Twins President Derek Falvey is In Over His Head

[BH67]

Maybe Derek can't get a job anywhere else in MLB. Self-preservation may explain it all.

[Nshore]

I don't know much about Joe Pohlad's background, but I assume he doesn't have much experience in running a business operation or hiring and firing people.  He's learning the baseball business on the fly.  He seems to want to do the right thing.  Hopefully he will network with other savvy baseball people and understand - soon - that he needs to make some changes.

[chpettit19]

21 minutes ago, Riverbrian said:

I walked into 1 Twins Way once and I asked to sit down with the leaders of the department and go over operational structure.

Met with a nice persistent guy for a little while who instead of answering my questions... kept asking me to leave the conference room and the building. 

I got to say that I didn't learn much. 

I also admit that I forgot to ask him if there were any more teams that have one guy over seeing both business and operations. 

I just remember that I left a nearly full bottle of Mountain Dew on the conference table that he wouldn't let me go back and retrieve.    

You can look up job titles and roles for MLB teams on their websites. 

Orioles: POBaO: Mike Elias, POBuO: Catie Griggs
Red Sox: Chief Baseball Officer: Craig Breslow, President and CEO: Sam Kennedy
Yankees: Senior Vice President, General Manager: Brian Cashman, President: Randy Levine
Rays: POBO: Erik Neander, Chief Business Officer: William Walsh
Blue Jays: President and CEO: Mark Shapiro (there's one)

I'm not going to do the whole league for you (I chose the AL east because I knew Shapiro was one), but there's like 3 guys in MLB who have the dual role. I don't know of any in any other sports, but I don't follow those leagues as closely. It is not a common thing. Because both jobs are fulltime gigs. I don't think it's a leap to say Dave St Peter and Derek Falvey were both working a ton of hours when they both held the positions separately. I think it's then a pretty logical step to say that combining those roles would be quite a lot to put on 1 person. And if it wasn't, more teams would do it. But they don't. Because they're very different roles and both massive roles.

Of course Zoll does things. So does Daniel Adler and Kip Elliot and Sean Moore and John Avenson and Mike Clough and Mary Giesler and Matt Hoy and everyone else in the Twins front office. But they were all there doing those things while DSP was still working 60+ hours a week. But now they have less DSP (in theory) and part time Falvey instead. And the folks on the baseball side have no more Levine (who's hrs/efforts weren't replaced by another human as they didn't hire anyone new when he left) and a part time Falvey.

The Twins have taken 2 of the top 3 ranking officials from the business and baseball side and either completely removed their efforts (Levine) or greatly reduced them (DSP) and replaced them with just Falvey doing 2 jobs. I don't think it's at all a logical stretch to say Falvey is likely overstretched by doing the 2 biggest jobs in the org, that very few people in the league are ever entrusted to do, while the org continues to whittle away at the workforce around him.

[Vanimal46]

35 minutes ago, Woof Bronzer said:

I am so tired of the Pohlads just lying to fans over and over again.  Everyone associated with the ownership or FO thinks fans are idiots.  The Pohlads lie like people rich enough to know that they will never face accountability for the lies or anything else for that matter. 

What's hilarious about this is in order to "defend" themselves against the ongoing train wreck that is the Twins, the Pohlads thought the smart approach was to lie and say "we are more incompetent at business than every other owner in baseball to the tune of $50m operating deficits year over year."  When "we don't know what we're doing!" becomes your defense you might want to look inward a bit.  

And ya gotta love the shot at fans:  "Lagging attendance."  The Pohlads will never pass up an opportunity to blame fans for their incompetence. 

If they were losing $50mil/year they would have fired Falvey and St Peter a long time ago.  Any business on the planet would do so.

If they were losing $50 mil/year they would have sold the franchise for almost anything.   Certainly would have sold it for the $1.5b that was on the table.  Again - if they are telling the truth about the debt, then what they are saying is they turned down $1.5 billion dollars for a failing business losing a million dollars a week.  Perhaps the stupidest business decision in the history of capitalism.  

If they were losing $50mil/year they wouldn't have attracted investors.  If they are telling the truth about the debt than these investors are worse businesspeople than the Pohlads.

"Hey, Mr. Hedge Fund, want to pay down this business debt for us for a nice profit?"

"Sure, how are you going to make good on the loan?"

"Revenues."

"How's the business doing?"

"We're losing $50m/year."

"Sounds great, where do I sign?"

Don't believe the lies of these petty, incompetent people.  

It’s truly a slap in the face to anyone with just a little bit of financial literacy. I missed these puff pieces written in the Star Tribune when they were published, but they were linked in the yahoo story…

https://www.startribune.com/why-the-pohlad-family-decided-to-keep-the-minnesota-twins/601455080

https://www.startribune.com/joe-pohlad-keeps-the-faith-even-after-twins-fire-sale-and-fan-backlash/601474514

Of course Glen Taylor who owns the Star Tribune has no issue carrying the water for another local billionaire family. 

[Riverbrian]

15 minutes ago, chpettit19 said:

You can look up job titles and roles for MLB teams on their websites. 

Orioles: POBaO: Mike Elias, POBuO: Catie Griggs
Red Sox: Chief Baseball Officer: Craig Breslow, President and CEO: Sam Kennedy
Yankees: Senior Vice President, General Manager: Brian Cashman, President: Randy Levine
Rays: POBO: Erik Neander, Chief Business Officer: William Walsh
Blue Jays: President and CEO: Mark Shapiro (there's one)

I'm not going to do the whole league for you (I chose the AL east because I knew Shapiro was one), but there's like 3 guys in MLB who have the dual role. I don't know of any in any other sports, but I don't follow those leagues as closely. It is not a common thing. Because both jobs are fulltime gigs. I don't think it's a leap to say Dave St Peter and Derek Falvey were both working a ton of hours when they both held the positions separately. I think it's then a pretty logical step to say that combining those roles would be quite a lot to put on 1 person. And if it wasn't, more teams would do it. But they don't. Because they're very different roles and both massive roles.

Of course Zoll does things. So does Daniel Adler and Kip Elliot and Sean Moore and John Avenson and Mike Clough and Mary Giesler and Matt Hoy and everyone else in the Twins front office. But they were all there doing those things while DSP was still working 60+ hours a week. But now they have less DSP (in theory) and part time Falvey instead. And the folks on the baseball side have no more Levine (who's hrs/efforts weren't replaced by another human as they didn't hire anyone new when he left) and a part time Falvey.

The Twins have taken 2 of the top 3 ranking officials from the business and baseball side and either completely removed their efforts (Levine) or greatly reduced them (DSP) and replaced them with just Falvey doing 2 jobs. I don't think it's at all a logical stretch to say Falvey is likely overstretched by doing the 2 biggest jobs in the org, that very few people in the league are ever entrusted to do, while the org continues to whittle away at the workforce around him.

You put a lot of work into this. I won't argue but each situation probably has a different dynamic. 

Jerry Jones seems to be wearing a few hats with the Cowboys but I got tossed out of that conference room as well. 

I'm just saying that I can see where one person overseeing both departments can be an advantage in keeping the departments from colliding with each other. Working many hours a week with talented subordinates. Is it working at 1 Twins way. No idea but from my view... they got some major issues so maybe not.  

I've seen some interesting power structures. Granted it isn't sports but I have seen a Local GM in charge of his market with a department head working under him. I've seen that department head rise to a regional VP role of said department overseeing multiple markets that includes his local market...  resulting in the local GM answering to the new regional VP regionally while the regional VP answered to the local GM locally.

It was weird but it worked out because they could work together.    

[chpettit19]

3 minutes ago, Riverbrian said:

You put a lot of work into this. I won't argue but each situation probably has a different dynamic. 

Jerry Jones seems to be wearing a few hats with the Cowboys but I got tossed out of that conference room as well. 

I'm just saying that I can see where one person overseeing both departments can be an advantage in keeping the departments from colliding with each other. Working many hours a week with talented subordinates. Is it working at 1 Twins way. No idea but from my view... they got some major issues so maybe not.  

I've seen some interesting power structures. Granted it isn't sports but I have seen a Local GM in charge of his market with a department head working under him. I've seen that department head rise to a regional VP role of said department overseeing multiple markets that includes his local market...  resulting in the local GM answering to the new regional VP regionally while the regional VP answered to the local GM locally.

It was weird but it worked out because they could work together.    

I don't know if you've read or listened to anything from the end of year media session Falvey (and technically Zoll, but there's almost no answers from him out there) did, but the 2 departments are colliding. I mean, it's mostly just Falvey trying to corporate speak his way out of things like usual, but he essentially answered every question about the business side by saying "we need to win games and fans will show up and we'll make more money" while answering every question about competing by saying "it depends on how much money I have to spend." 

He can't compete without having more money to spend and he can't make more money without competing. He runs both sides and they're still colliding because neither side can succeed without the other side first succeeding.

[USAFChief]

1 hour ago, Woof Bronzer said:

I am so tired of the Pohlads just lying to fans over and over again.  Everyone associated with the ownership or FO thinks fans are idiots.  The Pohlads lie like people rich enough to know that they will never face accountability for the lies or anything else for that matter. 

What's hilarious about this is in order to "defend" themselves against the ongoing train wreck that is the Twins, the Pohlads thought the smart approach was to lie and say "we are more incompetent at business than every other owner in baseball to the tune of $50m operating deficits year over year."  When "we don't know what we're doing!" becomes your defense you might want to look inward a bit.  

And ya gotta love the shot at fans:  "Lagging attendance."  The Pohlads will never pass up an opportunity to blame fans for their incompetence. 

If they were losing $50mil/year they would have fired Falvey and St Peter a long time ago.  Any business on the planet would do so.

If they were losing $50 mil/year they would have sold the franchise for almost anything.   Certainly would have sold it for the $1.5b that was on the table.  Again - if they are telling the truth about the debt, then what they are saying is they turned down $1.5 billion dollars for a failing business losing a million dollars a week.  Perhaps the stupidest business decision in the history of capitalism.  

If they were losing $50mil/year they wouldn't have attracted investors.  If they are telling the truth about the debt than these investors are worse businesspeople than the Pohlads.

"Hey, Mr. Hedge Fund, want to pay down this business debt for us for a nice profit?"

"Sure, how are you going to make good on the loan?"

"Revenues."

"How's the business doing?"

"We're losing $50m/year."

"Sounds great, where do I sign?"

Don't believe the lies of these petty, incompetent people.  

Bingo.

I cant conceive of a way the Twins are actually $500M in debt.

For one thing, there's no chance the three sons would have let young Joe stay in the job. 

And then everything you said. 

Makes zero sense. None. 

[Riverbrian]

10 minutes ago, chpettit19 said:

I don't know if you've read or listened to anything from the end of year media session Falvey (and technically Zoll, but there's almost no answers from him out there) did, but the 2 departments are colliding. I mean, it's mostly just Falvey trying to corporate speak his way out of things like usual, but he essentially answered every question about the business side by saying "we need to win games and fans will show up and we'll make more money" while answering every question about competing by saying "it depends on how much money I have to spend." 

He can't compete without having more money to spend and he can't make more money without competing. He runs both sides and they're still colliding because neither side can succeed without the other side first succeeding.

The view from my chair... The issues seem quite apparent.

The phrase that comes to mind is "Uff Da". 

But... that's only because my mother was full blooded Norwegian. 

Otherwise I might have said. "WTF".  

 

 

[Woof Bronzer]

11 minutes ago, Riverbrian said:

The view from my chair... The issues seem quite apparent.

The phrase that comes to mind is "Uff Da". 

But... that's only because my mother was full blooded Norwegian. 

Otherwise I might have said. "WTF".  

 

 

What seems clear to me is, whatever Falvey's role is, the Pohlads think he is performing it at a high level.  Right?  He's been here 9 years, been promoted, etc.  They must really like what he does, which leads me to believe their performance indicators for that position have little to do with what happens on the field.  

Did you really pop in at 1 Twins Way to ask about their org chart?  Because that is...awesome.  Sorry about the Dew though.  

[Woof Bronzer]

1 hour ago, Nshore said:

I don't know much about Joe Pohlad's background, but I assume he doesn't have much experience in running a business operation or hiring and firing people.  He's learning the baseball business on the fly.  He seems to want to do the right thing.  Hopefully he will network with other savvy baseball people and understand - soon - that he needs to make some changes.

He's a communications major who ran 2 previous Pohlad media businesses.  He destroyed both of those businesses so badly the Pohlads ended up selling both off for pennies on the dollar, losing millions in the process.  (Maybe this is where part of their debt comes from.)

I know this wasn't what you wanted to hear.  But, yeah, he's got experience running businesses all right. 

[DocBauer]

Is he in over his head? IDK. There's some interesting discussion going back and forth about hus duties/titles and how other teams very seldom combine both the business and the team side. It's just way, way too big of a job for a single person to perform. As already stated, each individual job requires long hours and additional help. 

So fine. Does Falvey have so many good and trusted people around him that he can split the job 50/50 and delegate duties to be done satisfactorily? Maybe he does. Maybe he's got a whole cabinet of smart and trusted people he doles out duties to and they get the job done. If so, these unnamed and unknown individuals might be poached soon from other organizations. 

Is DSP only hanging around until the minority owners sale goes through? I could understand that since he was still on the clock when this whole thing started. But is he gone after this? Who's running the business side, him or Falvey? Because it was supposed to be Falvey months ago. And DSP should only be a phone call or text message away if a question needs to be answered. So why is he still hanging around? Again, maybe it's just to see the minority purchase go through.

But with so few sports teams giving ONE GUY all this control/power, there must be a reason right? Right? But again, maybe Falvey just had a wonderfully talented group of people around him that we just don't know. 

After Levine left, it was stated they weren't going to replace him as the position/title was pretty much irrelevant with Falvey the #1 guy and some trusted lieutenants below him. So after the 2024 season comes to a thunderous crash, Falvey gets PROMOTED and Zole gets PROMOTED to the GM chair that we were told didn't need to be filled. OK, maybe that changed with Falvey's promotion. But other than being told Zole is smart and has helped finalize deals in the past, and done a lot of contract work, who exactly is Zole? What are the components of his job? Does he just jump when Falvey tells him to? Or does he have real power. But if he has any real power, why isn't he mentioned by anyone, anywhere concerning the deadline deals? Why does Falvey issue all statements and perform all interviews or speak for almost the entirety of a press conference? Is that just Falvey performing duties that he thinks he should do as the #1 guy?

It's all very confusing and it's really hard to see who exactly is in charge and where. And we don't need to understand it all. No business is under any obligation to inform us as to how a normal day works, and exactly who picks up the phone, and who makes the coffee. All we really need to care about is the final results.

(I'm leaving ownership out of this as we all know the issues there).

What's so confounding is Falvey heaping praise on his manager, and stating repeatedly that he takes personal responsibility for the team failing, while simultaneously firing said manager, and offering up ZERO honest comments concerning any sort of change that might provide real optimism. IDK, personal responsibility should mean he's out of a job if we don't begin to see changes, IMO.

Asked about payroll and hopes for 2026...which might include Lopez and Ryan being kept...we hear Falvey "hopes" they'll be around and that they're part of the plan at this time, but it depends on payroll. Asked about payroll, he says he doesn't know yet until he speaks to the owners and a harder look is taken at the business side. Huh? So you can't comment honestly on the roster because you don't know what business is thinking, but you're also the #1 guy in charge of the business side? Why all the coach/political speak and just say something honest similar to: "We just don't know exactly where the payroll is going to be for next season yet. We have an idea. But there's still moving parts such as final approval of our new minority owners that have to be put in place before I can give you an accurate answer. So at this time. I don't want to give a number that might not be fully accurate."

That answer stinks, but at least it's honest. But being in charge of just about EVERYTHING and saying your left hand hasn't been introduced to your right hand yet so you can't answer is disingenuous at best.

Once again, we don't need to know how the product is manufactured behind the scenes. All we really need is for the final product to turn out well. But when those in charge of the manufacturing give you the impression they aren't running the business well, it's a little hard to want to have faith in the purchase of that product. 

[David Maro]

If a company has a FO in place for 7 years or 9 years and it's failing why would any owner give that person more responsibility. This organization is a train wreck getting worse by the day. If left the same you can only imagine who he will bring in as manager. And for that matter who in their right mind would want the job.

[Nshore]

33 minutes ago, Woof Bronzer said:

He's a communications major who ran 2 previous Pohlad media businesses.  He destroyed both of those businesses so badly the Pohlads ended up selling both off for pennies on the dollar, losing millions in the process.  (Maybe this is where part of their debt comes from.)

I know this wasn't what you wanted to hear.  But, yeah, he's got experience running businesses all right. 

Wow - no, I didn't know that. about Joe Pohlad.  I guess the Twins are doomed.  Or maybe by some miracle he'll learn something.  People have failed spectacularly before, then later find success.  The most important thing for him is to surround himself with the right people.  Because I think we're stuck with Joe.

[Riverbrian]

41 minutes ago, Woof Bronzer said:

What seems clear to me is, whatever Falvey's role is, the Pohlads think he is performing it at a high level.  Right?  He's been here 9 years, been promoted, etc.  They must really like what he does, which leads me to believe their performance indicators for that position have little to do with what happens on the field.  

Did you really pop in at 1 Twins Way to ask about their org chart?  Because that is...awesome.  Sorry about the Dew though.  

The leading indicator of satisfaction of job performance is continued employment.

I have levied a lot of criticism on this website concerning the operational side based on what I strongly believe.

The one thing that I have never done despite the tonnage of my criticism is assume that any of them are idiots. Therefore I believe that the Pohlad's showing faith in Derek was come by honestly, through communication. 

Sitting the corporate office... Umm... Yeah... Sure... Yup... I did that. I remember the day clearly... just a few hours earlier... I caught a Blue Fin Tuna in the hotel bathtub. I wasn't sure how it got in there but... I tried a lot of different baits until I got him to bite. If I knew that tuna liked the coffee grounds from the Hotel provided K Cup... it wouldn't have taken me that long. 

For those concerned about the well being of the Tuna. I released it back into the tub. I didn't have any mayo or salad dressing to make a sandwich. 

[DJL44]

1 hour ago, USAFChief said:

Bingo.

I cant conceive of a way the Twins are actually $500M in debt.

For one thing, there's no chance the three sons would have let young Joe stay in the job. 

And then everything you said. 

Makes zero sense. None. 

Especially when it was $400M in debt earlier in the year when they were selling the team. They want us to believe they fielded a team with a $130M payroll and lost $100M this season. That would mean they need a $30M payroll to make a profit. They supposedly lost $100M this year and the only people who got fired are the baseball manager (who has no responsibility for profit and loss) and a bunch of scouts

[chpettit19]

20 minutes ago, DJL44 said:

Especially when it was $400M in debt earlier in the year when they were selling the team. They want us to believe they fielded a team with a $130M payroll and lost $100M this season. That would mean they need a $30M payroll to make a profit. They supposedly lost $100M this year and the only people who got fired are the baseball manager (who has no responsibility for profit and loss) and a bunch of scouts

I heard the tariffs on scouts are really causing quite a spike in salaries.

[TheLeviathan]

3 hours ago, Woof Bronzer said:

I am so tired of the Pohlads just lying to fans over and over again.  Everyone associated with the ownership or FO thinks fans are idiots.  The Pohlads lie like people rich enough to know that they will never face accountability for the lies or anything else for that matter. 

What's hilarious about this is in order to "defend" themselves against the ongoing train wreck that is the Twins, the Pohlads thought the smart approach was to lie and say "we are more incompetent at business than every other owner in baseball to the tune of $50m operating deficits year over year."  When "we don't know what we're doing!" becomes your defense you might want to look inward a bit.  

And ya gotta love the shot at fans:  "Lagging attendance."  The Pohlads will never pass up an opportunity to blame fans for their incompetence. 

If they were losing $50mil/year they would have fired Falvey and St Peter a long time ago.  Any business on the planet would do so.

If they were losing $50 mil/year they would have sold the franchise for almost anything.   Certainly would have sold it for the $1.5b that was on the table.  Again - if they are telling the truth about the debt, then what they are saying is they turned down $1.5 billion dollars for a failing business losing a million dollars a week.  Perhaps the stupidest business decision in the history of capitalism.  

If they were losing $50mil/year they wouldn't have attracted investors.  If they are telling the truth about the debt than these investors are worse businesspeople than the Pohlads.

"Hey, Mr. Hedge Fund, want to pay down this business debt for us for a nice profit?"

"Sure, how are you going to make good on the loan?"

"Revenues."

"How's the business doing?"

"We're losing $50m/year."

"Sounds great, where do I sign?"

Don't believe the lies of these petty, incompetent people.  

Great post.  I'd like to add one more thing to it if I may?

If the Pohlads don't like us questioning their commitment (or, frankly, their honesty about debt) than I have a very simple proposal for them:

Open your books to the public and show us.  

[Woof Bronzer]

13 minutes ago, TheLeviathan said:

Great post.  I'd like to add one more thing to it if I may?

If the Pohlads don't like us questioning their commitment (or, frankly, their honesty about debt) than I have a very simple proposal for them:

Open your books to the public and show us.  

Yes!  One hundred million percent.  Bring the receipts!

I mean this is a family that 25 years ago tried to contract the Twins out of existence.  But sure Tom, the Pohlads have an unwavering commitment to the team.  

[USAFChief]

22 minutes ago, chpettit19 said:

I heard the tariffs on scouts are really causing quite a spike in salaries.

To be fair, they did ****can the pro scouting department. 

[The Great Hambino]

2 hours ago, USAFChief said:

Bingo.

I cant conceive of a way the Twins are actually $500M in debt.

For one thing, there's no chance the three sons would have let young Joe stay in the job. 

And then everything you said. 

Makes zero sense. None. 

As a shady accountant myself, I can think of a few ways to make this plausible (at least on paper, on a non-GAAP basis):

- Expensing instead of capitalizing all your capital improvements, like the 2022-23 Target Field makeover).  This would create big losses that year that could be used to claim average losses of whatever per year over whatever time frame suits their argument

- Paying exorbitant management fees to a related party.  Are there any other Pohlad companies that needed cash infusions over the last few years?  Also allows them to tell the technical truth but functional lie that they don't take any money out of the business for themselves (read: an equity distribution) even though a management fee to yourself (which reduces income) and an equity distribution (which doesn't reduce income) are functionally the exact same thing.

- Paying exorbitant executive compensation (this one should be self-explanatory) to people with a name that rhymes with "Schmolad"

- Funding all of the above by racking up debt at Twins Baseball LLC.  It's a slimy way of borrowing against the Twins to fund other enterprises without borrowing against the Twins to fund other enterprises

They can technically do all this.  The SEC doesn't care since they're not publicly traded.  The IRS doesn't care since the management fees/executive comp are income-neutral activities (the Twins are a partnership and any deduction by the Twins is picked up as income somewhere else by the Pohlads).  Their lenders aren't really gonna care since they know the MLB isn't going to allow a franchise to go belly up (it's guaranteed, even if not explicitly), plus the fact that they're likely showing their lenders GAAP-compliant financials that show a better, more honest financial picture of the franchise.

The best part?  All of the above would be added back to income as normalizing adjustments when earnings are being used to place a valuation on the business for, say, the purchase of said business (this is why MLB doesn't really care, even if you could argue that they probably should)

So they can claim poverty when justifying spending cuts while enriching themselves and still maintaining the highest franchise valuation possible.  All while being able to tell whatever tale suits them without technically lying.

Dishonest truth-telling, brought to you by the magic of accounting

[USAFChief]

2 minutes ago, The Great Hambino said:

As a shady accountant myself, I can think of a few ways to make this plausible (at least on paper, on a non-GAAP basis):

- Expensing instead of capitalizing all your capital improvements, like the 2022-23 Target Field makeover).  This would create big losses that year that could be used to claim average losses of whatever per year over whatever time frame suits their argument

- Paying exorbitant management fees to a related party.  Are there any other Pohlad companies that needed cash infusions over the last few years?  Also allows them to tell the technical truth but functional lie that they don't take any money out of the business for themselves (read: an equity distribution) even though a management fee to yourself (which reduces income) and an equity distribution (which doesn't reduce income) are functionally the exact same thing.

- Paying exorbitant executive compensation (this one should be self-explanatory) to people with a name that rhymes with "Schmolad"

- Funding all of the above by racking up debt at Twins Baseball LLC.  It's a slimy way of borrowing against the Twins to fund other enterprises without borrowing against the Twins to fund other enterprises

They can technically do all this.  The SEC doesn't care since they're not publicly traded.  The IRS doesn't care since the management fees/executive comp are income-neutral activities (the Twins are a partnership and any deduction by the Twins is picked up as income somewhere else by the Pohlads).  Their lenders aren't really gonna care since they know the MLB isn't going to allow a franchise to go belly up (it's guaranteed, even if not explicitly), plus the fact that they're likely showing their lenders GAAP-compliant financials that show a better, more honest financial picture of the franchise.

The best part?  All of the above would be added back to income as normalizing adjustments when earnings are being used to place a valuation on the business for, say, the purchase of said business (this is why MLB doesn't really care, even if you could argue that they probably should)

So they can claim poverty when justifying spending cuts while enriching themselves and still maintaining the highest franchise valuation possible.  All while being able to tell whatever tale suits them without technically lying.

Dishonest truth-telling, brought to you by the magic of accounting

What he said.

[rv78]

3 hours ago, chpettit19 said:

I don't know if you've read or listened to anything from the end of year media session Falvey (and technically Zoll, but there's almost no answers from him out there) did, but the 2 departments are colliding. I mean, it's mostly just Falvey trying to corporate speak his way out of things like usual, but he essentially answered every question about the business side by saying "we need to win games and fans will show up and we'll make more money" while answering every question about competing by saying "it depends on how much money I have to spend." 

He can't compete without having more money to spend and he can't make more money without competing. He runs both sides and they're still colliding because neither side can succeed without the other side first succeeding.

This may sound like the perfect excuse for failing but there are numerous examples of other ball clubs spending less, or at least similarly, and winning more. That's the part that he chooses to ignore because then it would directly reflect back at himself. Like I said, extending Rocco this summer, then firing him at the end of the season, shows he is bad at making "business" decisions. Not putting a winning product on the field regardless of payroll, (other clubs are doing it) are just poor "baseball" decisions. When a person is bad at both jobs why, as an owner of that business, would you have him doing 1 of those jobs much less 2? Because they don't care. When he says he is responsible and the Pohlads don't take action because of it, the Pohlads also fail. They don't care.

[chpettit19]

1 minute ago, rv78 said:

This may sound like the perfect excuse for failing but there are numerous examples of other ball clubs spending less, or at least similarly, and winning more. That's the part that he chooses to ignore because then it would directly reflect back at himself. Like I said, extending Rocco this summer, then firing him at the end of the season, shows he is bad at making "business" decisions. Not putting a winning product on the field regardless of payroll, (other clubs are doing it) are just poor "baseball" decisions. When a person is bad at both jobs why, as an owner of that business, would you have him doing 1 of those jobs much less 2? I'm sure you will never hear Falvey say, Other teams can win with identical payrolls to ours so they must be doing a better job than me. The old saying goes, sometimes the truth hurts, but facing the truth makes you a better person or better at your job. Maybe he's said it to himself and just won't say it to the public. Unfortunately, we will only find out over time, which may takes years.

He didn't "extend" Rocco this summer. He picked up his option before the season started. Like nearly every team does. There are very few lame duck managers in major league baseball. It was reported in the middle of the season because that's when it leaked. But even when Hayes reported it he said he didn't think that was when the option was actually picked up. Falvey spoke on it at the presser Tuesday and said it was before the season. I don't think Falvey wanted to fire Rocco now, though. I think he was either told directly that he had to, or felt it was his only choice. 

And you can absolutely be successful with less money. It's not easy, and there's very few teams that actually do it, but it can be done. I think simply comparing payrolls in any given season misses a lot of important context, though. Cutting payroll by 30 mil after OKing Lopez and Correa contracts has a very real impact on team building. The question then becomes what Falvey (and Levine) knew, or should have known, at the time of those contract signings. If the Pohlads and DSP were promising them 150-160+ mil payrolls moving forward and then 1 year later cut it to 130 that is brutal for a front office.

I'm not defending Falvey (even though I realize it sounds like I am). He deserves to be fired. He should be fired. The whole org needs to be cleaned out and they need to start over from the top down. It's broken. I'm just trying to get some details straight. The option being picked up is significantly overblown because of the timing of it being reported, and there is more to looking at payroll than just a 1-year snapshot. But Falvey has been here 9 years. And he did have plenty of payroll for multiple failed seasons before the last 2. I don't know why he should get a shot at a rebuild. He had his chance. He failed. But there are very few people in major league baseball who are as entrenched and as powerful as him. I don't understand why. But I don't understand much of what this franchise or the Pohlads do these days.

[The Great Hambino]

9 minutes ago, chpettit19 said:

And you can absolutely be successful with less money. It's not easy, and there's very few teams that actually do it, but it can be done. I think simply comparing payrolls in any given season misses a lot of important context, though. Cutting payroll by 30 mil after OKing Lopez and Correa contracts has a very real impact on team building. The question then becomes what Falvey (and Levine) knew, or should have known, at the time of those contract signings. If the Pohlads and DSP were promising them 150-160+ mil payrolls moving forward and then 1 year later cut it to 130 that is brutal for a front office.

 

Absolutely, the timing of the right-sizing needs to be considered when determining what kind of payroll they're really functionally working with.

The 2025 opening day payroll was $142MM, or 18th highest in the league.  But since $58MM of that was being spent on two players, they were also functionally working with a payroll of $84MM on all but two players.   Compare that to the Guardians, for example.  Their opening day payroll $100MM, but removing their two top salaries puts them at $69MM, which really shrinks the perceived gap between the available resources between the two teams. (Ironically, one of those top-two contracts was Carlos Santana, who signed with Cleveland in part because the Twins couldn't afford to keep him).  Doing the same adjustment with the Tigers and Royals puts the Twins below them in terms of bottom-24 spending.  That kind of lopsided payroll is incredibly irresponsible considering the Pohlads greenlit that long-term spending, reversed course months later (effectively drastically reducing their future flexibility and ability to pivot), and showed enough approval of Falvey's performance to grant him more power since then.

You can certainly question the wisdom of many of Falvey's decisions, but I can't put the blame for the lopsidedness of the payroll on him.

[Blyleven2011]

5 hours ago, Riverbrian said:

I walked into 1 Twins Way once and I asked to sit down with the leaders of the department and go over operational structure.

Met with a nice persistent guy for a little while who instead of answering my questions... kept asking me to leave the conference room and the building. 

I got to say that I didn't learn much. 

I also admit that I forgot to ask him if there were any more teams that have one guy over seeing both business and operations. 

I just remember that I left a nearly full bottle of Mountain Dew on the conference table that he wouldn't let me go back and retrieve.    

I got to admit , I wish I was with you , it would of been hilarious to banter the twins personal ...

Telling a concerned fan to leave tells you all you need to know about the organization and how it operates , they don't care about the fans ....

[Vanimal46]

2 hours ago, DJL44 said:

Especially when it was $400M in debt earlier in the year when they were selling the team. They want us to believe they fielded a team with a $130M payroll and lost $100M this season. That would mean they need a $30M payroll to make a profit. They supposedly lost $100M this year and the only people who got fired are the baseball manager (who has no responsibility for profit and loss) and a bunch of scouts

Why would we believe anything they say when they can't even state the correct number they're in debt? If the economics of owning a mid/small market team is as bad as the Pohlads portray them to be, we would have up to 15 teams closing shop. If the economics is that bad, they would have taken the $1.5 B offer from Ishbia immediately and died laughing that someone was stupid enough to offer that much. 

[Riverbrian]

2 minutes ago, Blyleven2011 said:

I got to admit , I wish I was with you , it would of been hilarious to banter the twins personal ...

Telling a concerned fan to leave tells you all you need to know about the organization and how it operates , they don't care about the fans ....

It would have been nice if you were along. Two is much harder to escort out. 

I remember the day clearly... After I left the building... I walked over to 1st Avenue (Princes Place). Jumped up on stage and sang Bob Dylan Covers with a Nu-Metal Band out of Wheaton Minnesota. 

The band was a little confused at first since I didn't ask or introduce myself before I jumped on the Mic and broke into "Don't Think Twice... It's Alright". But, they were able to keep up. 

You could have played some percussion.  

 

[Western SD Fan]

1 hour ago, The Great Hambino said:

As a shady accountant myself, I can think of a few ways to make this plausible (at least on paper, on a non-GAAP basis):

- Expensing instead of capitalizing all your capital improvements, like the 2022-23 Target Field makeover).  This would create big losses that year that could be used to claim average losses of whatever per year over whatever time frame suits their argument

- Paying exorbitant management fees to a related party.  Are there any other Pohlad companies that needed cash infusions over the last few years?  Also allows them to tell the technical truth but functional lie that they don't take any money out of the business for themselves (read: an equity distribution) even though a management fee to yourself (which reduces income) and an equity distribution (which doesn't reduce income) are functionally the exact same thing.

- Paying exorbitant executive compensation (this one should be self-explanatory) to people with a name that rhymes with "Schmolad"

- Funding all of the above by racking up debt at Twins Baseball LLC.  It's a slimy way of borrowing against the Twins to fund other enterprises without borrowing against the Twins to fund other enterprises

They can technically do all this.  The SEC doesn't care since they're not publicly traded.  The IRS doesn't care since the management fees/executive comp are income-neutral activities (the Twins are a partnership and any deduction by the Twins is picked up as income somewhere else by the Pohlads).  Their lenders aren't really gonna care since they know the MLB isn't going to allow a franchise to go belly up (it's guaranteed, even if not explicitly), plus the fact that they're likely showing their lenders GAAP-compliant financials that show a better, more honest financial picture of the franchise.

The best part?  All of the above would be added back to income as normalizing adjustments when earnings are being used to place a valuation on the business for, say, the purchase of said business (this is why MLB doesn't really care, even if you could argue that they probably should)

So they can claim poverty when justifying spending cuts while enriching themselves and still maintaining the highest franchise valuation possible.  All while being able to tell whatever tale suits them without technically lying.

Dishonest truth-telling, brought to you by the magic of accounting

One thing to add is that the debt service (interest payments) on the amount borrowed can also be claimed as an expense by Twins Baseball, LLC increasing the loss.  A simple calculation of $500M at current Fed rates + 1% (a reasonable assumption for billionaires borrowing money) gives us a Fed rate of 4.25% + 1%, or 5.25%, or $26.25M per year in interest.  That amount sounds awful close to the amount that the team had to "right-size" after the 2023 season.

[Blyleven2011]

1 minute ago, Riverbrian said:

It would have been nice if you were along. Two is much harder to escort out. 

I remember the day clearly... After I left the building... I walked over to 1st Avenue (Princes Place). Jumped up on stage and sang Bob Dylan Covers with a Nu-Metal Band out of Wheaton Minnesota. 

The band was a little confused at first since I didn't ask or introduce myself before I jumped on the Mic and broke into "Don't Think Twice... It's Alright". But, they were able to keep up. 

You could have played some percussion.  

 

We probably would have spent the night in jail if I went along  ...

But if you want to try it again , let me know , I'll pay the bail .  ....

[The Great Hambino]

2 minutes ago, Western SD Fan said:

One thing to add is that the debt service (interest payments) on the amount borrowed can also be claimed as an expense by Twins Baseball, LLC increasing the loss.  A simple calculation of $500M at current Fed rates + 1% (a reasonable assumption for billionaires borrowing money) gives us a Fed rate of 4.25% + 1%, or 5.25%, or $26.25M per year in interest.  That amount sounds awful close to the amount that the team had to "right-size" after the 2023 season.

Yet another expense that would typically be added back for business valuation purposes