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TwinsCentric: The $15,000,000 Question

Posted by: John Bonnes Updated: February 2, 2012 - 8:18 AM

 

Today’s mystery category? Let’s see if you can guess from the clues…

 

"What are the Twins television revenues?"

"Why is everybody bitching about a $100 million payroll?"

"Why couldn't the Twins sign Prince Fielder?"

If you didn’t get it, don’t be too hard on yourself - it’s a little convoluted. The category is “What questions avoid THE question?”

In Twins Territory, THE question has been: why did payroll go down $15 million following the second year of a publicly funded stadium? But because MLB teams keep their financial information so private, journalists are limited in the information they can dig up. Since that information doesn’t give the whole story - and because they want to share that information that they’ve uncovered - they find other questions so they can still publish the story. Or, they list what they found, and refer to it generally, but offer few specifics.

My pithy intro might suggest I’m being critical of that strategy. I’m not - for two good reasons. First, because these are usually fine questions to answer, and every answer adds a piece to the puzzle. Second, because I‘m about to do much the same thing.

On Friday night, in a Q&A session at the end of the Hot Stove Banquet, Twins President Dave St. Peter answered THE question candidly, if generally. He listed 3 factors:

1) The Twins stretched payroll slightly last year, and so the reduction isn't really $15M over last year's budget.

The last signing of last year's offseason was Carl Pavano, who signed for $8M. At the time, the Twins claimed they stretched a little to make that signing, and before that signing they were still looking into other players, albeit less expensive ones. So let's assume that accounts for $2-3M of the difference.

2) The Twins will need to pay more for draft picks then they did last year.

Last year the Twins paid about $3M for their top draft picks. This year the Twins will have five picks in the top 75. Thanks to the new collective bargaining agreement, we know almost exactly how much those picks should cost: about $11M.

That's $8M plus $2-3M from stretching last year and now the Twins are down ~$10-11M. We have $4-5M left to find.

3) Finally, St. Peter anticipates a drop in revenue. He clarified this a few minutes later when he said that revenues from the ballpark tend to normalize on a per capita basis. In other words, as the novelty of a new ballpark wears off, people spend less on each trip to the ballpark.

(By the way, the Twins also revealed during the media luncheon on Friday that they only anticipate about a 4% decrease in season tickets this year.)


That makes sense. Since payroll is supposed to be about 50% of the total revenue, a $4-5M decrease in payroll would reflect an $8-10M decrease in revenue. That seems high to me, but not totally unreasonable, especially when St. Peter added that they aren't budgeting for 3,000,000 in attendance this year.

(That last note, by the way, could further explain
Phil Mackey’s story about Jim Pohlad taking a “wait-and-see” approach. When I read that story, I was outraged: ownership was expecting fans to make a financial commitment but wasn’t willing to make one itself. Reading between the lines, I wonder if the story isn’t a little different. After last year’s disaster, and with so much uncertainty, ownership directed management to use more conservative models for anticipated revenue. The effect is the same, and it’s essentially what Mackey’s sources said, but somehow this infuriates me less.)

This shouldn't be meant to imply that I approve, or even completely understand. For instance, I still believe it is pennywise and pound foolish to not invest and additional $2M in backup plans at two especially questionable roster spots. And it isn't clear to me why some of that decrease isn't offset by increases in shared national revenues, which consistently increase for MLB teams. I still haven’t answered the question.

But it gets us closer, and leads to some good news/bad news. The bad news is that the Pohlads are not the Ilitchs - they run a business as a business, and not as a charitable organization, no matter how much fun it would be to win a World Series. But it also implies that two of those three cuts should be one-time events.

Hopefully so will this payroll reduction. Which may have been the real $15,000,000 question I wanted answered.
 

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Detroit «00100002X340
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Minnesota 16 FINAL
Buffalo 17
Atlanta 7 FINAL
Baltimore 29
Tennessee 17 FINAL
Washington 19
Seattle 26 FINAL
St. Louis 28
Cleveland 6 FINAL
Jacksonville 24
Cincinnati 0 FINAL
Indianapolis 27
Miami 27 FINAL
Chicago 14
New Orleans 23 FINAL
Detroit 24
Carolina 17 FINAL
Green Bay 38
Kansas City 23 FINAL
San Diego 20
Arizona 24 FINAL
Oakland 13
NY Giants 21 FINAL
Dallas 31
San Francisco 17 FINAL
Denver 42
Houston 7:30 PM
Pittsburgh
San Diego 10/23/14 7:25 PM
Denver
Detroit 10/26/14 8:30 AM
Atlanta
Boston 95 FINAL
Brooklyn 90
Minnesota 112 FINAL
Oklahoma City 94
Golden State 83 FINAL
Houston 90
Charlotte 96 FINAL
Chicago 101
Utah 91 FINAL
LA Lakers 98
Minnesota 1 FINAL
Los Angeles 2
San Jose 0 FINAL
NY Rangers 4
Calgary 4 FINAL
Winnipeg 1
St. Louis 0 FINAL
Anaheim 3
TX-San Antonio 20 FINAL
Louisiana Tech 27
Syracuse 30 FINAL
Wake Forest 7
Purdue 38 FINAL
Minnesota 39
Western Ky 38 FINAL
Fla Atlantic 45
(12) Baylor 27 FINAL
(22) West Virginia 41
(11) Kansas State 31 FINAL
(17) Oklahoma 30
Iowa 31 FINAL
Maryland 38
So Florida 38 FINAL
Tulsa 30
Tulane 13 FINAL
UCF 20
Virginia 13 FINAL
Duke 20
Akron 20 FINAL
Ohio U 23
Western Mich 26 FINAL
Bowling Green 14
Eastern Mich 14 FINAL
Massachusetts 36
Appalachian St 53 FINAL
Troy 14
(25) UCLA 36 FINAL
California 34
Texas A&M 0 FINAL
(4) Alabama 59
Army 17 FINAL
Kent State 39
Kansas 21 FINAL
Texas Tech 34
UAB 22 FINAL
Middle Tennessee 34
Rutgers 17 FINAL
(13) Ohio State 56
(8) Michigan State 56 FINAL
Indiana 17
New Mexico 31 FINAL
Air Force 35
NC State 18 FINAL
Louisville 30
(21) Clemson 17 FINAL
Boston College 13
Ball State 32 FINAL
Central Mich 29
Cincinnati 41 FINAL
SMU 3
(9) Georgia 45 FINAL
Arkansas 32
Oklahoma State 9 FINAL
(10) TCU 42
San Jose St 27 FINAL
Wyoming 20
Miami-Ohio 41 FINAL
Northern Ill 51
New Mexico St 17 FINAL
Idaho 29
Colorado 28 FINAL
(20) USC 56
(23) Marshall 45 FINAL
FIU 13
Southern Miss 30 FINAL
North Texas 20
Georgia Tech 43 FINAL
North Carolina 48
Tennessee 3 FINAL
(3) Ole Miss 34
Utah State 13 FINAL
Colorado State 16
Missouri 42 FINAL
Florida 13
Kentucky 3 FINAL
(24) LSU 41
(16) Nebraska 38 FINAL
Northwestern 17
Georgia State 27 FINAL
South Alabama 30
Washington 20 FINAL
(6) Oregon 45
Iowa State 45 FINAL
Texas 48
(7) Notre Dame 27 FINAL
(2) Florida State 31
Nevada 42 FINAL
BYU 35
Stanford 10 FINAL
(14) Arizona State 26
Hawaii 10 FINAL
San Diego St 20
Arkansas State 10/21/14 7:00 PM
Louisiana
Connecticut 10/23/14 6:00 PM
(18) East Carolina
Miami-Florida 10/23/14 7:00 PM
Virginia Tech
So Florida 10/24/14 6:00 PM
Cincinnati
Troy 10/24/14 6:30 PM
South Alabama
BYU 10/24/14 8:00 PM
Boise State
(6) Oregon 10/24/14 9:00 PM
California
North Texas 10/25/14 11:00 AM
Rice
UAB 10/25/14 11:00 AM
Arkansas
Rutgers 10/25/14 11:00 AM
(16) Nebraska
Maryland 10/25/14 11:00 AM
Wisconsin
Texas 10/25/14 11:00 AM
(11) Kansas State
Minnesota 10/25/14 11:00 AM
Illinois
Memphis 10/25/14 11:00 AM
SMU
North Carolina 10/25/14 11:30 AM
Virginia
San Jose St 10/25/14 12:00 PM
Navy
Northern Ill 10/25/14 12:00 PM
Eastern Mich
(25) UCLA 10/25/14 1:00 PM
Colorado
Akron 10/25/14 1:00 PM
Ball State
Massachusetts 10/25/14 1:00 PM
Toledo
Ohio U 10/25/14 1:00 PM
Western Mich
Ga Southern 10/25/14 1:00 PM
Georgia State
Kent State 10/25/14 1:30 PM
Miami-Ohio
Oregon State 10/25/14 2:30 PM
Stanford
Fla Atlantic 10/25/14 2:30 PM
(23) Marshall
Louisiana Tech 10/25/14 2:30 PM
Southern Miss
(1) Miss State 10/25/14 2:30 PM
Kentucky
Georgia Tech 10/25/14 2:30 PM
Pittsburgh
(22) West Virginia 10/25/14 2:30 PM
Oklahoma State
Texas Tech 10/25/14 2:30 PM
(10) TCU
Michigan 10/25/14 2:30 PM
(8) Michigan State
Boston College 10/25/14 2:30 PM
Wake Forest
Central Mich 10/25/14 2:30 PM
Buffalo
Vanderbilt 10/25/14 3:00 PM
Missouri
Old Dominion 10/25/14 3:00 PM
Western Ky
UNLV 10/25/14 3:00 PM
Utah State
Temple 10/25/14 4:00 PM
UCF
(15) Arizona 10/25/14 5:00 PM
Washington St
Texas-El Paso 10/25/14 6:00 PM
TX-San Antonio
Wyoming 10/25/14 6:00 PM
Colorado State
Syracuse 10/25/14 6:00 PM
(21) Clemson
Texas State 10/25/14 6:00 PM
ULM
(3) Ole Miss 10/25/14 6:15 PM
(24) LSU
(4) Alabama 10/25/14 6:30 PM
Tennessee
So Carolina 10/25/14 6:30 PM
(5) Auburn
(13) Ohio State 10/25/14 7:00 PM
Penn State
(20) USC 10/25/14 9:00 PM
(19) Utah
(14) Arizona State 10/25/14 9:45 PM
Washington
Nevada 10/25/14 10:59 PM
Hawaii
Columbus 3 FINAL
Red Bull New York 1
Seattle 2 FINAL
Los Angeles 2
Ottawa 6 FINAL
Hamilton 16
Montreal 20 FINAL
Toronto 12
Calgary 33 FINAL
Winnipeg 23
Edmonton 24 FINAL
Saskatchewan 19
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