufficient payroll coming off the books to cover arbitration increases.  The answer is yes but acknowledging that gets in the way of bitching about the payroll decrease.  Let’s look at the entire situation and not avoid any explanation that might support their actions.   I was as on the fence as you can get about the Correa signing but I have to acknowledge it’s financially feasible given the depth of cheap talent they have assembled.

It's also quite possible that the Twins will produce enough pitching that they could trade Pablo Lopez. The Ray’s, Guardians, and Brewers have been known to employ this tactic on occasion.

[LambchoP]

Everyone wanted the team to go out and sign Correa when it happened. Is he overpriced, probably. And it is going to make roster construction that much harder because of his huge salary taking up a lot of the payroll. My guess is, the team will need to rely on our minor league guys for reinforcements and starters, as long as we're paying Correa this kind of money. We need a first baseman, it'll probably be Severino, Miranda, Kiriloff. We need a second baseman, it'll be Lee, Julien, Eeles or Keaschal. Need a center fielder to split time with Buck, it'll be Keirsey, Mccusker and eventually Rodriguez and Jenkins. As for pitching, we've already seen the starters we have to work with, whether our rookies are ready or not. Bullpen will be filled in with more minor league signings and league minimum salary cast offs, just like this year. It's sad too, because with just a few more legit pitchers, this could be a real good team.

[Dawgzilla]

You are either "in it to win it" or sell the team; no more "small market" bull dung!  Television rights have to be cleared up too for outstate residents to follow, otherwise you lose them altogether!  Payroll must be in the top ten also!