How Excited Should Fans Be About Pohlad Family Plans to Sell Minnesota Twins?

[Fire Dan Gladden]

Potential payroll flexibility is only a small part of the excitement over new ownership.  The stubbornness and inflexibility of ownership has been one of the larger issues over the last few decades.  Change is part of that excitement.  What will the new owners do differently in hopes to win a championship and provide a positive experience for fans?

Some changes seem like low hanging fruit (better marketing, better in-person experience), but others will take time.  Approaches to the FO and on-field product, team infrastructure, scouting, analytics all could see changes.

Good or bad, change is almost always painful.

[NYCTK]

I said it in the other thread, and I'll repeat it because it's true. 

This is WAY more exciting than if the Twins had gone 5-5 down the stretch and limped into the playoffs. This is actually potential hope for the franchise. We all know the Twin Cities to be a great metropolitan area and undeserving of terrible ownership whose only goal was to extract dollars. The Pohlads hated the fans so much, their mindset permeated the fanbase, having Twins fans suggesting MSP is a small market and that it should consider itself lucky just to have a team at all. 

There were even people on this very website questioning if the fans were the problem.

The 2024 Twins were a loser organization with a loser mentality and the fans that still existed had resigned to that fact. If the sale actually happens, there's a real chance this organization can reshape its mindset and actually be a winning club with a winning mindset, because for years and years that hasn't existed. 

 

[TheLeviathan]

33 minutes ago, Mike Sixel said:

Risk free, since no sports team sells for a loss....

This.  Sure...44m in Tesla would have made a lot of money.  It also had major risks.  There is no risk with a pro sports franchise.

It's a fun way to guarantee value.

[Riverbrian]

16 minutes ago, nicksaviking said:

Yeah long term. And someone dropping 1.5B is probably going to want decent yearly dividends short term. Those yearly dividends seem to be shrinking without the cable deals.

 

12 minutes ago, Mike Sixel said:

Risk free, since no sports team sells for a loss....

I agree with Nick... Baseball isn't the greatest sports investment at the moment. The cable deals are struggling because the demo's are struggling. I'm investing in the Loons if it was my call. 

I also agree with you Mike... It's a pretty safe investment especially in 1984. I'd imagine that if there is no future value... nobody is buying at 1.5 million or whatever price is agreed upon. I'd imagine that someone is going to buy so things are fine on that end. However... the point remains the same. Unless they are incredibly bad at it and invest in apartment complexes for Camels in Vermont. These folks with money are going to turn 44 million into a lot more money over 4 decades. 1.5 Billion shouldn't shock anyone.

Money makes more money.

In 1984 coming out of high school... I invested 44 dollars in Eggs. Those Eggs are worth 8,000 dollars now. Turned them into Chickens and Buffalo Wild Wings is charging me 28 Dollars for a dozen wings in 2024. The Eggs were a good investment... Spending the profit on Buffalo Wings was not.  

     

[jmlease1]

37 minutes ago, Mike Sixel said:

Risk free, since no sports team sells for a loss....

This is the thing: yes, you could have made even more money investing the $44M in something else. But the risk levels are going to be much higher and the variation much greater. Pro sports franchises have appreciated massively for decades. At any time, you could cash out and make staggering profits, and without needing to sell off the business for parts. there's really no other industry like it, and again: the low-risk levels are exactly why you're seeing investment firms, hedge funds, etc buying equity stakes in pro sports and/or providing financial backing for people who want in on this.

there will be plenty of suitors for the twins. Whether they'll meet the Pohlad family's demands are another matter. Pohlads might be asking for $2B on a franchise that's worth $1.5B. they might have stacked any of the operating losses as team debt (while having extracted the profitable years as dividends to the family) and expect the new owners to eat that. there's all kinds of ways it could go sideways...but there will be all kinds of bidders.

i just hope we get some that will have the cash assets where they won't need to turn around operating profits on the Twins in the millions to support something else straight out the gate. I want them to have the funds to invest in their new asset , not immediately seek to extract from it. That's what I'm watching for.

[beckmt]

My big concern is that some out of market player from another city offers Pohlad's an overpay.  Moving a club is not the difficult if you have good lawyers working for you.  Two cities I am concerned with are Nashville and Salt Lake City.  Don't know what the Pohlad's are thinking, but am worried that all the negative publicity is wearing on them and they may not care who they sell it to, only that the buyer meets their price.  

[Mike Sixel]

Just now, beckmt said:

My big concern is that some out of market player from another city offers Pohlad's an overpay.  Moving a club is not the difficult if you have good lawyers working for you.  Two cities I am concerned with are Nashville and Salt Lake City.  Don't know what the Pohlad's are thinking, but am worried that all the negative publicity is wearing on them and they may not care who they sell it to, only that the buyer meets their price.  

No way you should be worried about SLC. Not enough big businesses, and we already see how bad altitude is in Denver. Nashville and Charlotte are concerns, if one wants to be concerned. 

The Portland ball group just came to a tentative agreement on a site, which is not my favorite site.... Also, with Intel and Nike in trouble, I don't see the big companies here to buy up tickets. 

[beckmt]

2 minutes ago, Mike Sixel said:

No way you should be worried about SLC. Not enough big businesses, and we already see how bad altitude is in Denver. Nashville and Charlotte are concerns, if one wants to be concerned. 

The Portland ball group just came to a tentative agreement on a site, which is not my favorite site.... Also, with Intel and Nike in trouble, I don't see the big companies here to buy up tickets. 

I did not see Portland as being viable, thought of Charlotte, but don't know if there is enough big money there and also the climate and storm issues.   Nashville has plenty of big money, and probably a group of people who could come up with the money.  Here unless Glenn Taylor decides he wants the club, don't see a money man who could buy it.  Maybe if Lore and A-Rod change their target, but don't know how welcome A-Rod would be in baseball.

[Jocko87]

2 hours ago, Cap'n Piranha said:

A quick google search shows there are only 4 resident billionaires in MN.  Of those 4, only one has a net worth greater than the (assumed) $1.5B price tag--Glen Taylor.  As such, we should all prepare for the very real possibility that the next owner will not be from MN.  As such, while a relocation will be tricky, it is not a complete impossibility.  It should also be noted that a new owner, unless they have Steve Cohen levels of wealth (and only 45 entities in the US do), will need to recoup profit starting day 1 to make up for the 10 figure drain from their assets.  Should this sale go through, it seems fairly likely the impact on spending levels will be minimal, absent incremental and sizable revenue.

I did a similar search and found mostly Cargil folks, all much richer than anyone else in the state.

Do they like baseball?

[Dave Borton]

I am    'ly optimistic. 

[weitz41]

3 hours ago, bean5302 said:

Acquiring the Twins will probably cost in the neighborhood of $1.5B. They typically run an operating income (profit) of about $10-20MM, which is a terrible investment, and a big chunk of revenue is about to disappear. The overall profitability of the Twins, even when considering market value, is under the S&P 500 Index fund so owning the Twins hasn't been a great investment for the Pohlad family for the last 30 years or so.

In fact, most baseball teams aren't great investments. In order to provide a the return which would outperform the general stock market, you have to grow the market value, which is honestly accomplished through attendance (fan experience) or national exposure (winning World Series' or employing big name players).

So there has to be another motivation behind the acquisitions.

Wait your saying 44 mil in 1984 to 1.4 billion in 2024 isn't a good 40-year investment? My 401K says something different

[LastOnePicked]

Very. Very excited. Not because payroll will erupt (it won't). Not because there's some Steve Cohen Jr. out there just dying to field a WS dynasty team in flyover country (there isn't). 

Be excited because the Twins were at a dead end, owned by people who have no discernible interest in winning and also no great acumen for running the business. It's not just that the Twins haven't won it all - it's that they aren't an exciting or sharp organization. My guess is that Twins executive leadership has left millions on the table in revenue with poor decision-making. 

The Twins once owned this state in terms of fandom. 1987 and 1991 were a long time ago, but many of us are still alive. It wouldn't take too much to heat this franchise back up again. New ownership would be coming aboard at a rocky time for baseball, sure, but to the right people, that's what opportunity looks like. Could be a heck of a good ride. I'd be here for it.

[MN Brian]

3 hours ago, jmlease1 said:

That $44M investment the Pohlads made 40 years ago would be worth $255M at an annual rate of 12% (historically, achievable in the stock market over time).

Not so sure about those numbers - I think we're talking more like $4billion .... the power of compound interest =)

[JD-TWINS]

5 hours ago, weitz41 said:

I liked the stability of having the Pohlad's running the show. This last off season and season will probably make most feel like "good riddance". I'm not so certain it is a good thing. Buck, Correa and Lopez contracts are all due to the Pohlad's. Will the next owner pay for stars? Will the next owners prioritize profits? So, I'm probably 50/50 on the outcome.

Unless some billionaire wants something, their buddies doesn't have. Then I would be thrilled.

Not sure there’s any other kind of owner group ……. it’s not the same as 15-30 years ago…….Billionaire’s now buying a toy for attention! Gotta spend or you get negative attention.

If guys running the organization, under ownership, are solid then they should be competitive regularly!

Better ways to make money in the near term, if one can raise $1.8 Billion, than operational profits on a Sports Franchise………..I think it’s 90% chance of good things to come and just 10% or so this could be a negative going forward.

[BSLinPA]

What have the Polad$ done to instill any confidence in what is about to play out??  Expect another circus.  Paging Donald Watkins.....lol.  Stir in the sway of woke commish Rob Manfred and this could easily become a mess. And nothing good happens if this lingers; thru the off-season or worse yet into the 2025 baseball season (or longer??).  This provides another perspective on Thad Levine's departure (he may have jumped off a sinking ship??).  I sincerely hope my gut is wrong on this.

Hopefully, given that the Pohlad$ have gone public with this, I'm way off base and there is a viable buyer/owners group lined up.  Time will tell.

[mikelink45]

Intentions are not results.  Let's wait and see.  

[bean5302]

3 hours ago, jmlease1 said:

This is the thing: yes, you could have made even more money investing the $44M in something else. But the risk levels are going to be much higher and the variation much greater. Pro sports franchises have appreciated massively for decades...

Are you seriously pretending the mid 90s never happened? Back when 15% returns were normal, but baseball team valuations, revenue and profits were tanking? Pro sports franchises have not outpaced traditional investment options.

[tony&rodney]

4 hours ago, Cap'n Piranha said:

Until you realize that $44M put in a DJIA index fund in 1984 is worth $1.6B today. 

I could care less how much money the Pohlad family makes, but Carl paid $5 million down with another $5 million paid each year for the  next four years and then a $7 million final payment. Carl actually made money on his payments to Calvin. Carl did buy the "other" shares though. Someone can add the initial $5M plus the $11.5M paid for the shares purchased from the Tampa Bay Baseball Group to see what Carl's money could have earned via DJIA. Either way, I'm sure Carl doesn't care any more. But yes, the Pohlad family has money.

 

[Mike Sixel]

1 minute ago, Richie the Rally Goat said:

If the Pohlads had invested that $40m in the S&P 40 years ago, they’d have $970m. If they sell the Twins for $1.5b, they grew their investment 50% above par, plus at $10m per year of profit x 40 years they add $400m, making it close to double!

Not to mention the cash they pocketed in years they had low payroll...

[USAFChief]

1 minute ago, Mike Sixel said:

Not to mention the cash they pocketed in years they had low payroll...

They pocketed cash every year, with the probable exception of 2020.

[DocBauer]

I think all of us, as fans, should be at least somewhat excited, if guarded in our optimism.

I have no clue what the Pohlad's are looking to get in a sale, but it does appear...if you connect a few dots...that they are ready and motivated to sell. So I think fair market value will get it done. My only fear is them wanting a quick sale to someone who's not really interested in baseball itself. That's where bad ownership comes in to play.

TRYING to take a long view of this change, I have to look at someone buying the Twins as an individual, or corporation of buyers, as people not only interested in a long term investment, but also someone who wants to actually own a winning club, whether it be ego, or fun, or a combination of both. 

Imagine if you will...no Twilight Zone reference intended, lol...a not so great economy but someone who really wants to own a sports franchise. Just for giggles, since he's been mentioned, and has a history of wanting to own a ML team, and has owned an NBA franchise previously, let's say Cuban wants to buy the Twins. (He's a name to use for reference sake). He would an organization with a beautiful ballpark, a well respected FO, a strong MILB system in place, and a team that has been largely competitive the past several seasons. Despite vast changes in TV rights and $, which will be affecting about half the league in 2025 or soon after, he can also see an ownership group that has made many missteps the past few years, including poor marketing. Someone as smart as Cuban...again, just an example...not only seeing the quality infrastructure in place, but can see growth opportunities with new, progressive marketing leading the team forward.

I don't think a local buyer is a necessity. I made a flippant, but very real, comment in the other post regarding the Wilfs. They are an excellent ownership of the Vikings, and hail from New Jersey, IIRC. What's important is a new owner/ownership that is interested in baseball, and GROWING the value of their investment. 

But the OP is right that any new owner, barring someone taking the Cohen approach with the Mets, isn't going to just automatically pump $30-40M overnight in to the team. Especially considering the vast changes taking place, and continuing to do so, in MLB due to broadcast changes. A WS isn't going to happen all of a sudden! But if the new ownership is INVESTED in the team, they will do what is necessary to grow their investment, and public support, for the Twins. 

So as things settle down economically in MLB, and a path is forged, and they do all they can to grow and market the team, I would expect a more "normal" growth of payroll.

And really, isn't that really all we've ever wanted and asked for? 

If the Twins are the 15th-17th largest market, then keep payroll in that category at least. BUILD the brand and fan interest. Cut back whenever it's right to do so based on rebuilds and the such, spend a little more when you're in contention. Isn't that what a smart business owner would/should do? 

I'm cautiously optimistic that's what a new owner would do. No IMMEDIATE dividends, but smart growth and investment of their new product/toy/investment. 

 

[Mike Sixel]

10 minutes ago, USAFChief said:

They pocketed cash every year, with the probable exception of 2020.

Most likely true, yes. 

[Richie the Rally Goat]

9 minutes ago, Mike Sixel said:

Not to mention the cash they pocketed in years they had low payroll...

I realized after posting that, I failed to drip the dividends on the S&P calc, it should have been 2.5 to 3b… but yeah, there were years in the 90s where the broadcast sharing revenue from mlb alone paid all of the operating expenses and they still brought in FSN media rights, ticket sales, and concessions.

[FLYBOY1979]

Maybe the M and M  can get back together for more baseball?

[JD-TWINS]

1 hour ago, bean5302 said:

Are you seriously pretending the mid 90s never happened? Back when 15% returns were normal, but baseball team valuations, revenue and profits were tanking? Pro sports franchises have not outpaced traditional investment options.

Not sure how one turns $44M into $1.8B in traditional market investments? I get it’s over 40 years ………. but if you DOUBLE the investment every 10 years it’s $704M. This is with ZERO profitability in operations over all 40 years combined.

Is my math or thinking way off??? LMK…..btw, doubling an investment’s value every 10 years is essentially a fantasy.

[Major League Ready]

4 hours ago, weitz41 said:

Wait your saying 44 mil in 1984 to 1.4 billion in 2024 isn't a good 40-year investment? My 401K says something different

The S&P 500 has returned 9.9% since the inception of this index.  44 million over 40 years comes out to roughly $1.925B

[nicksaviking]

10 minutes ago, Major League Ready said:

The S&P 500 has returned 9.9% since the inception of this index.  44 million over 40 years comes out to roughly $1.925B

Even if those investments are paying 10/20/30/40M dividends per year and give you options for tax-payer funded auxiliary land development?

Look, I've been arguing all day that current ownership is likely the same as new ownership, but this was still a sweetheart deal.

[Rik19753]

8 hours ago, Sjoski said:

True, there are no guarantees news owners will spend more.

The only guarantee we have is that the Pohlad's are never going to spend any more than they have to on this team. 

I hope they find their buyer.

This. Uncertainty is better than guaranteed mediocrity.

I liken it to the Vikings moving on from Kirk Cousins. There are certainly worse owners than the Pohlads, but you can't let that fact scare you from desiring somthing better.

[Yoke]

I just want to be mad at somebody different.

[Nashvilletwin]

2 hours ago, USAFChief said:

They pocketed cash every year, with the probable exception of 2020.

Absolutely not true.  I’ve written this several times on this site and will say it again: on a cash basis the Twins have been losing over tens of millions on an annual basis in the 2020s and could lose over $50MM this year.  I have often written about the decisions the family needs to make every year to find the cash to keep supporting the business and the financial analysis required to warrant/justify that amount of funding. 

The Pohlads are not dumb. They are savvy investors and operators and have been successful across two generations with a third well on the way.  Sure, they could sustain the losses while the equity values were climbing.  But now, the certainty of those rising equity values - especially for small/mid market teams - is unclear.  Said another way, the rate of return on the cash needed to annually fund the team has increased because the risk of the equity growth has risen.  They have other better, more attractive investment opportunities. 

We all know the Pohlads have never been “vanity” owners.  The decision to sell now should be a wake-up call to all of you; namely, the Twins as a business is not as attractive as you think.  If it were - if the team were spewing out big cash flow every year - the Pohlads would be keeping it.  But the franchise is not and that is why they are selling.

For all of our sakes, I hope a “vanity” buyer does appear. But those are actually few and far between and especially for markets like the Twin Cities. Consequently, keep in mind, the new owners may likely be a consortium of investors and quite possibly with no ties to this community.

Say what you want about the Pohlads, but they live, invest, create jobs, and support lots of charities in our state.  We will be lucky to find those community ties in the new owners.  In a state as provincial as Minnesota, those ties actually can be important.  The Wilfs have done an excellent job developing those ties and are a great example of excellent leadership from an outside owner. Of course, the economics of the NFL are completely different than MLB (especially for a franchise like the Twins in a no salary cap league).