Even before colleague Phil Miller distilled some of the noise about the Twins' 2019 payroll into a thoughtful, balanced and nuanced story last weekend, I kept having thoughts about the economics of baseball and the Twins.
So now, with Miller's story as a backdrop, let's take a little closer look at one of the key issues at hand.
With no salary cap in Major League Baseball — and more importantly no salary floor, or minimum a team must spend — there is a wide variance in spending whereby teams can spend as much or as little as they want. It might hurt attendance, but they will be cushioned by other increasing revenue streams from massive national TV contracts, MLB Advanced Media and other sources. Even the lowest-revenue team, the Oakland A's, took in $210 million in revenue according to Forbes and operated at a profit.
In the NBA, by contrast, there is a salary cap AND a minimum of basketball related-revenue that teams must spend on player salaries — set between 49 and 51 percent a year, per the most recent collective bargaining agreement.
Twins officials have long said that their aim is right in that range: 50 percent of revenue going toward payroll. In reality, though, it has often fallen short — as Aaron Gleeman, the locally based editor in chief of Baseball Prospectus, noted in a tweet that started a lot of this conversation over the past week.
Looking at the previous year's revenue and next year's (which seems like a good way to do it), Gleeman found that in each of the past seven years the Twins have fallen short of 50 percent. Their collective revenue was $1.621 billion in that span, while their payroll was $723 million — a shortage in spending, he notes, of $87.5 million over seven years, or $12.5 million a year.
But here's the thing: That doesn't make the Twins unique. In fact, if we look at the most recent leaguewide example, it makes them average. Expressed as a percentage, the Twins have spent 44.6 percent of previous year's revenue on next year's payroll in that span.
Looking at MLB as a whole, the total revenue in 2017 (per Forbes) was $9.46 billion if you simply add up revenue from all 30 teams. And the total payroll in 2018, per Spotrac, was $4.18 billion. As a percentage, MLB teams spent 44.2 percent of their revenue on payroll.