Will Twins.TV Save the Twins? A Look at the Financial Future

[Mike Sixel]

1 hour ago, BH67 said:

After this September and ownership's response to it, do you still believe them?

Do I believe they don't take savings from one year to the next? 100 percent

[BH67]

43 minutes ago, chpettit19 said:

Still believe that they pocket whatever profit they can each year and don't roll it over to the next year? Absolutely. Why would we ever not believe that?

Here's why, but only with respect to 2024. If I see a major revenue source shift from recurring to non-recurring status, as is evident with Twins media revenue, I'm going to stop spending that revenue until I have some assurance that the situation improves. I've done that kind of work for much of my career. And if 2024 payroll holds steady in 2025, I have some assurance that this was the primary factor in the payroll cut.

As to similar behavior prior to the demise of regional sports networks, you have a legitimate point. The lack of transparency from the Pohlads per what they do with the money engenders fan hostility, and this is exacerbated when the games aren't accessible for three months on TV and the product on the field is putrid as in September.

I think we agree more than not, and hopefully I with Mike as well. My previous response states that I don't trust anything the Pohlads say about the quality or financing of the Minnesota Twins at present.

[Craig Arko]

No, nothing will save them. They’re doomed, doomed I say!

I even thought I saw a monument for T. C. Bear under construction at Lakewood.

[Linus]

In the long run should MLBtv get a majority of teams under its umbrella there are huge potential gains. The marketing opportunities for MLB stars would be huge. Advertising revenue could be substantial. And best of all (my idea) the small and mid market teams could draw a line in the sand and tell the Yankees Dodgers et al that they either join them or they will have to pay them a royalty to broadcast any game with a lesser team. This could end up being the best form of revenue sharing. If the giants don’t like it they can each play each other 30 times a year and see what happens. 

[umterp23]

David St. Peter says "This will eliminate all blackouts as we've come to know and hate them." 

MLB press release quotes Noah Garden below. Blackouts are the worst and I understand why they exist to theoretically force people to go to games in person, but that concept isn't bullet proof.  

“With the media landscape continuing to evolve, Major League Baseball is committed to serving our fans by ensuring they can see their favorite Clubs, removing blackouts where we can, and ultimately growing the reach of our games,” said Noah Garden, MLB Deputy Commissioner, Business and Media. “We are proud to bring Guardians, Brewers and Twins games to their passionate fan bases with the same high-quality production that we have demonstrated in Arizona, Colorado and San Diego.”

[NotAboutWinning]

4 hours ago, Mike Sixel said:

The Twins don't carry money over year to year. They've told us that in the past. 

If that is the case, they are not the serious business owners they would have us believe. Retained earnings are crucial to smooth out revenue volatility. 

[DemonHourDad]

If Joe Pohlad won't spend his money why should I spend mine? No thanks, unfortunately, a day late and a few million dollars short. 

[SotaSports in NM]

As an out-of-market fan, I'm already paying huge amounts to watch the Twins, Wolves, Wild, and Vikings, so it would be great if this changes to $100 bucks a month for the Twins. I'd love a follow-up article to assess viewership and subscriptions.

[Richie the Rally Goat]

4 hours ago, BH67 said:

After this September and ownership's response to it, do you still believe them?

Retained earnings are a publicly traded company’s mechanism to avoid taxes temporarily.

Private company’s immediately pay income taxes on net profit. There’s no benefit to retain earnings.

[Dave Borton]

14 minutes ago, Richie the Rally Goat said:

Retained earnings are a publicly traded company’s mechanism to avoid taxes temporarily.

Private company’s immediately pay income taxes on net profit. There’s no benefit to retain earnings.

Thanks, I didn't know that. My accounting prof would give me the stink eye...(58 yrs ago).

[Richie the Rally Goat]

3 minutes ago, Dave Borton said:

Thanks, I didn't know that. My accounting prof would give me the stink eye...(58 yrs ago).

I just listen to my accountant for my s-corp

[lake_guy]

1 hour ago, Linus said:

In the long run should MLBtv get a majority of teams under its umbrella there are huge potential gains. The marketing opportunities for MLB stars would be huge. Advertising revenue could be substantial. And best of all (my idea) the small and mid market teams could draw a line in the sand and tell the Yankees Dodgers et al that they either join them or they will have to pay them a royalty to broadcast any game with a lesser team. This could end up being the best form of revenue sharing. If the giants don’t like it they can each play each other 30 times a year and see what happens. 

Good idea, anything that evens out the revenue has to happen.  Not so sure it will even take a majority of teams.  We'll get our first real read on this when the winter meetings and free agency starts up, let's see how many rich contracts are given out when the few big market teams know they are really only bidding against themselves.  Small and mid market teams finally have some leverage to apply to the big market teams, hope they use it for all it's worth to get true revenue sharing.

[lecroy24fan]

One thing to remember here is that when they eventually got the one year deal from Bally they did not spend any of that on payroll. So the only reason to cut payroll would be if they took a loss on everything else last year.

[BH67]

31 minutes ago, Richie the Rally Goat said:

Retained earnings are a publicly traded company’s mechanism to avoid taxes temporarily.

Private company’s immediately pay income taxes on net profit. There’s no benefit to retain earnings.

From a tax standpoint, that makes sense. On the expenditure side, I surmise that ownership determined how much they would spend on payroll over multiple years to ensure profitability while the new media plan took effect.

For simplicity, let's say the aggregate spend totals $260 million across 2024 and 2025. Not cutting payroll in 2024 would result in $160M payroll that year but only $100M in 2025. Both years would necessarily include the salaries for Buxton and Correa, and the second year would possibly include a big increase in Lopez's salary.

In such a case, paring salary in 2024 and keeping it constant in 2025, at the same $260M total spend, would give the Twins a plausible playoff chance both years at the expense of a World Series run in 2024 only. It's the only sensical explanation to me, and I may be giving the Pohlads too much credit.

[lake_guy]

Just for fun I highlighted the teams with impacted revenue.  Apparently Bally likes the Braves contract so maybe that one doesn't belong, we'll see how that one plays out.  

[Richie the Rally Goat]

35 minutes ago, BH67 said:

From a tax standpoint, that makes sense. On the expenditure side, I surmise that ownership determined how much they would spend on payroll over multiple years to ensure profitability while the new media plan took effect.

For simplicity, let's say the aggregate spend totals $260 million across 2024 and 2025. Not cutting payroll in 2024 would result in $160M payroll that year but only $100M in 2025. Both years would necessarily include the salaries for Buxton and Correa, and the second year would possibly include a big increase in Lopez's salary.

In such a case, paring salary in 2024 and keeping it constant in 2025, at the same $260M total spend, would give the Twins a plausible playoff chance both years at the expense of a World Series run in 2024 only. It's the only sensical explanation to me, and I may be giving the Pohlads too much credit.

Agreed. It’s hard to project Cost Of Goods Sold, but I would imagine they run a multi year pro forma P&L and cash flow statement. It wouldn’t surprise me if last October, what looked like a last minute boondoggle to us from the outside, was actually planned well in advance and just really poorly executed and communicated, 

Edited October 10, 2024 by Richie the Rally Goat
The filter didn’t catch my potty mouth

[Ryan_K]

It's a high price for 1 team. The style is not engaging with the strike outs, wish it was more KC speed, contact defense and players who play 130 plus games.

Plus you still have ads

IMO, make it free streaming, boost viewership, and use that to sell ad spots at a higher rate. Plus this gets the 5 state area being Twins fans easily so more merch and seats are sold.

[dxpavelka]

Explain to me why I want to pay for a product I have received for free for my entire life.  I went three months without in 2024 and my life was no less complete.  I'll be fine.  Fewer fans will be interested in the team and attendance will show it.  Just sayin

[Original_JB]

21 hours ago, Whitey333 said:

I'm glad the Twins are making a decision with their TV package early this off season.  I hope it all works out well and that it's affordable.  So if the same things happen to the T wolves and Wild I suppose we would have to pay an extra $20 or so per month for each of those teams.  This could get very speedy to watch local sports teams.

TBH, a bundle of Twins/T-Wolves (who I really don't watch)/Wild on a $200/yr subscription isn't bad, as long as it's a solid, HD stream

[Trov]

22 hours ago, bean5302 said:

Revenue will still come from broadcasting on cable or OTA or whatever other method gets used. There just won't be the value in the "exclusive" rights part of the package. I don't know what the numbers look like, but it certainly seems like a big part of the pie is being missed in these analysis'

It's not like people without an Twins.TV sub won't be able to watch the games. The games will still be broadcast on a network for which the cable providers will pay a fee. It'll be lower, but not that much lower (from like $40MM to $4MM) for Minnesota.

Do you have numbers of the other markets last year that made deals?  If not, that is pure speculation as to what teams will get to have games aired on local cable or networks.  First, it will not be likely too many channels would come knocking for rights, being it will not be exclusive and will reduce their ability to get money from ads.  If they are cable networks that want to bid, the Twins have little leverage as regional sports broadcasting is dying, why we are here. 

If the MLB wants to have an exclusive channel that is not MLB network air games on cable, people will have to pay extra on cable to get it, because there will be no leverage for MLB to have cable put on their basic packages.  This will then reduce ad revenue as well. 

Yes, they will be able to sell some games if not all games to some broadcaster, but it will not be anywhere near what they sold last year, or years prior.  It is clear channels were not knocking down the door to buy the rights for the Twins to be aired. 

[DJL44]

1 hour ago, dxpavelka said:

Explain to me why I want to pay for a product I have received for free for my entire life. 

How did you manage to get Twins baseball for free? Piracy?

[Peter]

This is win win for everyone!!!! Enough is enough of negativity badmouthing our twins!!! We must must must support them and ALL the Minnesota teams no matter what win or lose!!!!

[AKTwinsFan]

They should have waited to find out what the owners of the Wolves/Lynx were doing before they made this choice. If the Wolves create a provider similar to YES or other team owned broadcasting, they should work with them to get more money.

[mrcharlie]

Twins change in ownership may not mean higher payroll.  My hope is for changes in coaching personnel and therefore preparation of players. 

[BH67]

15 hours ago, Richie the Rally Goat said:

Agreed. It’s hard to project Cost Of Goods Sold, but I would imagine they run a multi year pro forma P&L and cash flow statement. It wouldn’t surprise me if last October, what looked like a last minute boondoggle to us from the outside, was actually planned well in advance and just really poorly executed and communicated, 

In light of this morning's news about the Pohlads possibly selling the team, I think you summarized this perfectly.

[bean5302]

5 hours ago, dxpavelka said:

Explain to me why I want to pay for a product I have received for free for my entire life.  I went three months without in 2024 and my life was no less complete.  I'll be fine.  Fewer fans will be interested in the team and attendance will show it.  Just sayin

You won't have to pay any more for it. It's still going to be available on cable or OTA, whatever network decides they want to pay for broadcast rights, those broadcasters just won't have exclusive rights to broadcast (they'll have to share the rights with MLB.com).

[dxpavelka]

On 10/10/2024 at 8:34 AM, DJL44 said:

How did you manage to get Twins baseball for free? Piracy?

Part of a cable package I would have paid for regardless of the presence of the Twins.  Will cost me no less with the Twins not on it.

[dxpavelka]

On 10/10/2024 at 12:40 PM, bean5302 said:

You won't have to pay any more for it. It's still going to be available on cable or OTA, whatever network decides they want to pay for broadcast rights, those broadcasters just won't have exclusive rights to broadcast (they'll have to share the rights with MLB.com).

Not the way I'm hearing it.

[bean5302]

2 hours ago, dxpavelka said:

Not the way I'm hearing it.

I'm not sure what you're hearing?

https://www.12news.com/article/sports/mlb/diamondbacks/how-to-watch-arizona-diamondbacks-games-tv-and-streaming-2024-season/75-c5b07291-9bd7-4d7c-b308-13719ef2d0b7

The Diamondbacks are an example of how this has worked.

Don't have/want cable? Stream the games for $19.99/mo.

You do have and want cable? Watch the games as part of your cable package (just like it was in previous years for the Twins).

[dxpavelka]

10 hours ago, bean5302 said:

I'm not sure what you're hearing?

https://www.12news.com/article/sports/mlb/diamondbacks/how-to-watch-arizona-diamondbacks-games-tv-and-streaming-2024-season/75-c5b07291-9bd7-4d7c-b308-13719ef2d0b7

The Diamondbacks are an example of how this has worked.

Don't have/want cable? Stream the games for $19.99/mo.

You do have and want cable? Watch the games as part of your cable package (just like it was in previous years for the Twins).

I'll be ecstatic if that's the case but, again, all I'm hearing about is the streaming side of things.  Not to mention that those cable packages were previously bringing in tens of millions of dollars and everything I'm hearing says that money is going away.  Cable options won't be long for this world is they aren't bringing in those dollars.