An Updated Look At Twins Payroll

OK.  If [we] use the $118MM number, it's easy to see why a premium-priced relief pitcher wasn't signed to a contract.  I conclude that the Twins viewed any debate between adding a hitter (Park) or a premium-priced relief pitcher (Bastardo) was an either/or but not both, decision.

I don't think it's reasonable to charge Park's entire posting fee to this year. I think it should be prorated over four years.

The entire commitment was 24.85 million over four years. To me, for budgeting purposes, that looks like 6.21 per year. 

Counting the entire posting fee this year makes his cost look like 15.85 million this year and 3 each of the following four years.

I would instead consider his cost each year to be 6.21, and this this year's payroll (so far) to be about 110.

I don't think it's reasonable to charge Park's entire posting fee to this year. I think it should be prorated over four years.

 

The entire commitment was 24.85 million over four years. To me, for budgeting purposes, that looks like 6.21 per year. 

 

Counting the entire posting fee this year makes his cost look like 15.85 million this year and 3 each of the following four years.

 

I would instead consider his cost each year to be 6.21, and this this year's payroll (so far) to be about 110.

I was about to say the same thing.  I believe that $13M should be prorated.  So this years payroll is probably closer to $110.0. 

I would possibly even go as far as saying the posting fee shouldn't be included at all.  Park doesn't get paid that, it's already been paid (I believe) and is a now a sunk cost.  So as of today the Twins are obligated to pay $105.35M assuming the roster is stable from this point on.

But that's not actually how the payment is dispensed. The entirety of the posting fee is payed up front.

 

I hope this is the thinking. That would mean that next year they will have 12.85 that has come off the books and the payroll number for 2017 start at 118 million rather than 110 million.

I was about to say the same thing.  I believe that $13M should be prorated.  So this years payroll is probably closer to $110.0. 

 

I would possibly even go as far as saying the posting fee shouldn't be included at all.  Park doesn't get paid that, it's already been paid (I believe) and is a now a sunk cost.  So as of today the Twins are obligated to pay $105.35M assuming the roster is stable from this point on.

That's not how it works.  In the business world, and baseball is a business, since the posting fee was paid this year, it will be counted against this year.  It shouldn't be prorated or amortized.

But that's not actually how the payment is dispensed. The entirety of the posting fee is payed up front.  

But for accounting purposes, the Twins are spreading it out over the life of the contract.

Just a general observation, but I find it interesting that people want the Twins to spend more money, yet when a player gets a big contract, they complain it's too much money.  

I'm not pro or con Twins spending money...I'm pro Twins getting good players.

If you put a down payment on a house, you don't spread that out in your budget for the life of your payment. The payment was made up front and should be reflected in the payroll as such.

How does correct my statement?  You do as you like, the Twins will do as they like, and what they do for their situation is the only one that really counts.

From Berardino: "In the Twins’ own accounting, the posting fee is spread out over four seasons, which pushes their projected 2016 payroll to roughly $108.7 million, including projections for six arbitration-eligible players. That’s slightly beyond their 2015 Opening Day payroll of $108.3 million."

http://blogs.twincities.com/twins/2015/12/10/twinsights-breaking-byung-ho-parks-contract-details/

That's not how it works.  In the business world, and baseball is a business, since the posting fee was paid this year, it will be counted against this year.  It shouldn't be prorated or amortized.

The cash expense would hit this year, from an accounting perspective though it could be spread over the life of the contract, depending on how the Twins want to have it look on their books.  Depending on how they do things they could possibly consider it a capital expense and depreciate the whole thing over the next 4 years.

$108 mill last year put the Twins 11th out of 15 AL teams in payroll, with the newest stadium.

They may drop to 12th this year if they stay around $108.

$108 mill last year put the Twins 11th out of 15 AL teams in payroll, with the newest stadium.

They may drop to 12th this year if they stay around $108.

Good point.  How much the Twins spend relative to other teams is really the comparison we should all be concerned about.  Right now, it seems like the Twins are supporting a payroll of a team with no ambition for the playoffs, despite last year's team and a window of opportunity for a team with a lot of underpaid young talent.

Payroll numbers are good to see, but they do not really mean that much.   As a matter of fact, I'd rather see them have Burdi and/or Chargois than Fien in their pen for considerable savings and for better results.  And I'd rather see them have Melotakis or Rogers than Bastardo for considerable savings and for better results.

 

On the other hand, I'd love it had they added someone like Chapman or Heyward or Price.

 

you can have an $100 million payroll with 25 players at $4 million each or with 3 superstar players at $20 million each, supplemented with 3-4 good veterans at 10 million each and cheap good young players.   The second way is way more effective in my book than targeting mediocrity just to say that you spent $.

Yeah.....this is what I wanted to say, and now I didn't have to spend 10 minutes writing it! It's a bit disappointing to see spending stay stagnant, but at this point, I don't see a lot of upside in spending more money. They definitely could have afforded to go after the guys mentioned above and it would have improved the team...but those ships have sailed.