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Looking For A Bump?

  • Blog Post by: John Bonnes
  • August 23, 2010 - 9:50 PM

This year, the Twins payroll increased almost 50% to $95 million. Next year, they’ll likely increase payroll again, and will need to given the payroll challenges they face. But how much will it go up? Can the Twins (and their fans) expect significant increases in revenues in the second and third years of a new ballpark? Is there any historical precedence for that?
 
There is, but it’s far from universal, and the average increase is downright depressing.
 
In this year’s Maple Street Press Twins Annual I wrote a comprehensive review of what other “small market” teams had done when they opened their new stadiums. I identified 13 since Camden Yards opened in 1992 and looked at how they increase payroll and how the new stadium impacted their franchise.
 
Today, let’s look at what happened the year after a new stadium opened (according to USAToday.com).
 
Team
Year
 Opening Year
 Next Year
% Change
Baltimore
1992
 $     20,997,667
 $     26,914,000
+28.18%
Cleveland
1994
 $     28,490,167
 $     35,185,500
+23.50%
Texas
1994
 $     32,423,097
 $     32,367,226
-0.17%
Seattle
1999
 $     44,371,336
 $     59,215,000
+33.45%
Houston
2000
 $     52,081,667
 $     60,387,667
+15.95%
Detroit
2000
 $     61,740,167
 $     49,356,167
-20.06%
San Francisco
2000
 $     53,541,000
 $     63,280,167
+18.19%
Milwaukee
2001
 $     45,099,333
 $     50,287,833
+11.50%
Pittsburgh
2001
 $     57,760,833
 $     42,323,599
-26.73%
Cincinnati
2003
 $     59,355,667
 $     46,615,250
-21.46%
San Diego
2004
 $     55,384,833
 $     63,290,833
+14.27%
Philadelphia
2004
 $     93,219,167
 $     95,522,000
+2.47%
Washington
2008
 $     54,961,000
 $     60,328,000
+9.77%
 
 
 
 Average
+6.84%
 
There isn’t a ton of consistency here. Some teams, like Baltimore, Cleveland and Seattle, all increased payroll significantly. However, in each case, there was a mitigating factor:
  • Baltimore barely increased payroll as their new stadium opened. The revenues that poured in from Camden Yards remarkable success were more than people really expected, and lasted far longer than it had for previous stadiums.
  • Cleveland was in the middle of a youth movement when Jacobs Field opened and that drove up salaries as those players gained service time.
  • Seattle’s number is a bit misleading because they opened in the middle of 1999. Their first full year wasn’t until the next year, which is when revenue climbed 33%.
 
On the other hand, the negative numbers can also be seen as anomalies, because they were all attached to terrible teams. The good teams on the list, like the Twins, generally saw increases. If you average them all out, the average increase of 6% would only mean a payroll of about $100 million for the Twins next year. That would mean losing several players on this year’s team.
 
But it isn’t crazy to suggest that the Twins could increase payroll by as much as 20% next year. It isn’t common for MLB teams, and it doesn’t look like teams generally see that kind of revenue bump in a stadium’s second year. But it has happened.
 
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Anyone want to talk about last night's game? No? Fine by me.
 
Reminder: You're busy for Saturday's Twins Game. You'll be in St. Cloud, watching it with Seth, Sooz and I. 2:30 to 6:30 at Howie's in downtown St. Cloud and we'll have the usual specials and drawing. It's time for out-state Twins fans to flex their muscles a bit, I think.

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