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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. chagen's Avatar
      chagen -
      What amazes me is when you bring this topic up than you have apologists like Phil Mackey write a column saying why the Twins are limited in what they can spend.

      Seth Stohs is kinda like this.

      The truth is if they really wanted to win they could open up there checkbooks just like the Tigers and we could at least be a playoff team.
    1. USAFChief's Avatar
      USAFChief -
      Nicely done.

      I think proof of your theory can be found in this: there are those on this very site who believe that when a extra $25M drops out of the sky in 2014 (from new national TV deals), the Twins can only put half of that money towards the on field product.
    1. Jim H's Avatar
      Jim H -
      The problem with this article is that while spending money should make it easier to be a contender, it sure doesn't guarantee it. Every year high spending teams with impressive looking rosters on paper, don't contend. The Mets seemingly forever, the Rod Sox the last couple years, Miami, the Dodgers, and many others. This is was the first year the Orioles contended much less made the playoffs, even though they nearly always have an impressive payroll. Certainly the last few years Tampa HAS contended while keeping their payroll down. Oakland managed to do that this year.

      Whether the Twins should spend more money than they do is largely a matter of opinion. I won't join that discussion. It is true that the Twins spent more on payroll the last 2 years than they ever have and had 2 of their worst seasons, ever. In order to successful the Twins need to spend whatever money they choose to spend, wisely. They also need to be a bit luckier as regard to injuries. They need some of their young players to develop a bit quicker. It would really help if Hendriks is the real deal, if Gibson is completely recovered, and if Hermsen is a lot better than people seem to think.

      Finally, it is too early to decide that the Twins won't spend money or do the things necessary to improve their roster. Wait till Feb. 1 and then write your negative article if you feel the need.
    1. Bill Parker's Avatar
      Bill Parker -
      Quote Originally Posted by chagen View Post
      The truth is if they really wanted to win they could open up there checkbooks just like the Tigers and we could at least be a playoff team.
      No, they couldn't. That kind of thinking is how decent teams become the late-1990s Orioles and Dodgers. There's a time when opening up the checkbook makes good sense (the Tigers now, the Twins three years ago), and a time when it doesn't (the Twins now, the Tigers a decade ago). There's no amount of money they could throw at this to help things in 2013.
    1. gunnarthor's Avatar
      gunnarthor -
      Payroll matters a lot and it's one of the reasons I think Smith is no longer GM. That said, I do think Ryan is a good GM who can do good things with a cramped payroll. I don't want to blame the FO for what I assume to be ownership issues. It was nice to see Howard at the Strib bring this up last week.
    1. Jim Crikket's Avatar
      Jim Crikket -
      Quote Originally Posted by Bill Parker View Post
      Quote Originally Posted by chagen View Post
      The truth is if they really wanted to win they could open up there checkbooks just like the Tigers and we could at least be a playoff team.
      No, they couldn't. That kind of thinking is how decent teams become the late-1990s Orioles and Dodgers. There's a time when opening up the checkbook makes good sense (the Tigers now, the Twins three years ago), and a time when it doesn't (the Twins now, the Tigers a decade ago). There's no amount of money they could throw at this to help things in 2013.
      Bill, that's exactly the kind of brainwashing I was referring to. "No amount of money" could help in 2013? I'm sorry, but I don't believe that, even if that is what the Twins want you to believe. If they can convince fans that no amount of money would help, they're off the hook... they don't have to spend ANY money.

      While Jim H is correct in that it takes wise decisions to build a contender and it wouldn't hurt to have a little luck, having additional money to work with DOES matter and if used wisely by Terry Ryan, this team could see major improvements in 2013. The Twins, as currently constituted, can score runs. They need better defense in the middle infield, but most of all they need pitching. There's no shortage of pitchers available both via trade and free agency (despite Ryan's contention that it's a 'thin' market). Investing in that pitching would make for a much better product on the field and would stem the dropping attendance, keeping revenues at higher levels necessary to maintain an acceptable level of competitiveness.
    1. Rosterman's Avatar
      Rosterman -
      It's a poker game. Too often, don't see the Twins being aggressive, yet they did manage to sign Doumit and extend him for a reasonable contract, and got Willingham for much less than Cuddyer. But sometimes they play "best offer" hardball too much and too late with their own players. It is a carpshoot. Let the Twins spend $100 million more on three top-of-the-line starters and a couple of bats for next year....would they still runaway with the division? Who knows. It's more a fan thin g "where is the money I spend going towards putting a winning team, not just an entertaining team, or a competitive team, on the field." I still don't understand this 50% of revenue thing (which more people take note of now with the additional money coming in for TV....half goes to payroll and half goes where -- get TV a motorized trike?). It is such a fickle business. You have to evaluate new talent, you have to know when to trade old talent for equal or best value, you can't hang onto vets too long and get absolutely nothing. Those are the areas I would question more with the Twins than actual $$$$'s spent, most of the time. Last season, I have nothing against what they got for Liriano. He did nothing for the Sox and if the Twins want him, are actually in a better position to resign him. They threw away money on Zumaya and Marquis. The Toshi thing was an embarrasment, the Japan team basically got the Twins to pay his salary now for the next few years with the fee the Twins played. We don't know offers the Twins may have actually fielded for Morneau and Span. Maybe better stuff will come this winter, or mid-season...but those decisions have to be made before......the stinkers of Pavano and Capps, two chips that wasted payroll space, a draft choice, and not even bringing back a bucket of balls, but who knew. Spending money doesn't always solve the problems, getting the right players do.
    1. mike wants wins's Avatar
      mike wants wins -
      It is a straw man to say that money does not guarantee success. No one on the crikkets side is claiming that. What people are saying is that money increases your margin of error, and increases the likelihood of signing better players. No one is saying guarantee. No one. Does anyone doubt this team would probably be better if they spent 50 million more next year? Probably, not guaranteed.
    1. Winston Smith's Avatar
      Winston Smith -
      From the Strib back in August:
      "A unit of Pohlad Companies, the business conglomerate that includes the Minnesota Twins, J.B. Hudson Jewelers and United Properties, Monday upped its stake in the Twin Cities luxury automobile market with the acquisition of Audi, Porsche and Mercedes dealerships.
      Pohlad's Twin Cities Automotive (TCA) announced the purchase of Carousel Audi and Porsche in Golden Valley, and Audi, Mercedes-Benz and Porsche in Maplewood."


      The Twins are just one of the properties the Pohlads own and they treat it as such. It is about the money, they invest money to make money. The issue is that many owners treat their team as a hobby. Many, many owners only want to win at the game because they have already won at business. However, this is the same ownership that was willing to contract the Twins because it was the best "business" move at the time. That really has to tell us that they value money more than the Twins.
      Two owners since 1961 and both were all about the money. Calvin because it was his sole source of income and the Pohlads because that is what they do, make money in any way they can weather it be jewerly, real estate, cars, popcorn or hot dogs.
      No spending more money doesn't guarantee a better team but it certainly doesn't hurt your chances on the field, however, it may hurt the chances of buying that next car dealership.
    1. Jim Crikket's Avatar
      Jim Crikket -
      Jeremy Guthrie just got $25 million over 3 years from the Royals. Getting pitching is going to be expensive, folks. It will take money. Obviously, nobody is knocking down Terry Ryan's door anxious to send good pitching to Minnesota in return for Denard Span.
    1. chagen's Avatar
      chagen -
      Quote Originally Posted by Bill Parker View Post
      Quote Originally Posted by chagen View Post
      The truth is if they really wanted to win they could open up there checkbooks just like the Tigers and we could at least be a playoff team.
      No, they couldn't. That kind of thinking is how decent teams become the late-1990s Orioles and Dodgers. There's a time when opening up the checkbook makes good sense (the Tigers now, the Twins three years ago), and a time when it doesn't (the Twins now, the Tigers a decade ago). There's no amount of money they could throw at this to help things in 2013.
      Bill last time i checked the Yankees are in the playoffs every year. Now they don't win the world series every year but there in the hunt Money Matters!
    1. chagen's Avatar
      chagen -
      Quote Originally Posted by Jim Crikket View Post
      Jeremy Guthrie just got $25 million over 3 years from the Royals. Getting pitching is going to be expensive, folks. It will take money. Obviously, nobody is knocking down Terry Ryan's door anxious to send good pitching to Minnesota in return for Denard Span.
      If you want quality starting pitching via free agency you have to overspend
      or you sit back do nothing and lose 90 plus games you decide
    1. nokomismod's Avatar
      nokomismod -
      Jim, thank you for stating this point. To me it's very simple. If the Twins do not spend an additional $20-40 million per year on starting pitching starting in 2013, they will see their revenues drop by at least that amount. They have to make smart decisions, but they can't wait to develop this talent from within.
    1. Bill Parker's Avatar
      Bill Parker -
      Brainwashing, Jim? Please. I have nothing against the current front office, but I can't say I've ever seriously listened to anything they've said publicly.

      It's just good baseball sense. Can you list some examples of teams that have lost ~200 games over the preceding two years, have tried to fix all their problems in the short term and with money, and have seen it go well? Because I can't think of any, but can think of quite a few counterexamples. When those teams get better, whether it takes one year or five, it's because they had young players develop and THEN, at a time when free agent adds could actually make a difference, have put up the money.

      The Twins currently have exactly three big-league quality pitchers: one who is a #4 starter on a good team in Diamond, and a short reliever from either side in Perkins and Burton. So they need at least three quality starters and two bullpen arms to turn this team around. Say they outbid every other team (read: overpay) for Greinke and two of Sanchez, Dempster, Lohse, McCarthy, Saunders, Marcum, Lewis and Kuroda. That'd be probably something like $30 million (at a minimum) for 2013, plus huge outlays going forward. You've still got a crap bullpen to deal with, so throw another $8 million or so at that, probably with commitments for 2014 as well. You've put together a rotation that could be pretty good, if Diamond repeats and everybody stays healthy, and a bullpen that might be pretty good (but they're inherently fickle and the free agent market for relievers is almost always a losing play), along with an offense that was a little below average in 2012 and doesn't have a lot of room to grow, and has a ton of injury/collapse risk.

      If it goes perfectly well, you may be spending something like $140 million next season on a team that's slightly above .500, which in the Central isn't too far from contention. If it doesn't, if one or more of the free agents is injured or suddenly gets old or Mauer, Span and/or Morneau are hurt again, not only have you thrown away a ton of money, but you've completely crippled the team going forward, for at least the next two years. At some point you do run out of payroll room, and spending a big chunk of it on a hope and prayer now makes a lot less sense than saving it to spend on a much better bet later.

      I don't care what the front office says -- and if his public comments are to be believed, it sounds to me like Ryan is trying to sign some pitching, which would concern me -- the plainly right thing to do is to sell off every asset that's worth more now than it will be two years from now, wait until some of the prospects who might contribute to the next good team are really ready to do so, and then open up the pocketbook. Or, then, roast them if they don't. Spending significant money right now, as has been shown time and again throughout the history of free agency in baseball, is just not a winning proposition.
    1. Bill Parker's Avatar
      Bill Parker -
      Quote Originally Posted by chagen View Post
      Bill last time i checked the Yankees are in the playoffs every year. Now they don't win the world series every year but there in the hunt Money Matters!
      Really, you want to spend Yankees money? I'm not sure you could do that in one year and field a playoff team (Matt Kory tried on Baseball Prospectus a week or two ago and it was so-so), but I was trying to retain some semblance of realism here. And even the Yankees, most years (not so much in 2012), have some pre-free-agency homegrown talent that helps out, more of it than the Twins currently have.
    1. chagen's Avatar
      chagen -
      Quote Originally Posted by Bill Parker View Post
      Quote Originally Posted by chagen View Post
      Bill last time i checked the Yankees are in the playoffs every year. Now they don't win the world series every year but there in the hunt Money Matters!
      Really, you want to spend Yankees money? I'm not sure you could do that in one year and field a playoff team (Matt Kory tried on Baseball Prospectus a week or two ago and it was so-so), but I was trying to retain some semblance of realism here. And even the Yankees, most years (not so much in 2012), have some pre-free-agency homegrown talent that helps out, more of it than the Twins currently have.
      I was just making the point that payroll matters i didn't say i wanted to spend yankees money i'll try and dumb it down for you next time Bill!
    1. Bill Parker's Avatar
      Bill Parker -
      Quote Originally Posted by chagen View Post
      I was just making the point that payroll matters i didn't say i wanted to spend yankees money i'll try and dumb it down for you next time Bill!
      Oh gee, would you? Thanks. This stuff is so hard for me.

      You made the point in response to me pointing out (and see it in more detail in response to Jim above) that payroll really doesn't matter to this team, right now. But the insult is appreciated anyway!
    1. JB_Iowa's Avatar
      JB_Iowa -
      Three things:

      1. It is NOT "overspending" for free agent pitching if you pay the going rate for acquisition of a free agent pitcher. It is paying "market value".

      2. I'm less hepped up on spending more and more hepped up on rebuilding. That being said, I am still looking for Terry Ryan to prove to me that he has the relationships with other GMs, the skills, and the guts to make successful and meaningful trades.

      3. Regardless of whether it is "opening up the checkbook" and trying to buy a better team for 2013 OR whether it is making trades to acquire starting additional starting pitching prospects to go along with a pretty nice core of upcoming Twins prospects, I just want the front office to pick a course and stick with it. I want to see them make a commitment to excellence (whether that is in 2013 or because they build for 2015) -- not more of this mediocre middling and being content to have just enough gas in the tank to win the Central. And commitment to excellence means starting pitching that is at least "very good".
    1. Bill Parker's Avatar
      Bill Parker -
      Quote Originally Posted by JB_Iowa View Post
      1. It is NOT "overspending" for free agent pitching if you pay the going rate for acquisition of a free agent pitcher. It is paying "market value"
      False. That's exactly the problem with trying to rebuild through free agency -- by definition, you're overpaying. If you land a free agent, you're paying more than all 29 other teams are willing to pay for that free agent. If that's "market value," something's really screwy with how you're defining the market.

      See also: http://en.wikipedia.org/wiki/Winner's_curse

      Math and stuff, but this is a pretty good read on bad teams signing free agents: http://www.baseballprospectus.com/ar...articleid=9869

      Totally agreed with your #3 (though the full-on rebuild is definitely the better course, IMO).
    1. Kwak's Avatar
      Kwak -
      It is true that high payroll doesn't assure success. It is also true that teams do have a spending limit and the exaples of other teams cited is most likely also true. The difference is that the Twins ownership publicly announce that money won't be a hindrance but few other teams make that statement when they really do have a limitation. The premise for the publicly financed new stadium (Target Field) was that it would permit the Twins to re-sign the top players on the team. The implication was that the rest of the team could and would be retained to ensure the same level of competitiveness. 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.
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