Why the Twins Should Reconsider Cost Cutting

12 hours ago, Whitey333 said:

This tv situation has been known as a possibility for the past year or two.  Shows poor planning to me.  When cable companies and many streaming services started dropping Bally Sports many of us have been unable to watch the games in our homes.  They said almost three years ago they would fix that.  They never did.  I don't have much faith in the ownership as they appear to be more concerned about their bottom line than the product they maintain on the field.  So if payroll is down to say 130 million.  That means that two players, Correa and Buxton who make a combined 50 million per year will be eating up around 40% of payroll.  Another great example of poor planning.  It's hard to have confidence with this ownership.

What's the point of this post? Are you complaining that ownership isn't spending enough or that they're spending too much or they change their budget when the income changes? There's no industry-wide solution to the end of the RSN model and yet the games must be paid for, played and broadcast, so the organization is carrying on until a broader, multi-billion dollar fix can be assembled. One team with below-average revenue can't fix what's affecting almost half the league.

Anyway you're doing this backward.  The end of the TV deal has been coming for years, but instead of cutting back early the Pohlads took a shot at signing a top talent at a discount. They assumed risk in signing Correa, and they did it above budget at a time when the RSN money was in peril. Yet in this thread people are complaining about them not spending money or investing in the club.  They aren't ever going to make some folks happy so I think they just keep on with what they say in public: evaluate next year's income, make a budget and work hard. With the passing of leadership from Jim to Joe Pohlad the signs are that the budget may be going up, so take things at face value instead of all this trust and confidence nonsense.

32 minutes ago, DJL44 said:

I'm certainly up for spending less of my own money on the Twins and more on local charities. I would encourage others to divert their sports entertainment dollars to other more worthy pursuits.

The irony is that it is quite common for people to write about their unwillingness to pay for TV coverage while as a group we insist they spend more.  Not exactly a consistent point of view.

10 minutes ago, chpettit19 said:

Atlanta Braves Holdings, Inc is a public company that owns the Braves and The Battery (the area around their stadium). Because of this we can see what their financials are. The MLB CBA includes a "Market Score" ranking of all 30 teams. The Braves are a 97 and rank 14th compared to the Twins at 17th and a 79 (like OPS+ it compare to the league as a whole). The Braves payroll for 2023 was about 203 million compared to the Twins at 156ish. According to MLB's own numbers on what teams should be able to make in their markets the Twins were 10 mil below the number they should be able to hit for payroll based on the Braves publicly released information.

I'm not asking the Pohlads to dig into their personal fortune to keep the Twins competitive, I'm asking them to run their business to the mark the CBA they signed says they should be able to. The Braves brought in $271,824,000 in revenue in Q3 2023. $15,558,000 of that was from The Battery. So their total baseball revenue was $256,266,000 for Q3 which included 37 home games. The Twins should be 18% lower ($46,127,880) than that so they should be at $210,138,120 in baseball revenue for Q3. They claim they spend 50-52% of baseball revenue on payroll. So Q3 alone should put them at $105,069,060 in payroll (50%). Q3 covers July, August, and September. So March, April, May, June, and October games aren't even included.

The Twins very clearly aren't hitting those numbers. And it's all rough math lacking a lot of context. But the Braves are the team that we can actually see the real numbers on. Are they significantly out producing their market score, or are the Twins underperforming theirs? One team has spent and built a team that looks like a juggernaut for the foreseeable future and watched their YoY baseball revenue increase by 11%. The other is slashing payroll. I'm sure one, or two, or three, of the much more educated business folks on these threads will slice these numbers up and tell me my expectations aren't realistic. But from the actual numbers we have we know that Atlanta is expected to be a basically average (3% below) market for producing baseball revenue while the Twins are supposed to be solidly below (21%) average market for producing baseball revenue. We know the Braves actual revenue. We know the Twins payrolls don't match the marks they're supposed to compared to the Braves. We know the Braves are publicly speaking about adding payroll while the Twins publicly speak about cutting it. I think it's pretty fair that we ask the Twins to step it up and improve their numbers.

It sounds like you want them to spend based on a projection of what this market should be able to produce as opposed to actual revenue.  Go ahead and be mad they are not generating more revenue but it makes absolutely no sense to be mad they are not spending money that they are not actually generating.  If your wife said hey ...  I read a study that says we have the capacity to make 50% more than we are making so I am going to spend 50% more, would say geez hon that seems like perfectly reasonable?  

You have been hammering this point about market rankings.  While it is worthy of exploring if this market really has that kind of potential, it makes zero sense to insist they spend based on potential.  Like I said, be mad they are not generating more money but expecting them to spend money they are not making is sure to end in disappointment.

3 hours ago, Parfigliano said:

Pity Steve Cohen didnt buy the Twins.

The Mets are a gamble.for Cohen. If he can make the Mets as relevant as the Yankees there is a lot of money to be made in the New York market. Not so much with the Twins Cohen tried with the big splash. He made one. Unfortunately for him it was a bellyflop. It looks like the people inside convinced him that they nee the prospects first, then the splash. Ed Visteurs wrote a book called no shortcuts to the top. It was about getting to the top of the mountain. Ed was right.

A couple of points after reading the above comments...

1. We don't have a YES-like entity because we don't have 11MM+ ppl in our viewing area like NY does.  Advertisers will never pay what they do for YES ads.

2. Possibly Twins management is looking at macro economic numbers suggesting that attendance during the regular season will NOT go up due to the huge amount of debt held by consumers and the lack of discretionary $ available.  My take was the playoff attendance was the product of fans willing to spend on a short-term event and given the wonderful environment it was probably $ well-spend.  That said, it is possible that even with lower ticket prices for the regular season, the Twins will not attract anywhere near sellout crowds during the season thereby causing the Twins payroll concerns.

I think it is imperative that whatever TV deal the team finds expands viewership to all in the viewing area.  This may mean going to public TV at lesser income for the team, but it may improve interest and as a result improve viewership/attendance numbers overall.

3 hours ago, Major League Ready said:

This makes perfect sense.  However, the general gist of what people are asking for is that they ignore any common sense or business intelligence.  Basically, we want them to place no value on money because they have a lot of it.  

My wish is not that they ignore any financial prudence but that they find avenues to generate more money by expanding the availability of TV coverage because I find now wisdom in hoping / insisting a business continue to spend while revenues go down.  I am hoping they are willing to spend as much as they are reasonably able.

One of the Pohlads was involve with media. They took the easy way out by signing with a network. They may well have to do it themselves.

24 minutes ago, Major League Ready said:

It sounds like you want them to spend based on a projection of what this market should be able to produce as opposed to actual revenue.  Go ahead and be mad they are not generating more revenue but it makes absolutely no sense to be mad they are not spending money that they are not actually generating.  If your wife said hey ...  I read a study that says we have the capacity to make 50% more than we are making so I am going to spend 50% more, would say geez hon that seems like perfectly reasonable?  

You have been hammering this point about market rankings.  While it is worthy of exploring if this market really has that kind of potential, it makes zero sense to insist they spend based on potential.  Like I said, be mad they are not generating more money but expecting them to spend money they are not making is sure to end in disappointment.

You are assuming they aren't actually generating that expected revenue based on market size. Why do you assume the Twins are mismanaging their financial position? Are the Pohlads bad at making money? The base assumption is that they are generating that kind of revenue and I'll continue to make that assumption until it is proven otherwise.

9 minutes ago, chpettit19 said:

I want them to spend what this market is worthy of spending. And I have no expectation that they do that without actually making what this market should be making. If they're not making more then that's what I'm mad at. The "exploring" has been done. The Twins signed a CBA agreement based on the "exploring" MLB did on what this market should be generating. The Twins failing to meet the expectations is on them. And you're just assuming they aren't making that money.

You throw around your own projections for what they're actually making on these threads all the time in order to justify them not spending. You don't have any actual knowledge of what the Twins make, but you're more than happy to tell us we shouldn't expect them to spend more. You're doing nothing but assuming they're spending what they "should" based on what they're bringing in. But you don't have any idea what they're really bringing in. You're doing the same thing as me, only I have actual numbers for the Braves, and all the research MLB did (far more than what anyone on here has done) that the Twins agreed was an acceptable number when they signed the CBA. 

Finally building a product worth being excited about, getting your stadium filled for some playoff W's and then immediately announcing you're cutting payroll is at least partly why they don't make more money (assuming they're not making more money). That's a terrible business strategy. 

In theory they should make  more money. The reality from sales tax receipts is that the fan base. Does not spend money at the park. That has been a consistent pattern of the fan base. 

14 hours ago, Brandon said:

  They can’t catch a break from the fans.  

Those poor Pohlads!  Why can't they ever catch a break?

4 hours ago, old nurse said:

“Investing” did not help the Yankees, Padres, Mets nor Boston.  There is no “investment” that pays off consistently.

Conversely, lack of investment is absolutely proven not to work.  Since the Twins' last Series only 1 team with a payroll rank at or below the Twins level (16-20 ish) won the World Series.  

Spending a bunch of cash is no guarantee of success.  Not spending cash, however, is pretty much guaranteed to not win you a Series.  

10 minutes ago, DJL44 said:

You are assuming they aren't actually generating that expected revenue based on market size. Why do you assume the Twins are mismanaging their financial position? Are the Pohlads bad at making money? The base assumption is that they are generating that kind of revenue and I'll continue to make that assumption until it is proven otherwise.

You are assuming that this prediction model is correct and outside entities like Forbes / Statista and others report are wrong.  Statista and others like them are subscription services people / companies pay for to get accurate data.  Should we assume they are incompetent?  Should we assume the Twins TV deals have always been among the lowest in the league because they are just that inept and negotiating a contract?  

1 minute ago, Major League Ready said:

You are assuming that this prediction model is correct and outside entities like Forbes / Statista and others report are wrong.  Statista and others like them are subscription services people / companies pay for to get accurate data.  Should we assume they are incompetent?  Should we assume the Twins TV deals have always been among the lowest in the league because they are just that inept and negotiating a contract?  

I guess we should. If there is outside confirmation by Forbes and Statista that the Twins are not producing revenue as expected by their market size then it leads to the conclusion that the Pohlads are bad at making money. That isn't unusual that the second generation doesn't perform as well as the generation that created the wealth in the first place.

I don't know why fans (who are getting taxed to subsidize the team) should be punished because the Pohlads are bad businessmen. Announcing the payroll cuts at the beginning of the offseason before any tickets are sold is further evidence they're not very good at this. I guess we're all hosed until the Pohlads sell.

40 minutes ago, old nurse said:

One of the Pohlads was involve with media. They took the easy way out by signing with a network. They may well have to do it themselves.

I just don't know if that model is feasible, especially in this market.  It seems like the most likely solution is one produced by MLB which would provide a much better opportunity for signing large / national organizations to advertising contracts.  There would also be advantages to scaling the supporting infrastructure and personnel.  A coordinated effort through MLB would also likely make it easier to distribute game of the week type contracts so that there was not conflict.  IDK, there is much to consider.  My guess is that this evolves over the next few years. 

I want to address a few things the writer had to say, and a few things some of the comments had to say.  First, the argument I seem to be reading is that to improve the team they need to spend more to be better, and if they spend more we will more causing more fans to watch games.  Then the second is even if they are losing money, the team is rich and should be find losing money to make sure fans see high priced players. 

Well, payroll does not equal wins or WS wins.  Increasing it does not mean we will win any more than before.  Does it increase the chances, maybe, maybe not.  Looking just at Twins, we spent 11 mil on Gallo, many not happy about that deal, but he blocked Wallner from coming up earlier.  He earned 11 mil, but was outplayed by a league min guy. Further, San Diageo has increased payroll for years, and last year many on here said Twins should be like them.  However, they have yet to even make a WS either, and I read somewhere they had to take a loan to cover payroll.  It is accurate they increased attendance, despite not making playoffs.  Twins despite spending more last few years on payroll have lower attendance than in 2019.  So it is possible we will not see a huge uptick in attendance.  Outside of the first 2 years of Target field attendance has stayed pretty much between 2 mil and 2.5 mill, that goes back to beginning of 2002 stretch where they stopped bottom feeding, but still not spending more money. 

Overall, spending money on players does not mean more fans, winning means more fans, and spending money does not mean wins.  Look at the Mets.  Now to the second point, as pointed out, the Padres are cutting payroll a ton now, because they went way over what they could afford, despite the nearly 3 mil fans 2 years ago and over 3.2 million last year.  So they could not afford their payroll.  To expect a rich business owner to lose money on a business simply because they can is not a way to have a team stick around.  I do not think any fans should expect a team to lose money.  Yes, true we do not know the books, but we can estimate.  The paid attendance was about 2 million, just under, and average ticket price is about $35.  Yes some games they get more because of cost, and some seats get sold more, but also bulk buys and season tickets get discounts too.  So for math lets say just the 35 average. That is 70 mil from tickets sales.  If we increased to 3 mil that is 105, but we have only got to 3 mil a few times in history. 

Throw in concession sales, I will estimate 10 per person, only because some will spend much more some will spend none, but it is not all profit because there is the cost of the food and beverage as well. That is another 20 mil, for 90 mil.  We know reports said teams got 110 mil from tv sharing, 48% of tv, and we had about 26 mil to ourselves, after counting tv sharing. That puts us at about 226 mil.  Lets throw in an estimated 30 mil from merch, no clue if that is close or not, but I know I do not spend much on them year to year. So about 250.  We had a 150 payroll.  If that was only expenses, that would be a lot of cash to spend, however, do not forget there are a ton of employees that work day to day for team. There are travel costs.  There is equipment costs. There are minor league players costs. Each year they award like 10 plus million on signing bonus for drafted players, and a few more on international players. I do not know how much it adds up to, but it really cuts into that 100 mil about.  Now, this year not only are Twins losing broadcast money but other teams are up in air, which cuts into their share of the 48%, cutting that 110 down, and our 26 mil.  

Point is, cutting payroll may be only way to not lose money, and we should not expect a team to lose money, just as we should not expect an business to remain open losing money simply because we like it. I also have no clue if my estimates are high or low and by how much.  Other than the broadcasting money that has been documented. 

2 hours ago, chpettit19 said:

Atlanta Braves Holdings, Inc is a public company that owns the Braves and The Battery (the area around their stadium). Because of this we can see what their financials are. The MLB CBA includes a "Market Score" ranking of all 30 teams. The Braves are a 97 and rank 14th compared to the Twins at 17th and a 79 (like OPS+ it compare to the league as a whole). The Braves payroll for 2023 was about 203 million compared to the Twins at 156ish. According to MLB's own numbers on what teams should be able to make in their markets the Twins were 10 mil below the number they should be able to hit for payroll based on the Braves publicly released information.

I'm not asking the Pohlads to dig into their personal fortune to keep the Twins competitive, I'm asking them to run their business to the mark the CBA they signed says they should be able to. The Braves brought in $271,824,000 in revenue in Q3 2023. $15,558,000 of that was from The Battery. So their total baseball revenue was $256,266,000 for Q3 which included 37 home games. The Twins should be 18% lower ($46,127,880) than that so they should be at $210,138,120 in baseball revenue for Q3. They claim they spend 50-52% of baseball revenue on payroll. So Q3 alone should put them at $105,069,060 in payroll (50%). Q3 covers July, August, and September. So March, April, May, June, and October games aren't even included.

The Twins very clearly aren't hitting those numbers. And it's all rough math lacking a lot of context. But the Braves are the team that we can actually see the real numbers on. Are they significantly out producing their market score, or are the Twins underperforming theirs? One team has spent and built a team that looks like a juggernaut for the foreseeable future and watched their YoY baseball revenue increase by 11%. The other is slashing payroll. I'm sure one, or two, or three, of the much more educated business folks on these threads will slice these numbers up and tell me my expectations aren't realistic. But from the actual numbers we have we know that Atlanta is expected to be a basically average (3% below) market for producing baseball revenue while the Twins are supposed to be solidly below (21%) average market for producing baseball revenue. We know the Braves actual revenue. We know the Twins payrolls don't match the marks they're supposed to compared to the Braves. We know the Braves are publicly speaking about adding payroll while the Twins publicly speak about cutting it. I think it's pretty fair that we ask the Twins to step it up and improve their numbers.

Your right, there are lots of areas to dispute what you claim.

I don't have the CBA, Twins books, or the Atlanta quarterly filing.  But there is one area you are making a huge assumption that may not be accurate.  You are asking the Twins to have a payroll of roughly 18% less than Atlanta because the league has them rated at 79 versus Atlanta at 97.  First, I don't have a clue what those rating exactly mean.  But my point is that would mean that the other half of the Twins annual expenditures must also be 18% less than Atlanta.  Considering the emphasis the new FO has been putting on developing their minor league and analytics, I have a feeling the other half of the expenses may be very similar to what Atlanta spends.  Got a feeling they have the same number of scouts, etc.  Based on what the Twins did for their employees during COVID, heck, they may be spending more on the non player payrolls than Atlanta.  We do know they spent more to sign their draft picks as those pools are public.  I don't have the numbers with me, but I believe they also spend more on the International pool.  So if half of their expenses are non player payroll and they are similar to Atlanta, they need to spend 36% (18% *2) on player payroll to be equal.  

I know you won't accept this comment, but in this case the numbers don't lie.  And I will acknowledge I don't have either team's internal books to confirm my point.

2 hours ago, Major League Ready said:

Should we assume the Twins TV deals have always been among the lowest in the league because they are just that inept and negotiating a contract?  

Based on how the Twins have discussed the TV contract, yes, that's a fair assumption!  They've somehow managed to be surprised that the contract is expiring despite knowing this day was coming for a decade; a year ago they TURNED DOWN a 1 year extension offer for BSN in the range of $45mil;  they've lowballed themselves by talking about how meager a future deal is going to be; they've told anyone who is listening that they aren't counting on any TV revenue for 24, thus lowballing themselves even further; and they are telling fans that they are being punished for all this business savvy by being treated to a worse team in 24, which closes the circle of self-owns because viewership is directly correlated to team success and being worse is going to ensure a worse tv deal.  

Yeah I think there's plenty of reason to question this group's competence.  Just because they're rich doesn't mean they know what they doing.  

1 hour ago, Trov said:

Then the second is even if they are losing money, the team is rich and should be find losing money to make sure fans see high priced players. 

The Twins are not and have never been close to losing money in any season, with the exception, perhaps, of 2020. If this business was losing money it wouldn't be increasing in value at a rate 2x faster than inflation.

Nobody is asking the Twins to incur the highest luxury tax penalty like the Mets. I'm saying, don't starve the team of resources when you have a chance to win. That's what's happening in 2024. They're cutting back to protect (enhance?) profits when they could take a shot at the World Series.

"The Pohlads are the second-richest family in Minnesota. The Twins aren't their primary source of income. No Pohlad, present or future, would be impacted if they chose to go into the red to invest in this team, and we won't even know if they go into the red because their books aren't public. This family is wealthy beyond our imagination and owns a constantly appreciating asset that happens to be our favorite baseball team. If they want us to believe them that they are good stewards of this multi-billion dollar "community asset," they should show some respect for the community and try to win a World Series- instead of sucking any bit of profit out of the organization that they can."

How jejune, Adam, and utterly bemusing. Of greater concern is that you would ever consider a baseball team subject to collectivist expropriation, which may not be your intent but is the necessary conclusion of your viewpoint. The past 100 years in our world provide ample proof.

Stadium tax subsidies to support major league club owners, which happen far too often, are legitimate gripes. But your gripe does not appear rooted in "corporate welfare."

19 hours ago, chpettit19 said:

Build a better product worthy of fans going to the park and spending money. Get your product in front of more fans on the TV side so you build a larger fan base and can get more fans to the park to spend money. Don't take the excitement of the playoffs and immediately kill it by announcing a payroll decrease while you're trying to sell season ticket packages that get fans to the park to spend money. 

I have no idea what the Twins actually make. I know they're not losing money year after year, but I don't know what their actual numbers are. I do know what MLB expects the Twins to be able to make, and I know that MN sports fans sell out other stadiums/arenas and those teams make money, but those teams are far better run, with consistently good teams. The Wolves were terrible and had half empty arenas until new owners came in and started investing in the team, had it run significantly better, and now they're selling out that arena. MN fans will show up if you give them a reason to. Instead the team decided all on its own to destroy fan excitement immediately after the playoffs. If they're struggling to meet the expectations of this market financially it's not out of their control and just some impossible hurdle to overcome. Run your team better.

The combined attendance at Vikings, Wild, and Timberwolves games is less than what is needed for the Twins to reach the standard you set. Comparing what one team does in a different sport is apples and oranges argument 

19 hours ago, Woof Bronzer said:

Conversely, lack of investment is absolutely proven not to work.  Since the Twins' last Series only 1 team with a payroll rank at or below the Twins level (16-20 ish) won the World Series.  

Spending a bunch of cash is no guarantee of success.  Not spending cash, however, is pretty much guaranteed to not win you a Series.  

Which team that lost money has won the World Series?

17 hours ago, chpettit19 said:

I'm asking the Twins to have a payroll consistent with what MLB has said it should be compared to Atlanta's, yes. 

Why do you have a feeling the Twins have the same number of scouts, etc? What does them doing right by their employees in 2020 have to do with their non-player payroll being bigger than Atlanta's? That's an assumption based on nothing. The Twins list about 332 (I counted quickly so some names may appear multiple times so it wouldn't be exactly 332) members of their front office on their official site. The Braves list 383. Both teams include medical staffs, ticket sales, clubhouse employees, analysts, etc in their listings.

The Braves had a total revenue through the end of September of $572 million. Their baseball revenue was $528.7 million. If the Twins were doing roughly 18% less than the Braves like their market score indicates they could (if you don't want to believe that MLB based those scores off real things, or that the MLBPA doesn't think they're real but signed the CBA anyways, cool) they should have had about $433.5 million in revenue before the playoffs even started. I don't think the Twins are hitting those revenue numbers. But the Braves also account for every dollar in with a matching dollar out that doesn't include any dollars into an owners pocket. That's where a bigger difference in non-player payroll comes from. Far more than a few extra analysts making $20/hr that you think the Twins may have despite them not listing them on their website.

 

Do you have a link to this source?  It sounds like MLB has evaluated markets as to their potential.  You have somehow concluded that team spending should be based on potential as opposed to actual revenue which is fanatical logic.  I am not sure I can illustrate how vehemently this premise would be rejected in any major corporation in America.  I would guess most people who post here have the potential to make more money than they do presently.   Do you suppose posters here base their budget on potential or what they actually earn?

35 minutes ago, chpettit19 said:

Fine, don't want to compare sports? We can stick with Atlanta and MN baseball markets. Braves brought in 3.2 million fans last year. 18% less would be 2.6 for the Twins. The Twins hit 3 million during the first couple Target Field years, but had been consistently in the 2.3 to 2.7 range before and after those years. They were back up to 2.3 in 2019. But they've consistently failed to put a good product on the field so their attendance levels have dropped. So, yeah, I'm going to stick with the idea that if they build a better product fans show up because they've shown up in the past. But you build a perpetual loser and then slash payroll immediately after getting fans excited about your team again and you struggle to bring them in. Not exactly rocket science.

Then you build as Atlanta has done with a solid core of homegrown players augmented with cost controlled players, discounted free agents.

2 hours ago, old nurse said:

Which team that lost money has won the World Series?

If you think any MLB team is losing money that's absolutely hilarious.  Your arms must hurt terribly from carrying water for this organization.  I truly don't understand defending stingy billionaires who have nothing but contempt for fans like you.  

18 hours ago, BH67 said:

How jejune, Adam, and utterly bemusing. Of greater concern is that you would ever consider a baseball team subject to collectivist expropriation, which may not be your intent but is the necessary conclusion of your viewpoint. The past 100 years in our world provide ample proof.

Stadium tax subsidies to support major league club owners, which happen far too often, are legitimate gripes. But your gripe does not appear rooted in "corporate welfare."

Someone got a word of the day calendar for his birthday!  

If getting a half billion dollars in taxpayer money as a private company to build a cash cow stadium isn't "corporate welfare" then words have no meaning.