2013 Forbes Numbers

[tobi0040]

The only thing I wanted to say in response to your point is that it isn't just the Twins. Public funding of sports stadiums is a nationwide issue.

 

I agree with that 100%

[James]

I've heard there's no law that forces teams to make their financial records public.

You are correct. The Twins (as with all baseball teams in the MLB) are a privately held company and therefore do not need to disclose their financial statements like a publicly held company would.

 

We go through this same conversation several times a year, with updated numbers from Forbes. These are estimates, and yes the Pohlads are making money, even when the team is bad. That's pretty much all we can say about these numbers.

 

What we really can't say about these numbers is exactly how much money the Pohlads are making.

[Oldgoat_MN]

I don't have a problem with the Pohlads making money.

 

If $30M could make this team a genuine WS contender I would be all for that.

I believe that, realistically, we need to bring along some of these young guys and get close. At that point, I would expect the team to step up and complete the roster with top Free Agents using all the resources available.

 

I do not think that the team gaining $400M in value means that the Pohlads should go out and spend that 'paper value'. That really doesn't make sense, from a business standpoint.

[Mike Sixel]

I don't agree that they should wait to be a WS contendor to spend more money. I doubt there is any way to close that disagreement, so I'm not even going to try. Just stating my feelings.

[Brock Beauchamp]

If Forbes is correct, and the earnings before interest/taxes/amortization and depreciation were $30.2 million and the fair market value of the franchise was $605 million, then the rate of return was in the range of 5%.

 

It seems to me that a rate of return of 5% is not very high compared with most private businesses. Yes, $30 million is a lot of money and might have purchased 5 or 10 more wins last year, but a 5% return seems reasonable to me. My sense is that regulated public utilities generally are allowed profits in this range.

 

Am I missing something? Is there some reason to believe that keeping enough to result in a 5% return is in itself wrong?

 

Well, it's not *wrong* per se because it's their money (and yes, I know... "taxpayer funded stadium, yadda yadda yadda"), but 5% isn't all the Pohlads are getting.

 

The biggest ROI on sports teams over the past 40 years has been value inflation of the franchise itself.

 

The Pohlads bought the team 30 years ago for $44m.

 

Forbes currently values the team at $600m.

 

There's a lot more to owning a team than yearly profits. The real money is found in selling the team, as evidenced by the team being valued at 1500% of what the Pohlads purchased it for in 1984.

[amjgt]

Anyone complaining about over moderation should go hang out at Rube Chat for a while. It's the Wild effing West over there. Good luck going 4 posts without name calling.

 

After 5 minutes over there, when you are sick of that crap, just come on back to Twins Daily with a greater appreciation of what we have here.

[amjgt]

The biggest ROI on sports teams over the past 40 years has been value inflation of the franchise itself.

 

The Pohlads bought the team 30 years ago for $44m.

 

Forbes currently values the team at $600m.

 

There's a lot more to owning a team than yearly profits. The real money is found in selling the team, as evidenced by the team being valued at 1500% of what the Pohlads purchased it for in 1984.

 

Compare it to the stock market. I'm not rich from the yearly or quarterly stock dividends from my 1000 shares of Microsoft stock I purchased in 1984. I'm rich because the stock price is 100x the value it was then.

[DaveW]

I for one am OUTRAGED from this article, 30 million in profit and you can't spend 2% of that profit to bring in DeRosa????? Pathetic.

[ashbury]

Anyone complaining about over moderation should go hang out at Rube Chat for a while. It's the Wild effing West over there. Good luck going 4 posts without name calling.

 

After 5 minutes over there, when you are sick of that crap, just come on back to Twins Daily with a greater appreciation of what we have here.

 

Because it's complimentary I am going to give in to the temptation to leave the post intact and not infract you for it. BUT, the discussion of moderation STILL belongs elsewhere.

[James]

I for one am OUTRAGED from this article, 30 million in profit and you can't spend 2% of that profit to bring in DeRosa????? Pathetic.

 

Sorry to correct you, but the $30 isn't their total profit. There are still taxes and some other things.

 

But you're right, there was probably still plenty of money for Mark DeRosa.

[old nurse]

Since it might be obvious I am not an accountant. what % will the state get if Pohlad sells the team?

DeRosa would make $600,000 as an announcer?

[jharaldson]

In the years leading up to the 2006 vote to finance the stadium the Twins operated at a break-even level. If you examine the 2008 Business of Baseball entry on the Twins they made $5 million total from 1999-2006, less than $1 million a year. After they got the vote to build the stadium they have made $175 million from 2007-2013, about $25 million a year. A lot of the anger towards the Twins is in regards to this clear change in business practice immediately after the taxpayers gave them $392 million in public subsidies.

 

2008 Forbes

http://www.forbes.com/lists/2008/33/biz_baseball08_Minnesota-Twins_330400.html

 

2013 Forbes

http://www.forbes.com/teams/minnesota-twins/

 

Target Field Wiki (For Subsidy Amount)

http://en.wikipedia.org/wiki/Target_Field

[jharaldson]

So I am going to start this post by stating that I am not an accountant and would appreciate if any accountants could verify or correct what I am going to try to do.

 

My understanding is that Rate of Return is calculated the following way:

 

Rate of Return = ( (Current Value + Operating Income) - Initial Investment ) / Initial Investment

http://en.wikipedia.org/wiki/Rate_of_return#Return

 

Change in Twins franchise value since 2007 = $389 million

Operating Income since 2007 = $175 million

http://www.forbes.com/teams/minnesota-twins/

 

Initial Investment = $168 million spent by Twins on Target Field

http://minnesota.twins.mlb.com/news/article.jsp?ymd=20080915&content_id=3479874&vkey=news_min&fext=.jsp&c_id=min

 

235% = ( (389 + 175) - 168 ) / 168

 

That is over 7 years though so if you divide that number by 7 you get an annual return of 33.5%.

 

Does this look right?

[SweetOne69]

So I am going to start this post by stating that I am not an accountant and would appreciate if any accountants could verify or correct what I am going to try to do.

 

My understanding is that Rate of Return is calculated the following way:

 

Rate of Return = ( (Current Value + Profit) - Initial Investment ) / Initial Investment

http://en.wikipedia.org/wiki/Rate_of_return#Return

 

Change in Twins franchise value since 2007 = $389 million

Profit since 2007 = $175 million

http://www.forbes.com/teams/minnesota-twins/

 

Initial Investment = $168 million spent by Twins on Target Field

http://minnesota.twins.mlb.com/news/article.jsp?ymd=20080915&content_id=3479874&vkey=news_min&fext=.jsp&c_id=min

 

235% = ( (389 + 175) - 168 ) / 168

 

That is over 7 years though so if you divide that number by 7 you get an annual return of 33.5%.

 

Does this look right?

 

Where are getting the Profit since 2007? Forbes doesn't list profit, the list operating income which is NOT profit.

[jharaldson]

Where are getting the Profit since 2007? Forbes doesn't list profit, the list operating income which is NOT profit.

 

In the wikipedia entry I looked at they used Dividend instead of profit. The Dividend does not include the tax calculation in it which makes it similar to the operating income. I will edit my post to change the name from profit to operating income though. Thanks!

[Mike Sixel]

You don't exactly divide, because of compounding.....let's put it this way, the return on the Twins has outpaced most other investments they could have made.....