How Excited Should Fans Be About Pohlad Family Plans to Sell Minnesota Twins?

I liked the stability of having the Pohlad's running the show. This last off season and season will probably make most feel like "good riddance". I'm not so certain it is a good thing. Buck, Correa and Lopez contracts are all due to the Pohlad's. Will the next owner pay for stars? Will the next owners prioritize profits? So, I'm probably 50/50 on the outcome.

Unless some billionaire wants something, their buddies doesn't have. Then I would be thrilled.

Right-size the business? We should have seen the writing on the wall.

True, there are no guarantees news owners will spend more.

The only guarantee we have is that the Pohlad's are never going to spend any more than they have to on this team. 

I hope they find their buyer.

Didn't think I'd live to see even the possibility of this happening...and I still might not, but I LOVE the idea of different ownership. Sure, we could get someone/some group the same or worse, but we could get someone much better and who actually cares about winning, as well as the profits. Put a better product on the field and that will put fans in the seats. Change can be very good!

It all depends on what the goal is for the new own owners/group?  It's pretty clear that the real value or return on the investment in owning a team is when the team is sold.  Witness how much the Pohlads are going to make.  However, there are other reasons for owning a team other than making money. Ego? Glory? etc. 

Come on Mark Cuban - how about a house up north?

Anyone have a number for Zygi?

A quick google search shows there are only 4 resident billionaires in MN.  Of those 4, only one has a net worth greater than the (assumed) $1.5B price tag--Glen Taylor.  As such, we should all prepare for the very real possibility that the next owner will not be from MN.  As such, while a relocation will be tricky, it is not a complete impossibility.  It should also be noted that a new owner, unless they have Steve Cohen levels of wealth (and only 45 entities in the US do), will need to recoup profit starting day 1 to make up for the 10 figure drain from their assets.  Should this sale go through, it seems fairly likely the impact on spending levels will be minimal, absent incremental and sizable revenue.

1 hour ago, bean5302 said:

Acquiring the Twins will probably cost in the neighborhood of $1.5B. They typically run an operating income (profit) of about $10-20MM, which is a terrible investment, and a big chunk of revenue is about to disappear. The overall profitability of the Twins, even when considering market value, is under the S&P 500 Index fund so owning the Twins hasn't been a great investment for the Pohlad family for the last 30 years or so.

In fact, most baseball teams aren't great investments. In order to provide a the return which would outperform the general stock market, you have to grow the market value, which is honestly accomplished through attendance (fan experience) or national exposure (winning World Series' or employing big name players).

So there has to be another motivation behind the acquisitions.

I did some simple math: 44 million, corrected for inflation (assuming 3% a year, some years it was more, but many years was less, so that would not be that off) would be approximately 143 million in today's dollars. If they sell in $1.5 B that sounds not too bad as an investment, does it?

13 minutes ago, adjacent said:

I did some simple math: 44 million, corrected for inflation (assuming 3% a year, some years it was more, but many years was less, so that would not be that off) would be approximately 143 million in today's dollars. If they sell in $1.5 B that sounds not too bad as an investment, does it?

Until you realize that $44M put in a DJIA index fund in 1984 is worth $1.6B today.  I'm also skeptical they get $1.5B, when an Orioles team with more history and a more attractive location "only" got $1.765.  Even the Mets were sold for $2.4B--do we really think a team in the largest media market, by far, in the country is not worth even 2x the Twins?

Knowing how important the almighty dollars is to this ownership group, as excited as we are today that they are open to selling, I would not be shocked if they take it off the market if they're not getting the price they feel they deserve.  That could mean really time to lower payroll?

1 hour ago, bean5302 said:

Acquiring the Twins will probably cost in the neighborhood of $1.5B. They typically run an operating income (profit) of about $10-20MM, which is a terrible investment, and a big chunk of revenue is about to disappear. The overall profitability of the Twins, even when considering market value, is under the S&P 500 Index fund so owning the Twins hasn't been a great investment for the Pohlad family for the last 30 years or so.

In fact, most baseball teams aren't great investments. In order to provide a the return which would outperform the general stock market, you have to grow the market value, which is honestly accomplished through attendance (fan experience) or national exposure (winning World Series' or employing big name players).

So there has to be another motivation behind the acquisitions.

Despite the twins TV contract issues, not hitting their attendance targets, missing the playoffs, etc the team increased in value by $73M in a year according to Forbes. That's in a BAD year where the economics of baseball outside the largest markets has gotten wobblier. (And I expect that because of ownership's maneuvers they probably still made their annual profit, not that anyone will ever know for sure; hell will freeze over before a Pohlad or any other non-Atlanta ownership will open their books! But YMMV)

Pro sports might not be a great year over year profit center in every market, but it is an incredible place to park large sums of cash. That $44M investment the Pohlads made 40 years ago would be worth $255M at an annual rate of 12% (historically, achievable in the stock market over time). That's actually a fine return that most of us would be happy with for our 401(k). If the Pohlad's get $1.5B, then they're talking about what, 84% interest per annum?

Who cares about having a few years with an operating loss if the value is increasing at that kind of rate? (No, it wasn't linear, and yes you have to actually sell at some point to realize it...but it's still there)

This is why hedge funds are interested in becoming stakeholders in franchises. Historically, it's a spectacular place to hold money.

One dont get to excited cause I am not excited and two it's 50/50 look at angels owner try for two years to sell the team and nothing until we see headlines saying polhads officially sold the team I will jump for joy but overall they are still owners they can still pull a glen taylor and not sell the team.

One thing I liked about the Pohlad ownership is the stability.  Yes we know they once offered the team up for contraction but they quickly pulled that back.  I agree that fans shouldn't expect a sudden influx of payroll dollars with new owners.  But perhaps an owner with some enthusiasm and baseball knowledge could hire better people to run the team.  And develop a new philosophy about players and player development.  A complete audit of all the organization should weed out areas where too many employees like the analytics department.  Anyway who knows what may or may not happen.

Potential payroll flexibility is only a small part of the excitement over new ownership.  The stubbornness and inflexibility of ownership has been one of the larger issues over the last few decades.  Change is part of that excitement.  What will the new owners do differently in hopes to win a championship and provide a positive experience for fans?

Some changes seem like low hanging fruit (better marketing, better in-person experience), but others will take time.  Approaches to the FO and on-field product, team infrastructure, scouting, analytics all could see changes.

Good or bad, change is almost always painful.