Dear Pohlads: Don't Do This

12 hours ago, arby58 said:

The X post indicates that the Twins are 16th in baseball in terms of percentage of revenue devoted to payroll - and just a fraction from 15th. That suggests 'mid-market' to me, and the various statistical gyrations to suggest they aren't meeting payroll expectations aren't all that impressive. Media market size, for example doesn't really matter other than what you can get in payment from media for broadcasting the team, and we've seen that $ eroding, not growing.

As that graph suggests, payroll doesn't necessarily translate into great results - witness the two teams at the top of the payroll as a percentage of revenue. Last year, the top three teams in terms of payroll all missed the play-offs. There are lots of other areas of investment that are also important, including the farm system. The Twins have pretty consistently ranked in the upper half (or better) for farm systems. They are turning out some pretty good young talent, and it appears more is on the way. 

Sure, a 'big splash' would be great (wait, wasn't that Correa?), but making the play-offs on a pretty consistent basis is a decent product, which is what the mid-market Twins have done of late.

You're looking at the wrong variable.  Either that or you must think the Yankees really, really are cheap.

This is such a bad and short-sighted series of moves by the Twins.  But I'll also say that looking at 2023 revenue for 2024 payroll likely isn't the way to go about it.  So, you're wrong, and the tweet is misleading.

Obviously, there's a certain % of projected current year revenue that's intended to go to current year salaries.  The Twins have probably been out over their skis for some time now, and with the unknown of TV dollars, they're drawing a new line in the cement.  According to their model, they have to do this.

They likely figure they can resume at a new salary level when TV revenue is secured for the future.  And that's it.  It's a business, and it's certainly a business to minority owners.  Part of getting owners to come on is guaranteeing them certain returns, and if that's in the contract, that's in the contract...in whatever form.  Assuming they have minority owners, which I can't seem to find.  I do understand plenty of Pohlads have stakes, so nephew Zeke has an agreement.

Anyway, the money model is what it is, the budget is discussed and approved, and I doubt any Pohlad has the pocketchange/insanity to say, "hey, I'll give $30 million of my own money to make this or that happen, you get dinner at Manny's."  The infrastructure of how money is handled can be changed, but I highly doubt Joe Pohlad can just change it on the fly.

17 hours ago, ChermesZ said:

At what point can we reclaim the stadium we built for them?

 

Seriously, their choices reek of a team self sabotaging itself so they can move for a ‘newer’ stadium.

There won't be a replacement for Target Field for at least 30 years. If the Pohlads don't know that, they're morons. The Pohalds really should sell. The franchise is probably at its peak value. Cash in Jim. 

A division leading club last year with a decent chance  of owing well in the playoff with a very good starting staff did not draw fans to the ballpark

Television rights.. diamond lost money on the Twins, xfinity does want to pay diamond the money  to make a profit. 

So if the Twins spend more fans will magically appear and ratings will go through the roof  

The "Pohlads are cheap" crowd really needs to have lived thru the era prior to them buying this team.

2 hours ago, dxpavelka said:

The "Pohlads are cheap" crowd really needs to have lived thru the era prior to them buying this team.

We have article after article on TD about them being cheap.  Has there ever been even one article that actually compared the Twins percentage of revenue spent on payroll to the other 29 teams?  Cheap is a relative term, right.  Isn't anyone here interested in how they have actually compared over a decade or two?  The amount of criticism by TD writers without any objective measure suggests an unwillingness to present what has actually happened.   Why wouldn't just one writer here put a little effort into illustrating what has actually happened given the amount of play this topic gets here?

13 hours ago, USAFChief said:

I read somewhere that 73 percent of the percentages you read on the internet are made up on the spot.

Pretty much if you get to the playoffs you have a 5% chance.   So as much as yes you want to play silly games,  I would like multiple chances at winning it all,  than 1 slightly better chance in 1 year.   

55 minutes ago, Major League Ready said:

Has there ever been even one article that actually compared the Twins percentage of revenue spent on payroll to the other 29 teams?

Using percentage of revenue takes ownership off the hook for negotiating the worst TV deal in all professional sports and all the other decisions that have minimized their revenue in a good market for sports. 

6 minutes ago, CCHOF5yearstoolate said:

The Bob Nutting or John Fisher defense doesn't mean the Pohlads aren't cheap.

Comparison to a league of greedy billionaires isn't objective, either. 

I don't think you understand the core concept.  If they are all equally cheap the twins would not be at a disadvantage, would they?  The suggestion of most of these articles is that an unwillingness to spend prohibits the twins from signing players and creates a disadvantage for the team.  If all of the other teams are as cheap as the twins, what's the complaint?  That's not what people are saying.  They are saying that the Twins don't sign the players that other teams do sign because they are cheap.  If the Pirates are cheap or not is absolutely irrelevant.  Would you prefer to make these arguments from an informed position?   I would love to know how the twins compare to all the other teams.   

3 minutes ago, DJL44 said:

Using percentage of revenue takes ownership off the hook for negotiating the worst TV deal in all professional sports and all the other decisions that have minimized their revenue in a good market for sports. 

Two completely different issues.  I agree that their messaging has been really poor.  However, these articles and posters here don't suggest the Twins need to get better at marketing so that they can spend more.  They say the Twins don't spend more because they are unwilling to spend.  The vast majority of complaints here about spending don't complain the Twins need to market better so they can spend more.  They complain the Twins are cheap.

Let's say you and your brother work in sales for the same company.  You are the much better salesman and make $200K to his $100K.  You both spend $100K.  Is your brother cheap because he didn't make as much money as you.  Point being, I doubt anyone argues the TV deal and messaging did not hurt revenue.  That has nothing to do with if they are cheap or not.

30 minutes ago, Riverbrian said:

I assume every team has budget considerations. 

The Twins have ranked between 15th and 19th in team payroll for the past 5 years. I assume that we are going to be in that range going forward as well. 

Based on those two things... I stopped worrying about how much we spend along time ago and I worry more about who we spend it on. 

I don't want 4 million here and 4 million there being spent on innings eating pitchers or short side platoon players.

I will judge this front office on development. Because that's how we survive. 

 

 

   

With a little luck, we won't have to worry about them signing any 4-5 type SPs for the next few years. That would really help because those guys are getting $12M+.

22 hours ago, Nashvilletwin said:

Yes, it is very possible that the Minnesota Twins - inclusive of all revenues and expenses of every entity under that umbrella - are losing money on a cash basis. Who knows what the financial structure of the Twins or the other Pohlad entities is - i.e. what is collateralised, how much debt there is, etc.

My only point, which you basically ignored, was: IF, in fact, the Twins are actually losing (substantial) cash on an annual basis, would that possibly give you a better understanding of the decisions they are making?
 

Cash is cash - if you don’t have enough to fund operations, you have to find it somewhere. You can borrow, you can sell ancillary business, you can sell equity, you can improve operations, OR you can cut costs.

All I’m suggesting is that if we assume the Pohlads aren’t stupid (which they are not), then why are they taking the actions they are taking?  It’s not greed - as much as many on this sight might suggest.  Maybe, it’s actually a response to how the business is actually performing.  

I think people forget that SD had to take out a loan of cash on hand to pay their players.  The worth of an owner does not mean they have the cash on hand.  Much of the worth is based on what people claim a company is worth.  For example, Elon Musk just lost like 16 billion in worth the other day, because the stock price of Tesla dropped.  First, he did not lose 16 billion cash, the stock he owns value dropped.  

Just because someone has something they say is worth x, does not mean they can get that in cash for it.  First, it takes a buyer to pay the asking price.  This happens a ton in business deals where a company that has no actual assets get valued at a number, and some wonder how.  Many times it is based on possible value you can get out of it but not actual assets or cash in or out. 

If the Twins operating cash is dropping, they will need to cut payroll to pay employees, or they will need sell off other assets, or borrow against them to make payroll.  Just because the Pohalds are valued at billions, does not mean they have a money bin full of cash, but that is what Forbes says their assets are worth.  If they even tried to fully divest their assets to get cash, they would not get that much cash either. 

19 hours ago, Mike Sixel said:

The Atlanta team uses the team/stadium area to build a massive redevelopment around it, and they are making plenty of money on that part of the business, while making it look like they are losing money on the team.....not every situation is the same.

I'll say it again, your company doesn't go from 44 million to 1.5 billion in value if you are losing money every year.....or at all overall. 

The reports the Braves file include the area around the ballpark.  They break it down from baseball revenue, and non-baseball revenue. You ask about the valuation of a team going up despite possibly losing money.  Well, we have seen many social media companies value increase in the market, but report that they are losing large amounts of cash each year, explain that.