Article: MLB Payroll By The Numbers

[John Bonnes]

You can view the page at http://twinsdaily.com/content.php?439-MLB-Payroll-By-The-Numbers

[Highabove]

Last year, the Twins sold more Tickets then 26 other Teams. This includes a number of major markets such as the Red Sox, Mets, Cubs, Angels, Dodgers and both World Series Teams.

Afterwards, the Fans are rewarded with a large slashing of the payroll.

 

What other Organization would do this?

 

I will wait for my answer.

[Larsbars08]

I know that the cut in payroll isn't ideal, but I can't imagine ownership was comfortable with the payroll that far north of 100 mil. I think there are enough problems on the team that going out and overpaying a free agent wouldn't be worth it. Mauer and Morneau represent a huge chunk of our current pay roll and while Mauer's contract will have to be lived with, Morneau is a free agent after 2013, which I think could coincide with some of our top prospects getting to the Majors. It's a pain in the ass, but I think the only thing the Twins need to do is be patient and hope to maybe get some more top end pitching talent.

[silverslugger]

slashing payroll that much in 2012 may well be the epitomy of pennywise and pound foolish, only time will tell. Ultimately, they could've and probably should've put a more expensive product on the field in an attempt to be competitive. The question is, will they be competitive enough this year to keep the fan base interested long enough to turn over the roster. Also, will those who help turn over the roster be more like our early 2000's roster or our mid 90's rosters? In many respects, 2012 will go a long way toward determining how "cozy" TargetField is for the rest of this decade.

[CDog]

I read the 94.1 number somewhere else, but it included the caveat that it was only counting the opening day 25-man roster which took Marquis and Baker out of the total. That difference does show up fairly large in the % decrease and would vault them over the small difference behind the White Sox.

[CDog]

Last year, the Twins sold more Tickets then 26 other Teams. This includes a number of major markets such as the Red Sox, Mets, Cubs, Angels, Dodgers and both World Series Teams.

Afterwards, the Fans are rewarded with a large slashing of the payroll.

 

What other Organization would do this?

 

I will wait for my answer.

I'd start with reading the article you're commenting on.

 

Also wonder if you've ever considered the possibility that the 2011 Twins were OVER budget and this year is simply more in line with where they "should" be? If you go over budget in a year you start out thinking you have a window to win and get "rewarded" with 99 losses, is staying over budget in a year where expectations are lower really the move?

[ashbury]

Last year, the Twins sold more Tickets then 26 other Teams. This includes a number of major markets such as the Red Sox, Mets, Cubs, Angels, Dodgers and both World Series Teams.

Afterwards, the Fans are rewarded with a large slashing of the payroll.

 

What other Organization would do this?

 

I will wait for my answer.

Counting turnstile clicks is not the same as revenue. TV/radio money in the upper midwest is a lot lower than in many of the markets that are in the majors, and average ticket price is higher elsewhere as well. The Twins aren't "small market", but their spending on salaries is right around the middle of the pack, and that's about where it belongs.

[Highabove]

I'd start with reading the article you're commenting on.

 

Also wonder if you've ever considered the possibility that the 2011 Twins were OVER budget and this year is simply more in line with where they "should" be? If you go over budget in a year you start out thinking you have a window to win and get "rewarded" with 99 losses, is staying over budget in a year where expectations are lower really the move?

Last year, the Twins had an operating income of 16.6 million dollars, not too shabby.

 

Some of the anger is the result of dishonesty exhibited by the Twins organization.

 

During Season Ticket renewal, Dave St. Peter stated that the payroll was high last year, but would not dip much. St. Peter also stated on Espn 1500,

"will end up at the end of the day being relatively comparable (to last season)."

"I think I can say that I don't think payroll is going to be the number one barrier for us doing what we need to do to improve our baseball team" This is a direct paste from the Phil Mackey Article.

Are these Statements true?

[Cap'n Piranha]

Last year, the Twins sold more Tickets then 26 other Teams. This includes a number of major markets such as the Red Sox, Mets, Cubs, Angels, Dodgers and both World Series Teams.

Afterwards, the Fans are rewarded with a large slashing of the payroll.

 

What other Organization would do this?

 

I will wait for my answer.

If what interests you the most about a team is how much money they spend, the Twins are not the team for you. There was no player(s) they could have gone out and signed for 15-20 million dollars that would put this team ahead of the Tigers in terms of projected finish, therefore, there was no reason to spend that money. The true barometer of if the Pohlads will spend comes when the Twins next have a window, which is most likely at least 2 years in the future, assuming everything goes perfectly to plan.

[roger]

John, Shouldn't you have included the two players that the Twins are paying $3.0mm each to when writing this rather than going with USA Today, who fails to include them?

 

Adding Marquis and Nishioka increases the Twins opening day payroll to what it actually is...$100,085,000. Granted, Hendriks $480,000 should be deducted as he would have been in Rochester if Marquis was with the team. I would expect (I don't have USA Today's 2011 numbers) that five and a half to six million changes the relationship between the Twins and other teams significantly and they are not fourth and fifth in terms of dollars and percentage.

[Jeff P]

I can't blame them for dropping payroll either. This team is a long ways away from being competitive with the best teams. They need another stretch like 2004-2007 where Kubel, Morneau, Mauer, Cuddyer came up (I know some of them came up earlier but this is when they started going more full time).

 

Going forward, with these huge tv deals getting signed there will be more and more teams that are not constrained by money so the only chance the Twins will have is to largely develop their own players and fill in a few gaps outside of the organization.

 

Jeff

[CDog]

I read the 94.1 number somewhere else, but it included the caveat that it was only counting the opening day 25-man roster which took Marquis and Baker out of the total. That difference does show up fairly large in the % decrease and would vault them over the small difference behind the White Sox.

I think roger is right...what I read said it was Marquis and Nishioka that were off the number in USA Today. But now I'm wondering why Baker would be included if those two were not. Anyone?

[amjgt]

There are other, more effective, ways to spend money coming off of a 99 loss season. I think the spending they did do, to get near 100mil was good... Doumit allows more flexibility for our roster (case in point, only carrying 2 catchers), Willingham is a nice, less expensive, version of Cuddy, and Marquis was needed to fill out the rotation. This wasn't the year to break the bank with a big signing. Next year, with more clarity with the M & M situations, and Morneau hainvg just one more year left, the Twins might be more willing to make a longer-term, impact signing.

 

Obviously, the 2nd pick in this year's draft will cost more than we've been typically spending on our draft picks, but it would be nice to see the Twins go over-slot with a compensatory pick or two. Also, now might be a good time to invest in some latin american signings.

 

Now is the time, with the draft, international prospects, and in-season trades, to load up the farm system for 2-3 years down the road.

[Boom Boom]

It wouldn't surprise me a bit if every single number in that USA Today article was fudged.

 

The Twins saw the fans start to leave Target Field late last year, and the decrease in payroll reflects an expectation of fewer tickets sold. If the Twins expected to have packed houses for every game in 2012, the payroll would have stayed close to where it was in 2011.

[roger]

I think roger is right...what I read said it was Marquis and Nishioka that were off the number in USA Today. But now I'm wondering why Baker would be included if those two were not. Anyone?

The USA total includes 27 players. Baker and Waldrop were both included because they were on the 25 man roster (on the disabled list). Marquis wasn't eligible for berevement leave as that ends at seven days. Thus, the Twins actually optioned him to New Britain, thus, removing him from the 25 man roster.

[Top Gun]

Highabove is right on!

[Shane Wahl]

Do we have any idea how much ownership actually makes in profit on a yearly basis and what they did last year? Until we figure that out, who knows what "ought" to be spent? I have hope that they might be willing to do something in season for somebody if they are contending in July.

 

What I found strange about the payroll cut was that the team is going to be taken over by a number of players who the Twins have control over for years and a lot will be coming off the books within two years. And it's an even bigger "a lot" if Morneau is not re-signed after 2013. Pavano, Baker, and Liriano could all be gone (though I would think one will return . . . and strangely, it may be Pavano now . . . ) and that is about $25 potentially. If some around here have their way and the only leadoff hitter above AA is traded, that will be another $12 million or whatever less over the next two years.

[Harrison Greeley III]

Unless there's something missing in my math, the Tigers appear to me to have no business having a $132 million payroll. I know Ilitch's bank accounts are probably bigger than everyone else in Detroit's bank accounts combined, so I think he's fully aware that he is running an unprofitable business in the hopes of a title. And if he puts a winner on the field, hopefully that creates more customers for his casino next door anyways.

 

Good for Tiger fans. I'm jealous.

[Mike Sixel]

Does anyone really think they will make a bigger signing next year? Why would you think that?

[scottz]

I think it is difficult as a fan to see the big picture when it comes to payroll. It certainly could appear like management is taking the money and running by having a 17% decrease in payroll, but every business has to do a comprehensive review and make a plan for going forward. It wouldn't be illogical to think that management looked at a 99-loss team and decided they needed a plan that just maybe saved a few bucks on the ML roster in 2012 so they could build for 2013 and 2014, knowing there were too many holes to fill to be competitive in 2012. Maybe the plan is to save a few bucks for 2012 AND 2013 to build for 2014 and 2015. Who knows what the plan is? They do.

 

If you don't like the squad enough that you don't want to go to games because the payroll is slashed, or they are 3-7, or whatever, don't go. I assume they have that worked into the plan, too. I expect the next time we make a DEEP run it will be in 2015. If everything works out right, maybe 2014. And the payroll might not be super high then either, as guys like Sano et al will be generally pretty low on the pay scale.

[whydidnt]

It wouldn't surprise me a bit if every single number in that USA Today article was fudged.

 

The Twins saw the fans start to leave Target Field late last year, and the decrease in payroll reflects an expectation of fewer tickets sold. If the Twins expected to have packed houses for every game in 2012, the payroll would have stayed close to where it was in 2011.

This is certainly true, but doesn't cutting the payroll mean you'll probably stay the same or get worse, and in that situation lose even more fans? Based upon this hypothesis we'll eventually see a payroll back around 60 million and only have about 10,000 fans a game. It's the late nineties all over again! Which comes first the chicken or the egg?

 

One other point, I know the Pohlads have and will always manage this like a business, but let's not forget they are one of the richest owners in all of sports. They certainly "could" spend enough to lose money without any real impact on their personal wealth or long term goals. Heck I'd be happy if they just put all of their revenue back into the organization, but they don't even do that. When you consider the ROI they already have banked from the teams increase in value, they are simply taking advantage of a willing fan base.

[scottz]

Does anyone really think they will make a bigger signing next year? Why would you think that?

I could see them signing a free agent pitcher this offseason, depending on who all is available and what the market is like. I don't think they'll sign any bats. This past offseason was the stopgap year for position players (Willingham, Carroll, Doumit).

[whydidnt]

One other thing, I know a lot of you feel it's a "business" and they need to run it like a business. Let's not forget that many, many big businesses do NOT pay dividends to their owners each year. Despite Apple's huge incomes, it's only this year that they are paying the owners. Lots of owners have made lots of money on Apple stock by buying and selling it without every taking any income out of the organization. Sports franchises are unique in that they receive anti-trust exemptions, subsidized stadiums, etc. They almost always greatly appreciate in value regardless of what the owner does, or the economy...see the LA Dodgers as an example. There is no reasonable "business" reason for them to budget to make money, they are making a great ROI just on the teams increased value.

[scottz]

There is no reasonable "business" reason for them to budget to make money, they are making a great ROI just on the teams increased value.

That long term ROI doesn't pay the daily bills, the salaries, etc. The short term ROI is what does that, and it certainly is reasonable to budget for a profit in order to do so. Although I'm sure we'd have to agree on what "reasonable" means for this aspect of the conversation to go anywhere. Who gets to decide what reasonable means?

[whydidnt]

That long term ROI doesn't pay the daily bills, the salaries, etc. The short term ROI is what does that, and it certainly is reasonable to budget for a profit in order to do so. Although I'm sure we'd have to agree on what "reasonable" means for this aspect of the conversation to go anywhere. Who gets to decide what reasonable means?

I disagree, the profit is what they take out of the organization AFTER paying the bills. That's the definition of profit. They don't "need" to budget to make money to pay the owners as the owner will get paid when they sell the organization. Like I said if you think MLB franchises should be run like a regular business, then I think we need to take away their anti-trust exemption and tax-payer funded stadiums. The Pohlads are rich enough to lose 25 million a year for Ten years and they would still be Billionaires (yes with a , and if they sold the team they would get that $250 million back in a heart beat.

[Guest USAFChief]

All the apologists here will tell us last year the Twins suffered 99 losses due to injuries, and injuries only. Those same apologists will then turn around and tell us cutting payroll is justified because the Twins can't hope to compete in 2012, and probably not for several years. You can't have it both ways.

 

There is NO logical reason to claim both.

 

And there is NO logical reason that cutting payroll helps this team now or somewhere down the road.

[scottz]

I disagree, the profit is what they take out of the organization AFTER paying the bills. That's the definition of profit. They don't "need" to budget to make money to pay the owners as the owner will get paid when they sell the organization. Like I said if you think MLB franchises should be run like a regular business, then I think we need to take away their anti-trust exemption and tax-payer funded stadiums. The Pohlads are rich enough to lose 25 million a year for Ten years and they would still be Billionaires (yes with a , and if they sold the team they would get that $250 million back in a heart beat.

It isn't like the end of the year comes, they balance the books and say "we made $20 million dollars! Here's yours, here's yours, here's mine. Now, let's start at zero again." Any business plays by the rules allowed to it and tries to come out ahead (and rules are different for different businesses - i.e., exemptions and public subsidies in baseball but not for shoe store companies). They need cash on hand to pay people and they need cash in the bank for future plans. If they can sign player A (Willingham) for less than player B (Cuddyer) and get similar production, they'll do it. If that means the payroll gets lower, that improves the business because then they can put more money into signing draft picks or increasing a scouting budget or whatever other things they decide on. It's not a regular business, but it absolutely is business.

[James Richter]

The new CBA and the Twins' multitude of top-75 picks basically locks them into spending 8 figures on the draft this summer. If you combine that spending with the $100M-ish figure (which accurately includes the money going to Nishi and Marquis) and compare it to 2011's total spending on the MLB payroll and the draft, the cut for this year looks a lot more modest. If they manage the middle-of-the-pack finish this year that a lot of us are expecting, their 2013 draft spending will be considerably less. Just maintaining the total MLB/draft spending for 2013 at the same level as 2011-2012 should see the payroll climb to around $110M.

 

Assuming they're prudent enough to decline their options on Baker and Capps, that would give them $35M+ to spend on free agents. They'll need 3 starters and a couple of relievers, but the projected crop at those positions looks very favorable. I doubt they'll bid on Cole Hamels, but a couple of solid 2nd-tier options (Brandon McCarthy, Shaun Marcum, Colby Lewis, etc.) should be well within their means.

[Cap'n Piranha]

This is certainly true, but doesn't cutting the payroll mean you'll probably stay the same or get worse, and in that situation lose even more fans? Based upon this hypothesis we'll eventually see a payroll back around 60 million and only have about 10,000 fans a game. It's the late nineties all over again! Which comes first the chicken or the egg?

 

One other point, I know the Pohlads have and will always manage this like a business, but let's not forget they are one of the richest owners in all of sports. They certainly "could" spend enough to lose money without any real impact on their personal wealth or long term goals. Heck I'd be happy if they just put all of their revenue back into the organization, but they don't even do that. When you consider the ROI they already have banked from the teams increase in value, they are simply taking advantage of a willing fan base.

This of course assumes that no players improve, all the players in the minor league system fail to become competent big-leaguers, and the Twins draft absolutely no one of consequence. Just one of the three happening is a long shot, but all three at the same time? Virtually impossible.

 

As for your sans-cullotes-esque salvo about owners taking advantage of a willing fan base, welcome to professional sports in the 21st century, you must be new here.

[scottz]

All the apologists here will tell us last year the Twins suffered 99 losses due to injuries, and injuries only. Those same apologists will then turn around and tell us cutting payroll is justified because the Twins can't hope to compete in 2012, and probably not for several years. You can't have it both ways.

 

There is NO logical reason to claim both.

 

And there is NO logical reason that cutting payroll helps this team now or somewhere down the road.

I don't think the only reason the Twins lost 99 games last year was due to injuries, though it certainly factored in. I think the 2011 Twins limiting factors were (in no particular order):

1) injuries

2) the bad scouting/signing of Nishioka

3) career dips for a number of healthy players (pretty much everyone but Cuddyer)

4) glaringly thin reserves pool, made apparent by #1

5) substandard starting pitching

 

So this year:

1) a) they made some orgizational changes in the medical department, hope they stay healthy

2) cut their ML losses on Nishioka, signed Carroll as a stopgap, and plan on Dozier being here this year or next

3) made the decision to cut loose Cuddyer, Kubel, Young (sell-low trade), and Nathan. stopgaps in Willingham, Plouffe, and now Clete Thomas in the OF.

4) this takes time to remedy.

5) this takes time to remedy (4 of the 5 starters from last year are starters this year).

 

because of 3, payroll goes down. because of 4 and 5, it will stay down next year, likely, while they build for the future. 2014 or 2015 has to be the plan, and to be the best they can be then, it doesn't make any sense to overspend now. who were we going to sign? Buerhle? would that have helped? it's not being an apologist to think they are thinking longer term as a business decision.