New Money Enters the Fold as Twins Secure First of Two Limited Partners

[Woof Bronzer]

6 minutes ago, DJL44 said:

To me this sounds like "I'll pay off your debt in exchange for equity, but I want a guaranteed return on my equity".

In 10 years we'll be remembering the Pohlads with fondness for their generosity.

I'm hoping it's more "we'll take the debt off your books but we're charging you a mob boss-like interest rate, and the loan is going to be secured by a small stake in the franchise".  These vulture capital firms would seem to have little interest in long term appreciation, they just want fast profits.  

Because, yeah, if a private equity firm ever becomes majority stakeholder we will yearn for the Pohlad days.  

[ziggy]

For all we know Minneapolis based Varde Partners, the worldwide multi billion dollar credit investment corporation is who holds the notes on the debt and simply forclosed on the debt without any other avenues to collect.

Same as the salary saved by trading the big three will be reinvested into the club instead of going into the Polhads pocket or for their newest Ferrari.

[LewFordLives]

16 minutes ago, DJL44 said:

To me this sounds like "I'll pay off your debt in exchange for equity, but I want a guaranteed return on my equity".

In 10 years we'll be remembering the Pohlads with fondness for their generosity.

Agreed (not the generosity part). There's an infinite number of ways they could have structured this. It could be some kind of preferred stock that pays them a guaranteed dividend, or maybe it's just straight equity. Sports teams have generally proven to be a good investment over time. 

[jaimedude]

30 minutes ago, ziggy said:

For all we know Minneapolis based Varde Partners, the worldwide multi billion dollar credit investment corporation is who holds the notes on the debt and simply forclosed on the debt without any other avenues to collect.

Same as the salary saved by trading the big three will be reinvested into the club instead of going into the Polhads pocket or for their newest Ferrari.

I doubt it, Pohlads have always financed everything related to the Twins through their own banks. Only thing I can think of is this large amount of debt is including the Pohlad Stadium costs, and yearly operating losses capitializeded as debt for Tax purposes. I mean the original loan to buy the team from 1984 is still on the Twins balance sheet, which they pay themselves interest from. The stadium portion of the Pohlad debt  has to be on the books like some type of loan since they don't own the building 

[howeda7]

1 hour ago, Woof Bronzer said:

That is absolutely what private equity does.  Slash costs to a bare minimum, squeeze out as much short term profit as possible, and then when they've bled it dry, sell or write off the asset.  It's their whole business model.  

I understand that. But pro sports franchises aren't that similar to most regular businesses. If they "bleed it dry" the value by 2027 will be less than it is now.

That might be fine if they planned to sell and move the team, but they can't move until at least 2040. Gutting the payroll to $60 million for next year saves $30 million at best and likely harms the value of the franchise by more than that. 

The value to the equity firm is a reasonable gamble that the franchise will be worth a lot more in 2027 with a new CBA than what they are paying for their current share. And that's a decent bet. 

 

[Cody Christie]

1 hour ago, DJL44 said:

To me this sounds like "I'll pay off your debt in exchange for equity, but I want a guaranteed return on my equity".

Back in August, I wrote about how I think the Pohlads are still going to sell the team but are waiting until the new CBA offers a better financial situation for mid-market teams. An equity firm could be looking at the same situation and seeing and opportunity to make money.

 

[lecroy24fan]

8 hours ago, SF Twins Fan said:

I did see a post on Twitter claiming Darren Wolfson mentioned there would be clarity on one of the buyers by the end of this week.  That poster didn't mention a name; however I didn't actually see the tweet by Darren Wolfson and couldn't find it in a brief search through his feed.  It could have been him responding in the comments of one of his other posts, but I feel like he's much more credible than Walters.

So, however, we will have more clarity by the end of the week.  There could be a lot to talk about by the end of the week with the draft lottery and GM meetings going on this week.

Wolfson said it on the news.

[old nurse]

18 hours ago, amjgt said:

 

An additional $80M spent the last two seasons (total) probably would have more than paid for itself in franchise value as well as interest from potential new owners. I suspect if the last two seasons had playoff appearances the Pohlads would have no problem finding new ownership groups 

One could also say that spending an additional 80 million would have only increases the debt by 80 million. The value would not increase because the franchise would be going backwards on the balance sheet.  To pay for that 80 million would take an additional 3 million fans 

[old nurse]

17 hours ago, Major League Ready said:

I Googled how much does the average fan spend at a MLB game and got a lot of different answers but your estimated average spend is double the highest estimates I found.   

Statistica said that gate receipts for the Twins in 2024 were. 81 million. The last revenue per fan I saw put the spending per fan under 60.  Licensed merchandise, I do believe the profit goes pretty much to the licensee, MLB. Read that when some one was writing about Ohtani to Dodgers and jersey sales not benefiting the team. Sites that used to publish this data reminded people yhat how much sales tax is paid is a public record 

[Major League Ready]

47 minutes ago, old nurse said:

Statistica said that gate receipts for the Twins in 2024 were. 81 million. The last revenue per fan I saw put the spending per fan under 60.  Licensed merchandise, I do believe the profit goes pretty much to the licensee, MLB. Read that when some one was writing about Ohtani to Dodgers and jersey sales not benefiting the team. Sites that used to publish this data reminded people yhat how much sales tax is paid is a public record 

Good point on visibility through sales tax records.  That would be $41.50 per person so that's a pretty viable indication of the average ticket price.  It's the other half of this equation (concessions) that's a not so clear. 

In this discussion, concession revenue has been approached as if the Twins get 100% of the revenue.  Delaware North is their concessions partner.  What percentage do they get and of course there are product costs although gross profit margins have to be 80 plus percent,   I would assume the staff are employees of Delaware North.   My guess is the Twins take a percentage.  That would make it transparent between teams for calculating the revenue split.  

[Swing Batter-Batter]

22 hours ago, DJL44 said:

Expect Varde Partners to act like any private equity group: extreme cost cuts while you drain every last dollar out of the organization and then sell the brand (which is all that is left) to some other company.

THAT is exactly what private equity does.

[dcswede]

Make no mistake. This is not a white knight billionaire investor making a vanity buy - some Steve Ballmer, Rob Walton or Steve Cohen with dreams of hoisting a World Series Trophy. If it were, it would be Brad Bauer making the investment, not Varde Partners. This is a real estate-heavy PE firm interested in seeking short to medium term returns for its roughly 500 institutional clients - many of whom are likely international. Buy and hold is not part of the strategy. They're going to insist on a path back to liquidity, and that's only going to come from a sale. When that day cones, does Varde care one whit if the team stays in Minnesota? Of course not. It may initially sound a little warm and fuzzy that Varde is a Minnesota-based firm, but if you're one of their London, Seoul or NYC investors, you expect the firm will demand the biggest return for your money. The fact that the Pohlads went this direction - and that MLB has approved it - is telling. I suspect this is going to get uglier than any of us had imagined.

[DJL44]

15 hours ago, howeda7 said:

I understand that. But pro sports franchises aren't that similar to most regular businesses. If they "bleed it dry" the value by 2027 will be less than it is now.

The value is never going to drop below the value of an expansion franchise.

[Woof Bronzer]

3 hours ago, old nurse said:

One could also say that spending an additional 80 million would have only increases the debt by 80 million. The value would not increase because the franchise would be going backwards on the balance sheet.  To pay for that 80 million would take an additional 3 million fans 

The debt isn't operating debt, it's debt from the Pohlads' other failed businesses that they tried to shelter with the Twins.  The value of the franchise has increased an average of $40 million/year since the Pohlads have owned it, totally independent of team success.  So the original poster was exactly correct, spending an extra 80 mil over 2 years would have been offset with the added franchise valuation.  

[Woof Bronzer]

16 hours ago, howeda7 said:

I understand that. But pro sports franchises aren't that similar to most regular businesses. If they "bleed it dry" the value by 2027 will be less than it is now.

Pro sports franchise values don't go down.   

[old nurse]

19 minutes ago, Woof Bronzer said:

The debt isn't operating debt, it's debt from the Pohlads' other failed businesses that they tried to shelter with the Twins.  The value of the franchise has increased an average of $40 million/year since the Pohlads have owned it, totally independent of team success.  So the original poster was exactly correct, spending an extra 80 mil over 2 years would have been offset with the added franchise valuation.  

Prove it rather than shovel it. 

[Woof Bronzer]

1 hour ago, old nurse said:

Prove it rather than shovel it. 

Well, the Pohlads bought the team in 1984 for $44m.  In 2025 they had an offer for $1.5 billion.  I'll let you do the math on the average annual increase to the franchise value, and given the Twins "performance" in most of the 90s and 2010s, do your own critical thinking about the correlation between franchise value and winning.  Let me know what you learn!

[old nurse]

9 minutes ago, Woof Bronzer said:

Well, the Pohlads bought the team in 1984 for $44m.  In 2025 they had an offer for $1.5 billion.  I'll let you do the math on the average annual increase to the franchise value, and given the Twins "performance" in most of the 90s and 2010s, do your own critical thinking about the correlation between franchise value and winning.  Let me know what you learn!

Prove the money was used for private expenses, prove that spending $80 millions would pay for itself. You can’t do either. 

[David Maro]

Let's be honest here,this organization has become a laughing stock and is now going to be dismantled bit by bit. Anytime Equity Co get involved the end is not pretty. They sell everything of value,in this case it will be trading the players with the most money owed. I guess we will see just how the Winter meetings play out. 

[howeda7]

4 hours ago, Woof Bronzer said:

Pro sports franchise values don't go down.   

Over the long term, no. Over a 2 year period, gutting payroll, having league worst attendance, bad TV distribution and then a long lockout certainly could. Or at least hinder how much it goes up.

Again, I think the equity value here is they're buying in at $1.5 or $1.6 billion valuation and  the new CBA making the team worth $2 billion or more. Gutting payroll and therefore the season ticket base and fan base does the opposite, and hurts valuation in exchange for a small amount of short-term cash flow. 

[USAFChief]

On 12/8/2025 at 8:56 AM, bunsen82 said:

This is pretty specific information.   I don't think even Cody would throw a name out of a venture party without it being confirmed by multiple sources.  

First of all, it's Cody Christie. Of course he would. 

 

[Cap'n Piranha]

2 hours ago, Woof Bronzer said:

Well, the Pohlads bought the team in 1984 for $44m.  In 2025 they had an offer for $1.5 billion.  I'll let you do the math on the average annual increase to the franchise value, and given the Twins "performance" in most of the 90s and 2010s, do your own critical thinking about the correlation between franchise value and winning.  Let me know what you learn!

And $44M invested in a DJIA index fund in 1984 is worth $1.8B today.  MLB franchises are not an outlier in asset value appreciation.  In fact, they only make sense to put money in if the owners can also extract annual profit to offset the difference.  You want to know why the Pohlads are so intent on rightsizing the business?  Because they invested in the product, the fans continued to vilify them and didn't increase their own spending, and now the Pohlads are tired of losing money on something that underperforms the most vanilla investment strategy outside of open a free savings account at Wells Fargo.

Before I get accused of being pro-Pohlad, or pro-Billionaire--I'm not.  I'm just a rational guy who understands why a group of people doesn't want to lose money, even if they are collectively worth billions.

[bunsen82]

1 hour ago, USAFChief said:

First of all, it's Cody Christie. Of course he would. 

 

Other sports writers and even writers here on Twinsdaily have stated they knew who the buyers were but were waiting for the information to be made public or approved.  If you think this is false information then fine.  If this is just a dig at Cody, seems par for the course with you.   

I sure you can't wait for me to make a post about the draft capital from the lottery from our tank like I plan to later tonight LOL.   

Edit:  It does appear something was wrong in the initial reporting,  most likely the ownership group, but for now we will just wait until it comes out.  So a mea culpa from me.  USAChief.    

[Woof Bronzer]

3 minutes ago, Cap'n Piranha said:

And $44M invested in a DJIA index fund in 1984 is worth $1.8B today.  MLB franchises are not an outlier in asset value appreciation.  In fact, they only make sense to put money in if the owners can also extract annual profit to offset the difference.  You want to know why the Pohlads are so intent on rightsizing the business?  Because they invested in the product, the fans continued to vilify them and didn't increase their own spending, and now the Pohlads are tired of losing money on something that underperforms the most vanilla investment strategy outside of open a free savings account at Wells Fargo.

Before I get accused of being pro-Pohlad, or pro-Billionaire--I'm not.  I'm just a rational guy who understands why a group of people doesn't want to lose money, even if they are collectively worth billions.

Seriously, the Pohlads don't need anyone carrying water for them.  The Pohlads are "rightsizing" the business because they are incompetent businesspeople who doubled down on a dying industry (commercial real estate) at a time when the whole world was working from home (COVID), who let Joe Pohlad ruin 2 media companies to the tune of several millions in losses, and who have no interests in life other than accumulating more and more wealth.   They are rightsizing because they are incompetent and greedy.  It's really not that complicated and again, no need to carry water for them, they're doing just fine.  

[Woof Bronzer]

2 hours ago, old nurse said:

Prove the money was used for private expenses, prove that spending $80 millions would pay for itself. You can’t do either. 

Respectfully:  what?  

[Woof Bronzer]

45 minutes ago, howeda7 said:

Over the long term, no. Over a 2 year period, gutting payroll, having league worst attendance, bad TV distribution and then a long lockout certainly could. Or at least hinder how much it goes up.

Again, I think the equity value here is they're buying in at $1.5 or $1.6 billion valuation and  the new CBA making the team worth $2 billion or more. Gutting payroll and therefore the season ticket base and fan base does the opposite, and hurts valuation in exchange for a small amount of short-term cash flow. 

I understand and agree with your logic and reason.  Private equity and billionaires like the Pohlads don't think this way.  They only care about short term profits and "shareholder value".  That is the American economy in 2025 - it's not just vulture capital and shortsighted billionaires who think this way, it's our entire financial system.  

If the Pohlads were capable of foresight they would understand by now that winning has a direct correlation to profits.  Build a winning team and fans will follow.  Their attendance numbers historically bear this out.  Invest in the team, and your investment will pay off.  But no, they always just go year to year and almost always decide to cut vs. invest.  

[old nurse]

1 hour ago, Cap'n Piranha said:

And $44M invested in a DJIA index fund in 1984 is worth $1.8B today.  MLB franchises are not an outlier in asset value appreciation.  In fact, they only make sense to put money in if the owners can also extract annual profit to offset the difference.  You want to know why the Pohlads are so intent on rightsizing the business?  Because they invested in the product, the fans continued to vilify them and didn't increase their own spending, and now the Pohlads are tired of losing money on something that underperforms the most vanilla investment strategy outside of open a free savings account at Wells Fargo.

Before I get accused of being pro-Pohlad, or pro-Billionaire--I'm not.  I'm just a rational guy who understands why a group of people doesn't want to lose money, even if they are collectively worth billions.

This is why they buy into sports franchises

https://www.propublica.org/article/eight-takeaways-from-propublicas-investigation-of-how-sports-owners-use-their-teams-to-avoid-taxes

[DJL44]

3 hours ago, old nurse said:

Prove the money was used for private expenses,

Prove it wasn't. I have no idea how they would accrue that much operating debt unless they're paying Joe Pohlad $50M a year salary.

[old nurse]

1 hour ago, Woof Bronzer said:

Respectfully:  what?  

You can’t even remember your own claims?  

[SF Twins Fan]

Another article was just posted to TD that states Varde isn't the group buying into the Twins.