Why try to save money

[farmerguychris]

I'm perplexed by something that hopefully someone can shed some light on it for me.  

Big Twins fan, but also casually follow the T'wolves.

When Glen Taylor began selling the Wolves, he came to an agreement with Arod and co right?  But now, he's trying to get out of that deal - in part - to the value increasing drastically when they made it to the Western Conference Finals - in part by spending to improve the team.  Fan morale is higher than has been in a long time.

Conversly, the Twins appear to be trying to 'clear off the books' of as much promised money as possible in hopes that the team (maybe) appears to be in better financial shape for a profitable sale.

Why the different methods of increasing the value and wouldn't it be better to follow the proven method of Taylor and the Wolves - increase the value of the team by winning - instead of simply cutting costs to nothing and lose fans along the way?  

What am I missing?

[jctwins]

I think it's a very distinct possibility that the Pohlads, or at least this generation of Pohlads, just aren't very good business people. The examples are numerous that predate this series of decisions.

 

 

[Brock Beauchamp]

On 12/13/2024 at 9:38 AM, jctwins said:

I think it's a very distinct possibility that the Pohlads, or at least this generation of Pohlads, just aren't very good business people. The examples are numerous that predate this series of decisions.

I'm reluctant to say this is the cause but with every passing month, it feels more accurate.

[Doctor Gast]

I'd think after netting over a cool $billion they wouldn't split hairs over a million here or a million there.

[tony&rodney]

Carl was a businessman and loved everything about the corporate world. The Minnesota Twins were a steal of a deal and he recognized it. MLB put him in the seat and it has been a long ownership for the Pohlads. Running a big business may not be very interesting or suit the heirs. The time has come for the Pohlads to make an escape from so much public scrutiny about something they don't necessarily feel passionate about now/any more.

As regards the question - perhaps Joe Pohlad and others are just letting Falvey & Sons run things at a set number. The proper answer is that we just don't know. So we wait it out.

[Twodogs]

On 12/12/2024 at 12:52 PM, farmerguychris said:

I'm perplexed by something that hopefully someone can shed some light on it for me.  

Big Twins fan, but also casually follow the T'wolves.

When Glen Taylor began selling the Wolves, he came to an agreement with Arod and co right?  But now, he's trying to get out of that deal - in part - to the value increasing drastically when they made it to the Western Conference Finals - in part by spending to improve the team.  Fan morale is higher than has been in a long time.

Conversly, the Twins appear to be trying to 'clear off the books' of as much promised money as possible in hopes that the team (maybe) appears to be in better financial shape for a profitable sale.

Why the different methods of increasing the value and wouldn't it be better to follow the proven method of Taylor and the Wolves - increase the value of the team by winning - instead of simply cutting costs to nothing and lose fans along the way?  

What am I missing?

I've been kind of saying the same thing.  I mean you usually fix up your house before you sell it, right?  It seems that others think I mean to go and get a Juan Soto contract, but that is definitely not what I meant when I've brought it up before.  Just that maybe keeping payroll where it's at instead of cutting it, could still trade some people to reduce the payroll but then use that money to add a needed piece or two.  Just like you said a winning club should be worth a little more than a squad that gets cut to scraps.  Regardless of the sale or no sale, I just want to see the Twins compete for something this season, hard to do that when you cut payroll and then you can't add anything?  They have a good core, just might need a player or two to put them in contention.  🤞 Fingers crossed

[nicksaviking]

The NBA also has salary caps and salary floors and they are only 14M apart. Spending that extra 14M to try to make the team more exciting is probably worth the investment when trying to sell.

The Twins on the other hand would have to spend 100-140M to reach the top tier of their league. If they aren't willing to spend in that range, they're probably more likely to appeal to new buyers with glowing cashflow instead of an exciting product.

That was not an endorsement.

[nicksaviking]

On 12/13/2024 at 9:38 AM, jctwins said:

I think it's a very distinct possibility that the Pohlads, or at least this generation of Pohlads, just aren't very good business people. The examples are numerous that predate this series of decisions.

 

 

The only two businesses I've heard disclosed that Joe Pohlad was given to run were two different radio stations. Which he promptly ran into the ground and the family had to sell at a giant loss.

[jctwins]

2 minutes ago, nicksaviking said:

The only two businesses I've heard disclosed that Joe Pohlad was given to run were two different radio stations. Which he promptly ran into the ground and the family had to sell at a giant loss.

I heard the same thing. It's hard to know who has really been making what decisions. I'm not convinced St. Peter understands the business anymore, either, and I have to think he has at least been a voice in the room when Joe doesn't know what to do.

[nicksaviking]

10 minutes ago, jctwins said:

I heard the same thing. It's hard to know who has really been making what decisions. I'm not convinced St. Peter understands the business anymore, either, and I have to think he has at least been a voice in the room when Joe doesn't know what to do.

I'd like to hear more of Joe's resume but my guess has been that Jim didn't want to run the team anymore so they decided to explore selling and gave the keys to the youngster to play around with it before the family was done with the team.

As to St. Peter, I can't imagine he ever knew much about business. He was hired as a kid out of college and has zero work experience outside of the Twins. I mean if he ever actually was learning about TV deals, marketing or fan engagement, it would have been from some old-timer back in the 1990s. Not exactly a relevant period to today's strategies. I envision his sage advice something like:

[Major League Ready]

On 12/12/2024 at 2:52 PM, farmerguychris said:

I'm perplexed by something that hopefully someone can shed some light on it for me.  

Big Twins fan, but also casually follow the T'wolves.

When Glen Taylor began selling the Wolves, he came to an agreement with Arod and co right?  But now, he's trying to get out of that deal - in part - to the value increasing drastically when they made it to the Western Conference Finals - in part by spending to improve the team.  Fan morale is higher than has been in a long time.

Conversly, the Twins appear to be trying to 'clear off the books' of as much promised money as possible in hopes that the team (maybe) appears to be in better financial shape for a profitable sale.

Why the different methods of increasing the value and wouldn't it be better to follow the proven method of Taylor and the Wolves - increase the value of the team by winning - instead of simply cutting costs to nothing and lose fans along the way?  

What am I missing?

I am not quite sure what you mean.  Can you give specific examples of players they non-tendered or traded to "clear off the books".

[farmerguychris]

12 minutes ago, Major League Ready said:

I am not quite sure what you mean.  Can you give specific examples of players they non-tendered or traded to "clear off the books".

Its not any specific players that they didn't bring back - but it is their lack of investments in new players that would help the team win games.  Based on the Wolves example - winning more games, lead to a significant increase in the value of the team.  Thus, instead of cutting costs to clean up the books, I'm suggesting if they invested more, hopefully resulting in more wins - the Pohlads would actually generate more revenue when selling the team.  

They could spend more to increase the value of the team (imagine what a World Series Contender could sell for vs a non-playoff team), conversely - they elected to cut payroll by $30M.  That is what is confusing me - based on what is happening next door at the Target Center.

 

[Major League Ready]

13 minutes ago, farmerguychris said:

Its not any specific players that they didn't bring back - but it is their lack of investments in new players that would help the team win games.  Based on the Wolves example - winning more games, lead to a significant increase in the value of the team.  Thus, instead of cutting costs to clean up the books, I'm suggesting if they invested more, hopefully resulting in more wins - the Pohlads would actually generate more revenue when selling the team.  

They could spend more to increase the value of the team (imagine what a World Series Contender could sell for vs a non-playoff team), conversely - they elected to cut payroll by $30M.  That is what is confusing me - based on what is happening next door at the Target Center.

 

OK.  I was not tracking with the cost cutting.  What you are actually saying is that they should increase spending because it will increase the sale price.  As fans we would like to believe this but I doubt it's true.  If the process has already begun with the Ishbia brothers has already begun, the sale will likely be completed long before the results of any off-season moves come to fruition.  They are not going to assume success.  Free agent spending definitely does not have the kind of track record that would elevate the sale price of a team.  

There are several other factors with much more weight on a team's valuation.  A buyer's assessment of the relative health of the league and this market, risk assessment, is the new TV model a permanent disadvantage, and will the growing revenue disparity severely limit the success of teams in the bottom half of revenue.  They are looking at a very long-term investment.  

[jctwins]

38 minutes ago, Major League Ready said:

OK.  I was not tracking with the cost cutting.  What you are actually saying is that they should increase spending because it will increase the sale price.  As fans we would like to believe this but I doubt it's true.  If the process has already begun with the Ishbia brothers has already begun, the sale will likely be completed long before the results of any off-season moves come to fruition.  They are not going to assume success.  Free agent spending definitely does not have the kind of track record that would elevate the sale price of a team.  

There are several other factors with much more weight on a team's valuation.  A buyer's assessment of the relative health of the league and this market, risk assessment, is the new TV model a permanent disadvantage, and will the growing revenue disparity severely limit the success of teams in the bottom half of revenue.  They are looking at a very long-term investment.  

This is oversimplifying. Many of us would argue that an increase in spending in 2023 and 2024 would have led to higher fan engagement, and built goodwill with the fan base, which then grows or at least maintains the fan base. 

Additionally, aggressively locking down a television contract would have had similar results.

Both result in a higher valuation of the business. They made decisions not to do either.

 

[Riverbrian]

Up here in Grand Forks. I lived through the Fighting Sioux nickname controversy. It was loud, extended and exhausting. 

I spoke with many passionate folks on the subject because it was all that everybody wanted to talk about.

In those discussions... I found myself saying this to nearly everyone and it applies to this discussion.  

"75 Years from Now... Nobody is going to care". If the name changed today. 75 years from now it will just be a footnote. This controversy will blow away in the winds of time.  

Why do I bring this up?  

If I had a few spare billion dollars and wanted to buy a baseball team. I would be looking to keep the team for awhile... Long enough to the point that the things concerning the sale price being discussed here won't matter in 5 years. It will all blow away in the wind. 5 years from now... the ownership group will be in charge and the organization will be in the exact place that the new owners have directed it to. All remnants of the Pohlads will be gone.   

Do you want to own a club or not? There is nothing in the portfolio that will carry on into the future unless the new owners choose to carry it with them.

Other than revenue streams and the CBA. 😉 

[Major League Ready]

2 hours ago, jctwins said:

This is oversimplifying. Many of us would argue that an increase in spending in 2023 and 2024 would have led to higher fan engagement, and built goodwill with the fan base, which then grows or at least maintains the fan base. 

Additionally, aggressively locking down a television contract would have had similar results.

Both result in a higher valuation of the business. They made decisions not to do either.

 

They had record payroll in 2023.  The attendance drop-off in 2024 was less than 300 per game even with the collapse so that really does not track.  Can you elaborate on any available TV deals that they opted not to take?  There are several teams in the same scenario this year and there are no TV deals to lock down.

---

Twins Attendance

[jctwins]

45 minutes ago, Major League Ready said:

They had record payroll in 2023.  The attendance drop-off in 2024 was less than 300 per game even with the collapse so that really does not track.  Can you elaborate on any available TV deals that they opted not to take?  There are several teams in the same scenario this year and there are no TV deals to lock down.

---

Twins Attendance

Attendance lags in baseball, so it should have been higher in 2024 following a legit playoff run in 2023. 

You missed them agreeing to extend with Comcast and letting the fans get blacked out? Sigh

[Major League Ready]

16 hours ago, jctwins said:

Attendance lags in baseball, so it should have been higher in 2024 following a legit playoff run in 2023. 

You missed them agreeing to extend with Comcast and letting the fans get blacked out? Sigh

By that logic of lagging a year, investment this year would not yield higher attendance this year.  The Twins didn't even have a deal with Comcast.  They had a deal with Bally's who had an agreement with Comcast.  You can make an argument that the Twins should have taken the potential of Comcast not renewing the Bally's agreement but you can't say the twins should have extended with Comcast because they didn't have an agreement with Comcast.

[Jocko87]

Mostly because bored media types need something to talk about.  That’s it.  

We don’t know that the sudden change in payroll is related to a sale.  They say it’s TV related which is believable but more believable is that it’s both.  One or the other might not have done it but both at the same time make it unavoidable.  A short term debt load has a much higher cost when part of the sale computations. 

A sale of any business is going to put a huge damper on major moves.  An obvious easy decision is not a big deal, the MLB TV partnership already being a done deal is small potatoes-signing up for or moving on from a $150m contract is not.  It’s my belief the sale has been in the works far longer than publicly stated and that simply puts the brakes on many things. 

It’s the same reason the Correa trade discussions are inane garbage.  You don’t tear out the pool when you sell your house.  Err, the new parts to assemble your pool are in that shed over there…have fun. 

That’s not what I bought.

[Keaton]

It’s beyond confusing at this point. They take the necessary time to develop & work up a core of foundational players (Royce, Wallner, Larnach, Jeffers, Ober, Ryan, Jax, etc.). They FINALLY sign some veteran studs to big deals (Correa, Buxton, Pablo, etc.) They take the necessary time to consistently develop deep farm systems & waves of talent (currently the 2nd ranked farm system in the MLB). They overcome the longest playoff losing streak in North American history. They do all this just to dismiss it later on with payroll deductions. Chalk it up to greed at this point. In my honest opinion, even if you are extremely comfortable with your salary and lifestyle as an owner of a professional sports team, you should still take all the opportunities to get better when they present themselves. Otherwise what’s the point of constantly investing in development if you’re never going to invest in the actual thing that pushes you over the top? Are you actually a good business owner with this philosophy? Maybe in other industries but idk…

 

all very frustrating. We’ve got all the right pieces and trajectory right now. Currently projected 4th highest team fWAR in the AL going into 2025. Twins have a fire goin but no one wants to throw more fuel on it…

[jctwins]

19 hours ago, Major League Ready said:

By that logic of lagging a year, investment this year would not yield higher attendance this year.  The Twins didn't even have a deal with Comcast.  They had a deal with Bally's who had an agreement with Comcast.  You can make an argument that the Twins should have taken the potential of Comcast not renewing the Bally's agreement but you can't say the twins should have extended with Comcast because they didn't have an agreement with Comcast.

You're right. Saying Comcast was a misstatement on my part.

You are also right that this year spending doesn't equate to this year, but they are selling future revenue as well as current revenue. That's how you assign a value to a business.

[jctwins]

2 hours ago, Keaton said:

It’s beyond confusing at this point. They take the necessary time to develop & work up a core of foundational players (Royce, Wallner, Larnach, Jeffers, Ober, Ryan, Jax, etc.). They FINALLY sign some veteran studs to big deals (Correa, Buxton, Pablo, etc.) They take the necessary time to consistently develop deep farm systems & waves of talent (currently the 2nd ranked farm system in the MLB). They overcome the longest playoff losing streak in North American history. They do all this just to dismiss it later on with payroll deductions. Chalk it up to greed at this point. In my honest opinion, even if you are extremely comfortable with your salary and lifestyle as an owner of a professional sports team, you should still take all the opportunities to get better when they present themselves. Otherwise what’s the point of constantly investing in development if you’re never going to invest in the actual thing that pushes you over the top? Are you actually a good business owner with this philosophy? Maybe in other industries but idk…

 

all very frustrating. We’ve got all the right pieces and trajectory right now. Currently projected 4th highest team fWAR in the AL going into 2025. Twins have a fire goin but no one wants to throw more fuel on it…

This is where I thought Gleeman did a good job of putting words to this. At some point it goes beyond business and becomes a piece of the local culture that these owners are stewards of.

 

 

[wxman91]

There is an out-of-the box possibility here that I haven't seen much discussion of - the Pohlad family is asset rich but cash flow "poor".  I have no insight into this, but it tracks with what we've seen regarding the loss of tv revenue.  This isn't like Elon who can sell some of his shares of Tesla and get liquid immediately.  The Pohlads would have to sell companies in this scenario.