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  • Money Matters

    Originally posted at Knuckleballsblog.com.

    I’m constantly struck by how so many otherwise intelligent people suddenly sound like idiots when discussing issues related to money. A number of these people are certainly not idiots… they’re accomplished business owners and/or people who have achieved considerable success at running businesses. So if they aren’t as stupid as the words they’re saying makes them sound, one can only assume that they think the people hearing/reading their words are stupid enough to believe what they’re saying.

    Yes, I’m referring primarily to the Twins front office.


    It was over a month ago that the Twins held a press conference and made owner Jim Pohlad, President Dave St. Peter and General Manager Terry Ryan available to the mainstream media. Predictably, the topic of the team’s potential 2013 payroll came up. Also predictably, the Twins brass was non-committal. Here’s an excerpt from the story written at the time by MLB.com’s Twins beat reporter Rhett Bollinger (click here for the link):
    Pohlad said that payroll will not be a concern this offseason, but wouldn’t give a firm number on what that will be. The Twins entered the 2012 season with a payroll right around $100 million.

    “We’ve never told anybody they have to spend ‘X’ dollars or that they can’t spend whatever they are recommending,” Pohlad said. “So it could go up, it could go down. It’s whatever Terry tells us. We’ve talked about spending in that 50 percent of revenue, but it doesn’t mean Terry will spend that.”


    Ryan said that the payroll situation will be fluid and that it should not hinder him from acquiring the starting pitching the club needs to compete next season.


    “I think we can quit fooling ourselves that money is the answer,” Ryan said. “We’re going to have to make good decisions to create a pitching staff that’s going to give us a chance.”

    Well, I’m glad they put that question to rest, aren’t you? I’m so glad to know that money doesn’t matter.

    We don’t know whether the Twins could have made a deal with the Marlins for the same package of players that they dealt to Toronto last week. There’s absolutely no doubt, however, that the addition of Josh Johnson, Mark Buehrle and Jose Reyes would have gone a long way toward addressing the biggest holes in the Twins lineup and the level of players the Jays sent back to Miami certainly could have been made available by the Twins.

    So why wasn’t it the Twins that made the deal? I don’t know. But it’s such a friggin relief to know that whatever the reason was, it wasn’t money!

    The Twins also lost Scott Baker to the Cubs last week. Baker got a good deal. $5.5 million guaranteed with another $1.5 million in incentives on a straight one year deal. According to the Star Tribune’s beat reporter, Joe Christensen, the Twins were very interested in keeping Baker, but wanted an option year for 2014, which Baker wouldn’t agree to. Again, it makes me feel so much better to know that the reason Baker won’t be wearing a Twins uniform in 2013 had nothing whatsoever to do with money.

    Here’s something I’ve learned from working in Corporate America for the past 30+ years: Whenever someone in senior management tells you, “It’s not about the money,” that means that money is exactly what it’s all about.

    As Twins fans, we’ve become programmed to just accept the “company line.” We’ve been hearing it since the days of Calvin Griffith and on through the Pohlad era at the Metrodome. Sure, there were hints that having a new stadium and the revenues it would generate might change things, but by and large, the fan base has continued to just accept the, “we’ll spend 50% of revenue on payroll,” line of crap that has always come out of the Twins’ offices.

    It has become second nature, to the point where Twins fans seem to almost think that’s how every Major League team does business and we act surprised when other teams behave differently.

    The Tigers went to the World Series, but clearly needed to improve at a corner outfield position. They looked for the best option on the market, moved quickly and signed Torii Hunter to a deal that seemed like it was a little excessive, given his age. How can they do that? Won’t that mean their payroll might exceed half of their revenues? Ah, but they’ve got an old owner who wants to win a World Series before he dies, so that’s why they can do what the Twins won’t, right?

    The Blue Jays saw themselves needing much the same kind of help that the Twins need. They agreed to take on more years of higher salaries than they might have really been comfortable with, but they made the deal because they want to compete. But that’s ridiculous, right? Boy, they’ll sure regret having Buehrle and Reyes on the payroll toward the back end of those contracts because in a couple of years, their payroll might exceed half their revenues! Ah, but they’re owned by a giant Communications conglomerate and that’s why they aren’t limited as to payroll.

    I’ve got a news flash, folks. Every team starts the offseason with a self-examination that identifies what their biggest needs are. The next step for most teams that are committed to being competitive is to identify the best options available via free agency or trades to meet the identified needs. Unless you’re the Rays (who have a whole bunch of financial issues unrelated to the quality of their team), your front office knows that the quality of the product on the field drives revenue.

    But if you’re a Twins fan, you’ve been conditioned not to ask who would best fill the team’s needs, but who would fit in to the Twins’ designated payroll limit. That’s because the Twins have historically seemed oblivious to the basic business tenet that product quality drives revenues.

    They’ve brainwashed fans in to believing that the only reasonable way to operate a business is by subscribing to the theory that a drop in revenues last year means they must cut payroll next year. It’s time for fans to become deprogrammed from that mindset and let the Twins know that their fan base is not as stupid as the club has treated them as being.

    Maybe I’m being premature with this criticism. After all, it’s still early in the offseason and the Winter Meetings are still a couple of weeks away. Terry Ryan may actually sign honest-to-goodness legitimate starting pitchers to fill the Twins’ needs in that area, regardless of the cost. He may make a trade or two that will improve the middle infield, even if it means making his bosses nervous. Maybe he’ll prove that his words about payroll not hindering him from doing his job were more than just more of the same BS we’ve heard for the past decade.

    But until the Twins start ACTING like money doesn’t matter, they should stop saying it. It just makes them look like fools… or like they think that’s what we are.

    - JC
    This article was originally published in blog: Money Matters started by Jim Crikket
    Comments 90 Comments
    1. MikeBates's Avatar
      MikeBates -
      Yes, payroll matters. Spending money matters. Teams that can spend more tend to be able to retain and acquire better players. That said, spending excessive amounts on free agent talent is a good way to ruin your chances for 2013-2017, and as Bill points out, the amount of money (or the quality of prospects) it would take to acquire the kind of talent it would take to make the Twins contenders is prohibitive and will cripple this team in future seasons.

      To argue otherwise is ludicrously unrealistic unless you're counting on Liam Hendriks and Cole DeVries to take huge steps forward.
    1. Bill Parker's Avatar
      Bill Parker -
      Quote Originally Posted by Kwak View Post
      The destruction of the 2010 team (in order to extend Mauer) was a clear indication that the original premise was false. The Twins didn't extend Mauer (with his increase) and keep the rest of the team.
      Wait, what? They didn't destroy anything, or at least not for financial reasons. They traded Hardy, stupidly, but it was because they didn't like him, not because he was expensive. They brought Thome and Pavano back. They let Cuddyer and Kubel go when other teams were willing to pay them way, way more than they were worth, and brought back Willingham and Doumit, better players at better prices. The team was "destroyed" by injury, not financial decisions.
    1. Seth Stohs's Avatar
      Seth Stohs -
      It's good to have another strong voice for Common Sense here on the site... thanks Bill Parker for stopping by today and sharing your wisdom... When I say stuff like that, it goes on deaf ears!!
    1. Nick Nelson's Avatar
      Nick Nelson -
      Quote Originally Posted by Bill Parker View Post
      There's no amount of money they could throw at this to help things in 2013.
      This seems like a pretty ridiculous statement to me. Spending money and acquiring good players will certainly help things in 2013. Better players make the team better. Whether spending money will be enough to get them back into contention is another story, but in my view they're pretty close with two of the three units (I disagree the notion that this team has a "crap bullpen").

      To be clear, the full-out rebuild that you recommend requires the Twins to:

      A) Draft and develop quality pitching, something they haven't done recently.
      B) Identify quality pitching prospects to acquire, something they haven't done recently.
      C) Keep a quality offensive core intact, while Joe Mauer begins to age past his prime.

      I think you're underestimating the challenges and risks involved with your plan. The Twins could easily tread water for years in the name of rebuilding and find themselves in the same spot three seasons down the line, only their best player will be 33 instead of 30.

      I certainly don't think the Twins should be making moves that are completely aimed at short-term contention, but signing free agents pitchers to three-year deals when you've got almost nothing in the pipeline is hardly irresponsible.
    1. Boom Boom's Avatar
      Boom Boom -
      Does this issue come up as often with other teams' fans? We sure discuss payroll limits a lot as Twins fans.
    1. Twins Fan From Afar's Avatar
      Twins Fan From Afar -
      I commented on knuckleballsblog.com, and will repost it here:

      Sort of branching off of your main point about it not being about the money when it really is, I have been thinking about the Twins’ failure to develop talent at certain positions. Over the past several years, we’ve been blessed (more or less) with the ability to field a competitive outfield without having to pay a guy $20 million a year to play center field. Kirby, Torii, Denard, and even Ben Revere have done well in that position and never completly broke the bank. In other words, we haven’t had to grossly overpay for outfielders. And it’s a trend that I think will continue with guys like Oswaldo Arcia, Aaron Hicks and (hopefully) Joe Benson.

      But what do you do when you consistently cannot develop MLB average or above-average talent at a particular position? You have to pay market price, whatever that currently is, or you have to trade away prospects that you highly value in order to make up that deficit — if you want to be competitive, that is.

      With the Twins, of course, it’s the inability to develop starting pitchers that is extremely problematic (and middle infielders, too, but to a somewhat lesser extent). It hurts as a Twins fan to think that we could have a cost-controlled outfield for the next few years, but that ownership is seemingly unwilling to “make up” for that financial surplus by investing some extra money in starting pitching.

      Yes, we’re hardly into the offseason, and I hope that I’m wrong. But I am a little nervous that Joe Blanton is going to be our prized starting pitching pick-up this winter.
    1. Nick Nelson's Avatar
      Nick Nelson -
      Quote Originally Posted by Twins Fan From Afar View Post
      But what do you do when you consistently cannot develop MLB average or above-average talent at a particular position? You have to pay market price, whatever that currently is, or you have to trade away prospects that you highly value in order to make up that deficit — if you want to be competitive, that is.
      Well said. Too often, I see TR pointing to things like the waiver wire and the Rule 5 draft as if they're legitimate methods of acquiring impact players. Beyond that, he calls out guys like Florimon as if they're actual solutions. Who is he trying to kid? If you can't develop your own talent you need to buy external talent. Sometimes you do have to spend your way out of a hole rather than plugging your ears and pretending it doesn't exist.
    1. Riverbrian's Avatar
      Riverbrian -
      The Farm is the long term solution. I'd spend money on scouts and coaches. I'd make the minor leagues palaces of development.

      As for 2013... We have a big need and money to spend. Lets see what happens.

      This discussion goes so many ways on this site. We have some who say Joe Mauer is paid too much and people who say that we are too cheap.

      I don't think we are cheap... Mauer and Morneau are examples of an organization that is willing to spend.
    1. mike wants wins's Avatar
      mike wants wins -
      When have they spent to fill that one hole? According to Hunter and Santana, and many fans, never. What good does not spending money this year do? Will they then spend that savings in a year or two? Of course not, " because spending on free agents is no way to build a team" apparently. Take out Mauer, is the payroll really that much more than the dome?
    1. Brock Beauchamp's Avatar
      Brock Beauchamp -
      Great article, Jim. One of the best I've read this offseason.
    1. Jim Crikket's Avatar
      Jim Crikket -
      Quote Originally Posted by Nick Nelson View Post
      Quote Originally Posted by Bill Parker View Post
      There's no amount of money they could throw at this to help things in 2013.
      This seems like a pretty ridiculous statement to me. Spending money and acquiring good players will certainly help things in 2013. Better players make the team better. Whether spending money will be enough to get them back into contention is another story, but in my view they're pretty close with two of the three units (I disagree the notion that this team has a "crap bullpen").

      To be clear, the full-out rebuild that you recommend requires the Twins to:

      A) Draft and develop quality pitching, something they haven't done recently.
      B) Identify quality pitching prospects to acquire, something they haven't done recently.
      C) Keep a quality offensive core intact, while Joe Mauer begins to age past his prime.

      I think you're underestimating the challenges and risks involved with your plan. The Twins could easily tread water for years in the name of rebuilding and find themselves in the same spot three seasons down the line, only their best player will be 33 instead of 30.

      I certainly don't think the Twins should be making moves that are completely aimed at short-term contention, but signing free agents pitchers to three-year deals when you've got almost nothing in the pipeline is hardly irresponsible.
      Well said, Nick, but I'd add another item to the list of things the Twins would have to do in order to go the "full re-build" path: D) Accept that attendance levels are likely to fall to the Metrodome levels by the time today's future stars are productive Major Leaguers.

      There's absolutely no reason why this has to be an "either/or" situation. Fans should not just sit back and accept the Twins' contention that they are still a small-market team that can only put a competitive product on the field when a group of good home-grown talent cycles through the organization. Spending money on pitching now will put a competitive team on the field in 2013, keeping fans in the seats, and you still have those current 20-year-olds coming up through the organization. Nobody is suggesting that you trade away every member of your "top 10 prospect list." But the Twins are now a solid mid-market franchise with no shortage of revenue streams (which stand to see a significant bounce in 2014). Fans who accept the "we can only be good every few years" stuff are just playing in to the front office's hands.
    1. Bill Parker's Avatar
      Bill Parker -
      Nick, all fair points, except I don't think the alternative is any better. As I think I demonstrated pretty well above, it's going to take a miracle to contend in 2013. The likely effect of an active winter in free agency would be to make them a 75-78 win team instead of 70-72. That's not, despite Jim's contention just above, going to do anything to keep fans interested, and history has plenty of precedent for that, too. It's just building a more expensive loser, and you're facing a future just as uncertain as under the rebuilding plan, except that in the event the pieces do start to fall into place and you're ready to make a push in 2015 or so, the payroll is saddled with the aging vets' contracts you signed two years ago.
    1. h2oface's Avatar
      h2oface -
      can i get a witness! tell it, jim crikket! the way ryan and gardenhire often talk down to astute, alert, and caring fans is key. i really enjoyed your perspective. it seems common sense is often misinterpreted.
    1. mike wants wins's Avatar
      mike wants wins -
      And how will they have pitching in2015 if they do not sign free agents then? What are the odds they have hitters as good as morneau and Willingham and span? Or that Mauer is still great?
    1. Bill Parker's Avatar
      Bill Parker -
      Quote Originally Posted by mike wants wins View Post
      And how will they have pitching in2015 if they do not sign free agents then? What are the odds they have hitters as good as morneau and Willingham and span? Or that Mauer is still great?
      Haha, I give up. I'm just going to repeat my request from the message to Jim above: please find me examples of teams that lost around 100 games two years in a row, then spent a bunch of money, and it ended up as anything but a disaster for the team. Even just one example would really be something.
    1. YourHouseIsMyHouse's Avatar
      YourHouseIsMyHouse -
      If the Twins ownership refuses to set a budget of around $112.5 or around $110 million I will feel like the Twins are taking the fans for a ride. The $100 million budget last year + the Pohlad's "50%" spending on the new TV deal should put us there. Should spending go up when we aren't a good team? Maybe not, but consider this. Pohlad would be making more money when the team is bad. Is that right?ABSOLUTELY not.
    1. dwintheiser's Avatar
      dwintheiser -
      I can't really get behind the thought process on display here. Sure it sounds good to say 'hey, spend more money and get more wins -- the Yankees do', but there are a couple of points standing in my way of supporting that as a short-term strategy:

      1) As much as everybody likes to talk about the Yankees, they're one data point -- and we already know that inferences based on small sample sizes often prove flawed. How about the Phillies, who stood pat on payroll and dropped 21 games from 2011 to 2012? The Red Sox, who increased payroll by over $11 million and dropped 21 games into the basement of the East? The Brewers, who upped payroll by over $12 million and dropped 13 games out of playoff consideration? The D'Backs, who spent an extra $20 million and dropped 13 games and out of playoff consideration?

      Money isn't the obvious answer -- as should be obvious by the simple observation that payroll increases league-wide every year, but the number of wins in the league doesn't. And as noted above, the teams that increase payroll the most don't always get value for it.

      2) It's all very well and good to say 'we'll spend money on some better guys'. OK, bang, you're the GM. Who are those 'better guys' you're going to go get? I tried making a similar point on Gleeman's site some years ago, that you couldn't just say you were going to spend money on a 'better third baseman' -- you had to say who you were going to get who was better. If you don't have a plan for how to spend that money, you end up signing guys like Nishioka and Sidney Ponson. Ryan and the brain trust are exactly right -- when the right guy is available, at the right price, get him. Otherwise, let someone else overpay.

      I mean, let's be honest here, guys -- the 'we don't spend enough money' meme is starting to sound like a broken record, getting repeated over and over again even when it's not deserved. The Twins were in the upper half of baseball in payroll in 2012, and half the teams in the playoffs spent less money than they did. The Twins were in the top 10 in payroll in 2011, and over half the teams in the post-season spent less money, including the division-winning Tigers.

      It sounds good to vent about money, but the problem isn't payroll -- the problem is finding good players who are worth the price.
    1. mike wants wins's Avatar
      mike wants wins -
      I guess I should give up also, since no one will answer how they will ever have pitching if they will not sign free agents.....look, I cannot name a team other than Philly or new York or the dodgers or Marlins that have tried this. That does not imply it cannot work. Your path is virtually certain to condemn them to being awful for at least two more years, and even then, they still will not sign free agents. So it seems they are stuck
    1. mike wants wins's Avatar
      mike wants wins -
      Oh, and in the mean time, the owners will get richer off the taxpayers.
    1. mike wants wins's Avatar
      mike wants wins -
      If you have 1 starting pitcher, 1, you need to spend money.....should I point out how the Phillies got better before your examples? There are anecdotes both ways, the question is, which way is more likely to produce a winning team given the position they are in now? And cost cutting does not help them long term, because they do not reinvest those savings later.
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