What Was the Point of Signing Carlos Correa?

[chpettit19]

1 minute ago, nicksaviking said:

Also, the Pohlad's ARE the investment banking sector.

And also were in the media sector until Joe tanked that opportunity. 

[tony&rodney]

Interesting article, for sure.

I'm choosing to believe that the signing of Carlos Correa was meant for positive reasons. It wasn't clear then if the Twins had to pay as much as they did, but Correa plays a very good shortstop and can hit.

Perhaps the undoing of the roster has more to do with how Falvey views baseball, talent, and the way to put together a roster. 

Correa still has value and people do  emerge from plantar fasciitis without complications or reoccurrences of the problem. I guess we shall see how Correa does next season.

[thelanges5]

Seems like the third generation of the Pohlads aren’t very good at making “business decisions”. 
 

Half their net worth is tied up in this franchise that they don't seem to want. Not sure who’ll buy the Twins but I cannot imagine them being worse. 

[bean5302]

A lot of the comment section seems to be trying to come up with proof the RSN impact caused all this... The Pohlad family was well informed of the RSN situation. It's inconceivable they weren't because MLB was aware, and other owners were aware which led to changes in the last CBA. There are two parts to the RSN situation. The first is direct RSN revenue to the Twins and the second part is revenue sharing. With the increase in revenue sharing in the CBA, the league mitigated some of the RSN collapse impact on teams. The Twins' RSN deal prior to last year was $54MM, which was higher than analysts thought, and Bally Sports renegotiated deals with existing contracts at about 85%. It's inconceivable the Twins hadn't been negotiating with Bally prior to the end of the season so they must have been aware of a "ball park" RSN revenue stream for 2024. It may have been lower than the 85% which Bally renegotiated with existing contracts, but 85% would be $46MM. $8MM of revenue shift for a team analysts at Forbes thought made $19MM in net operating income last year is a drop in the bucket. I just don't see this as a reason to cut payroll in 2024. Even if the RSN deal dropped to, say, $36MM (a drop of 1/3rd), the Twins would still likely at least break even returning the exact same payroll as 2023. The Twins could have dropped payroll in 2025+ had the future RSN issue turned into a mess, and the Pohlad's have long said they look at financials on a year to year basis to determine payroll.

I also don't think anybody thought Diamond Sports was so poorly managed or they'd do something so destructive to their brand as play a hard core game of chicken with Comca$t; a game which was a predictable epic loss for Diamond. Quotes from the commissioners office were brutal on assessing Diamond's management. There is absolutely no way the Twins agree to a deal with Bally's knowing a full half season of baseball would be unavailable to people watching at home. This doesn't seem like it probably impacted 2024's opening year budget.

I don't think a person can pinpoint a singular component to the change in strategy. Knee jerk reactions from ownership, RSN revenue streams, failures to increase attendance in recent years, concerns about the performance of Falvey's teams despite record setting payrolls, the performance of other teams in the playoffs with dramatically lower payrolls, potential family liquidity, and a whole host of other factors probably contributed to the decision to cut payroll.

[sweetmusicviola16]

I'm not certain that they ever intended to add any significant outside expensive talent to Correa. I do think that they had dreams of the minor league pipeline coming through in a big way. I think they were banking on the pipeline being great and the need to spend big again getting kicked down the road when those players needed big contracts. Just my opinion.

[Mike Sixel]

1 hour ago, Vanimal46 said:

This is just my assumption with no evidence to back it up. I assume Joe Pohlad was planning on having a consistent $150-165 million payroll, and the rest of the family decided to change direction. 

As much as I’ve enjoyed watching him on our favorite team, I wouldn’t blame him if he requests a trade somewhere else. 

Agreed

[gman]

I think plans to sell the team have been in the works for at least 2 years. You don't expect to unload a billion and a half dollar asset in a couple of weeks. Not at max profit anyway. I think Correa was added to the team just to have icing on the cake for a potential buyer. Some in the Pohlad family decided they didn't want to be out of pocket to fund the team while waiting for a potential buyer.

[sweetmusicviola16]

My issue isn't with the team having a budget and then exceeding it by 25-30 mil as some fans consistently ask them to do. My issue is the repeating time and time again of signing washed up veteran #1 for 7 million and washed up veteran #2 for 5 million instead of signing one guy for 15 million who would maybe make a huge difference on the field. Instead they waste budget. Sign one difference maker and fill the roster with minimum wage players from the system. You also find out who has a future this way. I'm not expecting things to change this off season either. 

[nicksaviking]

1 hour ago, bean5302 said:

I also don't think anybody thought Diamond Sports was so poorly managed or they'd do something so destructive to their brand as play a hard core game of chicken with Comca$t; a game which was a predictable epic loss for Diamond. Quotes from the commissioners office were brutal on assessing Diamond's management. There is absolutely no way the Twins agree to a deal with Bally's knowing a full half season of baseball would be unavailable to people watching at home. This doesn't seem like it probably impacted 2024's opening year budget.
 

But they already did exactly that and lost with FUBU, YouTube TV and Hulu TV.

And this game of chicken happened AFTER the bankruptcy and AFTER they failed to make payments to the Twins in 2023. Yet the Twins went back. They might not have KNOWN, but they had to be aware it was a possibility as this company had been knifing them in the back for years. 

[ashbury]

2 hours ago, Vanimal46 said:

This is just my assumption with no evidence to back it up. I assume Joe Pohlad was planning on having a consistent $150-165 million payroll, and the rest of the family decided to change direction. 

As much as I’ve enjoyed watching him on our favorite team, I wouldn’t blame him if he requests a trade somewhere else. 

Concur.  While Joe Pohlad is listed on the team's website as "Executive Chair," just above him is listed Jim as "Control Owner," which represents no real change in the power structure from before.  I think it's completely reasonable to believe that after 10 or 12 months in that cushy chair starting in November 2022, Joe was asked to present progress-to-plan on his business plan that they presumably all agreed to when he was elevated.  The rest of the ownership team was presumably aghast when they saw the revenue forecasts, particularly the coming collapse of broadcast revenue with no remedy in sight, and mandated cuts.

Kind of similar to the situation with Bill Smith as GM after the 2011 season.  The rumors that I recall were that his get-well plan involved an infusion of capital to bring in talent, and when he was told no, he didn't back down, and was summarily replaced by Terry Ryan V2.0, who then embarked on a "right-sizing" project of his own.  I would infer that in the present case, Joe Pohlad may have tried to persuade the higher-ups in a similar way, to accept some losses in order to build up the fan base, but unlike Smith did back down and thus began the past round of right-sizing that may not yet be the last.

It's all supposition of course, and going with sketchy public knowledge.

[bean5302]

3 minutes ago, nicksaviking said:

But they already did exactly that and lost with FUBU, YouTube TV and Hulu TV.

The Twins might not have KNOWN, but they had to be aware it was a possibility. 

I think you're overselling how much risk the Pohlad's felt there was.

Like the foreclosure crisis where issuing banks had taken on high risk mortgages and packaged them as low risk to purchasing banks and investors. This wasn't a "Twins" or "Pohlad's" issue since a dozen MLB teams were dragged into the situation. I think every single team who didn't cut ties mid-2023 after non-payment wound up re-upping with Bally Sports given the opportunity, and zero of them would have been okay with most of their fans being unable to watch the games, period. As a collective, MLB ownership clearly didn't see the risk.

[nicksaviking]

3 minutes ago, bean5302 said:

I think you're overselling how much risk the Pohlad's felt there was.

Like the foreclosure crisis where issuing banks had taken on high risk mortgages and packaged them as low risk to purchasing banks and investors. This wasn't a "Twins" or "Pohlad's" issue since a dozen MLB teams were dragged into the situation. I think every single team who didn't cut ties mid-2023 after non-payment wound up re-upping with Bally Sports given the opportunity, and zero of them would have been okay with most of their fans being unable to watch the games, period. As a collective, MLB ownership clearly didn't see the risk.

I'd agree that they didn't think the risk was high. My argument is that they should have known it was higher than they thought. Or if not losing Comcast, a disaster just as bad. Nothing good has come from this Bally deal.

But then I guess my question would be: If the Twins had a crystal ball and did know that they'd lose Comcast, are we sure they STILL wouldn't have taken the more lucrative Bally deal?

[Jocko87]

Reminder-just because we just found out about it doesn't mean it wasnt known. I apply that to the sale as well.

I think the Occams Razor option here is that in any business, any industry, when a Carlos Correa miraculously falls in your lap you do it and figure it out from there.

From there, my hunch is the Pohlad family (beyond the baseball interested ones) got a taste of what big boy baseball is like.  Turns out they don't like it. If there's 10 of them sharing the fortune, it only takes a couple to veto a money losing sportsball thing.

In a roundabout kinda way, Carlos Correa might be the small domino leading to a sale. Anyone make memes here?  What would be the smallest domino in the Correa era?

[weitz41]

Great article.

Not that is upends the general, what was the point, but the BAMTech streaming platform sale was Nov 2022 and the Twins received 30+ mil? from that and signed CC Jan 2023 to the current contract. That may have increased payroll in 2023 to being a record payroll as well. Not defending by any means, but that is another piece that may have played a part in the 2024 payroll reduction. Something I think many have forgotten. No this isn't me providing cover for the Pohlads..

[Finlander]

Plus the team received millions from MLB (amount not disclosed of course) to offset a good chunk of the harm caused by the disastrous TV situation. In all likelihood this windfall ended up in Pohlad pockets.

[Finlander]

Great article btw. I'd love to know if Correa is reading it.

[Riverbrian]

6 hours ago, IndianaTwin said:

Ah, 20-20 hindsight. Such a beautiful thing. 

You make what seems to be the best decision with the information you have at the time. Sometimes* circumstances change. 

*Pretty much always.

 

5 hours ago, chpettit19 said:

They had the information. MLB talked about the changing TV landscape during the CBA negotiations. DSG filed for bankruptcy before the Twins extended Lopez. It's not 20-20 hindsight just because you didn't know about things. They knew when their TV deal was expiring. Everybody who paid any sort of attention at all to such things knew they weren't going to get nearly as much in their next deal and that MLB wanted to create their own streaming network which the RSNs wouldn't like. RSNs were dying anyways. This isn't 20-20 hindsight. It's all things that us regular folk knew at the time and the people who's company had tens of millions of revenue depending on their TV contracts absolutely should've been making decisions based on.

I tend to agree with the basic thoughts of IndianaTwin.

I have no idea what is happening behind those walls but the easiest explanation that fits into my head space is quite simple. That explanation is that... Something changed whatever that may be.  

Was it the RSN? Was it the pending sale? A combination of these things? Was it something that we haven't thought of? 

Something changed. Plans were altered on the fly. We have a GM who was either booted out politely or he said he had enough and left one of 30 well paying jobs that many dream of and he left it with no job lined up? 

Something changed is the only thing that I can come up with? I wish I knew but I don't. However... the Chaos is leaking through the limestone walls and visible to those walking past 1 Twins way.   

 

[The Great Hambino]

3 hours ago, weitz41 said:

Great article.

Not that is upends the general, what was the point, but the BAMTech streaming platform sale was Nov 2022 and the Twins received 30+ mil? from that and signed CC Jan 2023 to the current contract. That may have increased payroll in 2023 to being a record payroll as well. Not defending by any means, but that is another piece that may have played a part in the 2024 payroll reduction. Something I think many have forgotten. No this isn't me providing cover for the Pohlads..

It would be pretty shortsighted to make a 6-year $33+MM annual financial commitment based on a single $30MM non-recurring revenue payout .  They woulda been shopping in the Scherzer section if that were the driving force.

Now that I think about it, shortsightedness is pretty on-brand, so maybe that was the driving force

[Richie the Rally Goat]

7 hours ago, BH67 said:

Question:

And yet, one year after signing Correa, the Twins stripped down their payroll around him, sabotaging a playoff-caliber squad that unraveled in the shortstop's absence. Correa was deprived of a chance to deliver more postseason heroics, and as we look ahead to a reshaped competitive landscape in the Central next year, ownership seems inclined to follow the same inexplicable path.

Answer:

This is where I just sort of get lost in trying to grasp the logic and mindset behind what's happening. Look, if finances and the bottom line are the guiding factors for the Pohlads, I understand it. I don't agree with it, but I understand.

It's called Occam's Razor, Nick. My guess is that the pending Diamond Sports implosion wasn't known at the time of Correa's signing.

The insistence of many knowledgeable voices here of something more nefarious at work has made reading Twins Daily insights unpleasant for me. But that's the cost of admission.

The Twins didn’t know that the organization they were currently in negotiation with for a contract extension and had already missed $140m in payments to multiple MLB teams were in financial distress?
 

I’m gonna go ahead and disagree with your assumption here.

[Richie the Rally Goat]

2 hours ago, Riverbrian said:

 

I tend to agree with the basic thoughts of IndianaTwin.

I have no idea what is happening behind those walls but the easiest explanation that fits into my head space is quite simple. That explanation is that... Something changed whatever that may be.  

Was it the RSN? Was it the pending sale? A combination of these things? Was it something that we haven't thought of? 

Something changed. Plans were altered on the fly. We have a GM who was either booted out politely or he said he had enough and left one of 30 well paying jobs that many dream of and he left it with no job lined up? 

Something changed is the only thing that I can come up with? I wish I knew but I don't. However... the Chaos is leaking through the limestone walls and visible to those walking past 1 Twins way.   

 

Absolutely accurate, the change scope should not be limited to 1 Twins Way.

Think: 250 Nicollet Mall, Suite 600
Minneapolis, MN 55401

[BH67]

1 minute ago, Richie the Rally Goat said:

The Twins didn’t know that the organization they were currently in negotiation with for a contract extension and had already missed $140m in payments to multiple MLB teams were in financial distress?
 

I’m gonna go ahead and disagree with your assumption here.

Touché, and the same to the others with whom I had spirited discussion today. I'm thus inclined to think they hoped otherwise despite the evidence and didn't have a Plan B, and also that they lacked the foresight needed to understand trends in streaming revenue. As you and I discussed earlier about the salary dump, that seems to me the only logical way the Pohlads got here.

[Jocko87]

1 hour ago, BH67 said:

Touché, and the same to the others with whom I had spirited discussion today. I'm thus inclined to think they hoped otherwise despite the evidence and didn't have a Plan B, and also that they lacked the foresight needed to understand trends in streaming revenue. As you and I discussed earlier about the salary dump, that seems to me the only logical way the Pohlads got here.

But don't assume ineptitude. Also don't assume malfeasance when simple ineptitude is a valid explanation.

There are many other possibilities that we haven't even thought to consider.  We don't even know which Pohlad owns which percentage of the team.

[DocBauer]

What absolutely befuddles me is upping Buxton...though his base salary isn't really that large...signing Correa, and then signing Lopez to an extension over the previous handful of seasons. And while I don't have the numbers in front of me...and am too lazy to look them up right now...the team payroll inched higher and higher over consecutive seasons before the big cut in 2024. At worst, payroll stayed status quo and the Twins continued to rank about 16-17 in MLB. 

Further, while the FO didn't add at the deadline in 2023...and that might have been the right call...they had previously. They usually ended with a higher payroll at season end than they began with. So adding $, even some, wasn't a big issue.

So what in hades suddenly changed???

I've never been a big Pohlad basher until 2024. While I hated the Bally re-up, and have never thought the team was marketed properly, or run with tremendous efficiency, I find it incredulous that they could have been SO LIMITED in thought that they didn't recognize changes brewing up ahead, especially when MLB had already been talking about changes coming. 

My OPINION...based on some deduction and other opinions and information I hadn't previously been aware of until recently...is that there have been changes and potential shortages within the financial structure of the Pohlad family interests. 

I guess they've sold off a handful of businesses the past couple of years, for whatever reasons. (Business is business). But of their $3.8B reported wealth, approximately $1.5B of that would be the Twins presumably, which is not a liquid investment. Is it possible that the family, as a whole, are looking for greater liquid assets to move in a different direction, or fund current ventures?

I tend to believe Joe is a baseball and Twins fan. I tend to believe Jim is also, at least to a degree. But what if the other 8 members of the family don't feel that way? Considering budget increases and the general sense and comments surrounding Joe previously, and the sudden about turn, I'm wondering if everyone else just forced him to pull back and cut his legs out from under him.

It's just speculation, but seems to make some sense to me. After 40 years of owning the team, probably without a great interest in MLB as an entity, it just feels like the family decided enough was enough and it's time to cash in and move on.

Other than better ownership that's more invested in the team, what I'm really hoping for is that the FO is "granted" a final small bump in $ for 2025 as sort of a last hurrah before cashing in. With a projected payroll of $135M on the books if everyone returns, would they give the FO a final budget of $150M? It would be up to Falvey as to how to use that $15M bump, or make a couple moves to gain a little more working capital to play with, but at least provide that bump.

Again, just speculation on my part, but kind of makes sense to me. And I'm probably spitting in the wind about a payroll ceiling bump, but with a projected $1.5B-ish selling price of the Twins, it sure would be nice for a $15M "drop in the bucket-pocket change" increase in the 2025 payroll as an exit "good will" offering.

[tony&rodney]

9 hours ago, sweetmusicviola16 said:

My issue isn't with the team having a budget and then exceeding it by 25-30 mil as some fans consistently ask them to do. My issue is the repeating time and time again of signing washed up veteran #1 for 7 million and washed up veteran #2 for 5 million instead of signing one guy for 15 million who would maybe make a huge difference on the field. Instead they waste budget. Sign one difference maker and fill the roster with minimum wage players from the system. You also find out who has a future this way. I'm not expecting things to change this off season either. 

This is on Falvey and has little to do with ownership. If the budget calls for a number and Falvey chooses the $5M and $7M guys instead of an $11 guy and a minimum MLB salary to fill the bucket, that reflects directly to the PBO.

[Mark G]

As much as I know that this is a family business, in every family of this structure there is a Patriarch.  Carl was that figure for a long time before passing the torch, so to speak, to Jim.  And while Jim may think the time is right for Joe to take on a greater role, as he may be the future, the Patriarch doesn't hand over the keys to the Porsche and say "just don't kill yourself" and never give it another thought.  Jim is in the background, and this may be a realization that he is thinking the kid may not be ready yet.  As for the sale, the rest of the family does have a say and they may be thinking that they don't want Joe learning on the job with their shares.  What I am curious about is what if the sale just doesn't happen?  Does Jim leave Joe in the chair?  Will there be a continued investment in the team?  Or are we left in baseball purgatory until a buyer is finally found?  Maybe this off season will provide an answer.

I, for one, am hoping for a sale; preferably in my lifetime.  Buy Joe a chain of hardware stores, or something equally harmless, and have him run that.  Give us a baseball owner.     

[weitz41]

10 hours ago, The Great Hambino said:

It would be pretty shortsighted to make a 6-year $33+MM annual financial commitment based on a single $30MM non-recurring revenue payout .  They woulda been shopping in the Scherzer section if that were the driving force.

Now that I think about it, shortsightedness is pretty on-brand, so maybe that was the driving force

I agree, but "right sizing" payroll makes sense if you used that one-time payment on the team and knew that the RSN deal was kaput. 

[killertwinfan]

Signing Correa to a long term deal when your best prospect is a SS and close to being ready is not great. Add to that the $30m payroll slash and in makes no sense. The twinkies made it clear they are not serious about fielding a competitive  team and have no strategy shaping personnel decisions.

[saviking]

If they hadn't signed Correa they would have an extra 36 million to spend. 

[Whitey333]

Great article Nick.  I've been wondering about this for quite sometime.  Correa was on the 2023 team but it doesnt mean he helped them 

[mluebker]

Good analysis. Seems like everyone is in broad agreement on how the Twins ended up where they are. So what next?  

Is there any realistic chance that the Pohlads will open up the pocketbook to fill some holes for 2025?

Are the Twins attractive enough to sell quickly and we can plausibly hope new owners will arrive in time try to build a solid playoff team?

Should we expect the front office to ask Buxton and Correa to waive their no-trade clauses, and go full-on rebuilding?

Or will ownership just dump salary and further weaken the team, then try to pick up a handful of Rule 5 picks, reclamation projects, and veterans in decline and hope for the best?

Hope for the best, but prepare for the worst?