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  1. #81
    Quote Originally Posted by TheLeviathan View Post
    All of that's fine and good, but there is also a delicate balance in mid-markets (which, we're on the upper end of, not the lower end as you seem to be implying) in maintaining the fanbase. At this point, the Twins are risking losing fanbase support if they continue to rake in TF revenues and not do more to improve the team going forward. No one disagrees the Twins need to be cost conscious - all teams do to varying degrees - but there are real costs to doing nothing as well. At this point, if there are significant risks doing too much and there are significant risks to doing nothing - I don't think there should be any disagreement about which side we're far too close to. It'd be nice to see SOME risk taken.
    I am not implying that the Twins position among mid market teams matters. There are other financial factors that have more influence than the Twins specific revenue rank.

    1. There is $40-50M delta between the Twins and the lowest revenue teams in the entire league. The difference between the Twins and the next 8 teams below them is less than $20. How many of those teams have resigned their star player to a $23M/yr contract. Are those teams signing the 5+ year 75-100M FA? The one team that has taken on some of these contracts is Toronto. They went for the quick fix. How did that turn out?
    2. There is a $250M differential between the Twins and the Yankees/Dodgers. Two teams are not enough to completely shape how the Twins and other similar teams spend. However, when the Dodgers or Yankees decide they want Sabathia, Grienke or Tanaka, the problem is not a cheap FO, it’s a very unrealistic fan base.
    3. The top 10 teams all have 20M+ more revenue than the Twins but that is not in itself tremendously impactful. It is the aggregate incremental revenue of the top 10 that has the most impact on free agency and how lower revenue teams have to construct a roster. After those ten teams spend an amount equal to the Twins revenue, they have another $700M in revenue. If you have had economics 101, it is really easy to figure the top free agents are going to consumed with that $700 most of the time.

  2. #82
    Twins Moderator MVP USAFChief's Avatar
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    As it turns out, I have had Econ 101 (I do admit it was a few yrs ago) and from what I remember, the important "delta" here seems to be revenue to expense, not revenue compared to competition.

    And that "delta" seems to indicate any argument against signing free agents based on revenue would have earned me a failing grade from my Econ 101 professor.
    Every post is not every other post. - a wise man

  3. #83
    Quote Originally Posted by USAFChief View Post
    As it turns out, I have had Econ 101 (I do admit it was a few yrs ago) and from what I remember, the important "delta" here seems to be revenue to expense, not revenue compared to competition.

    And that "delta" seems to indicate any argument against signing free agents based on revenue would have earned me a failing grade from my Econ 101 professor.
    You remember wrong. Revenue to expense ratio is a measure of efficiency which has very little to do with any of the points made earlier. The premise of all of the points was incremental dollars available to spend on Salary. That number is not and never would be published so I used revenue. We would have to have full access to team financial records to have the actual number which is much more a product of variable expense. In other words, how much of the additional $700M goes to expense and what would be available to salary.

    On the surface, you would assume that the teams with a decided revenue advantage would have an even higher percentage of total revenue available for salary or profit based on variable cost. Forbes numbers suggest there is variable cost or the additional is being paid to team owners. What variable costs do teams have? I am sure there are some expenses I am not aware of but any significant cost that would go up as revenue increases other than taxes if they don’t spend the money on players is not obvious without access to financials. What about fixed expense? Rent and salaries are obviously higher in NY or LA but this really a minor component of total expenses. Do the top teams spend significantly more on scouts, their minor league system, advertising, etc? Yet, when you look at Forbes, the ratios all look fairly similar. So, I am not sure what portion of the incremental $700M/yr is available for payroll.

    We can test this theory by looking at the 48% the Twins target for all non-player expense.
    $215M * .48 = $103.2M The Yankees have revenue of $479M. I am sure they have more cost than the Twins but are their non-player expenses really $229.9M? We could also ask what variable expense is associated with the new TV revenue.

  4. #84
    Twins News Team All-Star TheLeviathan's Avatar
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    Quote Originally Posted by Major Leauge Ready View Post
    If you have had economics 101, it is really easy to figure the top free agents are going to consumed with that $700 most of the time.
    Well, the funny part is you decided to take a dig like this while entirely missing the point of what you quoted. Can a fanbase be unrealistic? Sure. It can also become apathetic when it sees tens of millions of dollars being raked in in revenues for a subsidized stadium while fielding a god awful team. My post was stating the need for mid-markets to remember that their bread is often buttered not by media contracts, but by attendance.

    If the Twins are wise they'll realize that a significant investment, even a bad one, may end up being more profitable in the long run because it will keep fans engaged and less apt to grab pitchforks and torches about management.

    More nothing has a much higher likelihood of harming revenues long term than a fixed cost contract (even one to a flop of a player) IMO.

  5. #85
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    So we agree, they have something like $120MM to spend on payroll if htey spend the mythical 52%. We also know what the current payroll is. We also know what commitments they have, and will likely have, to current players. Not sure how we can look at that gap (which will be more than half of their available payroll), and conclude that there is significant risk in spending money on free agents.

    Either the $40-60MM is pocketed, or it is spent. On three year deals, not one person on this roster needs a real rasie, and they lose Willy and Doumy in that time frame. heck, on 5 year deals I can't see a guy that needs a real raise. Not to mention it is likely revenue will go up, not down, over time.

    It isn't a question of "can they spend as much as other teams". It is a question of "can they afford to spend more, and still have room to add other guys later". Not sure how that answer is anything but yes.
    Lighten up Francis....

  6. #86

  7. #87
    Quote Originally Posted by TheLeviathan View Post
    Well, the funny part is you decided to take a dig like this while entirely missing the point of what you quoted. Can a fanbase be unrealistic? Sure. It can also become apathetic when it sees tens of millions of dollars being raked in in revenues for a subsidized stadium while fielding a god awful team. My post was stating the need for mid-markets to remember that their bread is often buttered not by media contracts, but by attendance.

    If the Twins are wise they'll realize that a significant investment, even a bad one, may end up being more profitable in the long run because it will keep fans engaged and less apt to grab pitchforks and torches about management.

    More nothing has a much higher likelihood of harming revenues long term than a fixed cost contract (even one to a flop of a player) IMO.
    Fans will show up if they win. Therefore, the best spending policies are those that promote this highest probability of putting a winning team on the field.

    We also should not complain about inability to win in the post season and then suggest they should appease the fans. Giving up draft picks or trading good prospects diminish the future for the sake a putting an average team on the field now. The odds of any of the trades an acqusitions suggested producing a team that can beat Detroit are remote. And they get even more remote if the goal is to go on and beat the Red Sox / Rangers / Athletics, and extremely remote to then beat the Dodgers or Cardinals.

  8. #88
    Twins Moderator MVP USAFChief's Avatar
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    Quote Originally Posted by Major Leauge Ready View Post
    You remember wrong. Revenue to expense ratio is a measure of efficiency which has very little to do with any of the points made earlier. The premise of all of the points was incremental dollars available to spend on Salary. That number is not and never would be published so I used revenue. We would have to have full access to team financial records to have the actual number which is much more a product of variable expense. In other words, how much of the additional $700M goes to expense and what would be available to salary.

    On the surface, you would assume that the teams with a decided revenue advantage would have an even higher percentage of total revenue available for salary or profit based on variable cost. Forbes numbers suggest there is variable cost or the additional is being paid to team owners. What variable costs do teams have? I am sure there are some expenses I am not aware of but any significant cost that would go up as revenue increases other than taxes if they don’t spend the money on players is not obvious without access to financials. What about fixed expense? Rent and salaries are obviously higher in NY or LA but this really a minor component of total expenses. Do the top teams spend significantly more on scouts, their minor league system, advertising, etc? Yet, when you look at Forbes, the ratios all look fairly similar. So, I am not sure what portion of the incremental $700M/yr is available for payroll.

    We can test this theory by looking at the 48% the Twins target for all non-player expense.
    $215M * .48 = $103.2M The Yankees have revenue of $479M. I am sure they have more cost than the Twins but are their non-player expenses really $229.9M? We could also ask what variable expense is associated with the new TV revenue.
    Or we could just ask why the team doesn't honor the public statements they've made regarding player salaries as a percentage of revenues.
    Every post is not every other post. - a wise man

  9. #89
    Quote Originally Posted by USAFChief View Post
    Or we could just ask why the team doesn't honor the public statements they've made regarding player salaries as a percentage of revenues.
    Completely different topic. We were discussing the economic and finacial implications of the market. So, when you realize you don't really understand it, you go back to but you promised. Never mind what is smart. You promised me a shiny new FA.

  10. #90
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    Quote Originally Posted by Major Leauge Ready View Post
    Are those teams signing the 5+ year 75-100M FA? The one team that has taken on some of these contracts is Toronto. They went for the quick fix. How did that turn out?
    Why are we using $75 million as the benchmark? The Twins aren't just conservative on those -- in fact, I doubt they've ever even considered or made such an offer. They've never topped $21 million total / $7 mil AAV for an outside free agent ($10 million total / $5 mil AAV for pitchers). I'd be delighted if they simply topped those numbers and got some quality assets for it this offseason.

    If you include Asian/Cuban free agent signings, only two franchises (Pittsburgh and San Diego) have historically given less to their biggest outside free agent signing, although Pittsburgh's actually had a higher AAV (Russell Martin).

    Pittsburgh also traded for Wandy Rodriguez and picked up a higher AAV on his remaining deal than the Twins ever have, and San Diego extended Carlos Quentin to a deal even greater than Willingham's (both total and AAV) months after trading for him.

    The Astros and Marlins are cheaper at the moment, but historically, overall, the Twins are probably the most conservative at handing out ANY outside free agent money, much less $75 million.

  11. #91
    Twins News Team All-Star TheLeviathan's Avatar
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    Quote Originally Posted by Major Leauge Ready View Post
    Fans will show up if they win. Therefore, the best spending policies are those that promote this highest probability of putting a winning team on the field.

    We also should not complain about inability to win in the post season and then suggest they should appease the fans. Giving up draft picks or trading good prospects diminish the future for the sake a putting an average team on the field now. The odds of any of the trades an acqusitions suggested producing a team that can beat Detroit are remote. And they get even more remote if the goal is to go on and beat the Red Sox / Rangers / Athletics, and extremely remote to then beat the Dodgers or Cardinals.
    For all the bluster you are still missing the point. Yes, fans will show for wins. But in the meantime the ticket purchasing dwindles, which hits revenues hard, which drops payroll, which makes supplementing or retaining players in the future more difficult, which makes sustaining a winning team more difficult.

    investment in FA now is an investment in maintaining future revenues. No one is talking trades or band aids, that's a scarecrow tht has been pointed out several times already.

  12. #92
    Quote Originally Posted by spycake View Post
    Why are we using $75 million as the benchmark? The Twins aren't just conservative on those -- in fact, I doubt they've ever even considered or made such an offer. They've never topped $21 million total / $7 mil AAV for an outside free agent ($10 million total / $5 mil AAV for pitchers). I'd be delighted if they simply topped those numbers and got some quality assets for it this offseason.

    If you include Asian/Cuban free agent signings, only two franchises (Pittsburgh and San Diego) have historically given less to their biggest outside free agent signing, although Pittsburgh's actually had a higher AAV (Russell Martin).

    Pittsburgh also traded for Wandy Rodriguez and picked up a higher AAV on his remaining deal than the Twins ever have, and San Diego extended Carlos Quentin to a deal even greater than Willingham's (both total and AAV) months after trading for him.

    The Astros and Marlins are cheaper at the moment, but historically, overall, the Twins are probably the most conservative at handing out ANY outside free agent money, much less $75 million.
    You have a point. As a matter of fact, I agree and have advocated signing some players that will cost nearly twice as much as the Willingham contract. However, we should keep in mind that it was not long ago the Twins were among the lowest revenue teams. You can't compare their current spending ability historically. Let's see what they do this year.
    Last edited by Major Leauge Ready; 11-08-2013 at 11:54 AM.

  13. #93
    Twins Moderator MVP Riverbrian's Avatar
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    I really wish that 50-52 percent figure wouldn't have been put out to the public.

    I like the thought of fluid payroll. Meaning higher payroll when we have players worth retaining and lower payroll when we don't.

    I want payroll to reflect the context of the team and not some 50-52 percent thing.

    With that said... I continue to not care much about the actual payroll number. I only care about players who play to win and do. Those players come at a wide range of salaries and we don't have enough of them right now... obviously.
    A Skeleton walks into a bar and says... "Give me a beer... And a mop".

  14. #94
    Senior Member All-Star JB_Iowa's Avatar
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    Quote Originally Posted by Riverbrian View Post
    I really wish that 50-52 percent figure wouldn't have been put out to the public.

    I like the thought of fluid payroll. Meaning higher payroll when we have players worth retaining and lower payroll when we don't.

    I want payroll to reflect the context of the team and not some 50-52 percent thing.

    With that said... I continue to not care much about the actual payroll number. I only care about players who play to win and do. Those players come at a wide range of salaries and we don't have enough of them right now... obviously.
    I like the idea of a fluid payroll, too ... but ONLY if it means that it is fluid both ABOVE and BELOW the 50%-52% mark.

    There are times when a team has all young players and the payroll should be less. But there are also times when many players are more mature in their careers and payroll should be more and where exceeding the 52% mark, even by a substantial margin, to bring in a player or two to "put them over the top" would seem rational.

    I just haven't seen any evidence that the Twins are willing to do this. So, if they are going to say 50%-52%, I want to see them using it to put the best product they can on the field.

  15. #95
    Senior Member Triple-A goulik's Avatar
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    I am confident without looking at numbers that the Twins current 52% has ever been nearly this far above current payroll. This means TR is in unprecedented territory as far as how much money he has to spend. I also believe from quotes I have read that the Pohlads will be upset if he does not spend significantly more than on last years FA market. How do we prejudge what someone will do when put in a completely different place than ever before? I am confident Willingham's record contract will go down in flames this offseason, but for who and how many guys?
    If that doesn't happen, attendance will plummet and so will profits. I am also convinced "they" have had Econ 101,201,301,and 401! They have to spend. We know it but more importantly, they know it.

  16. #96
    Twins Moderator MVP Riverbrian's Avatar
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    I have a question and I don't know the answer.

    I'm not saying collusion... So... Let's phrase it this way... Does anyone believe there is a professional responsibility to not overpay rediculous amounts on players.

    Is it possible that if the Twins or any team... Out of desperation... offers Hughes for example... 7 years 150 million... If they hypothetically did that. Would that cause a problem with the rest of the league owners because of what it would do to the salary scale overall. The prices for the rest of the free agent class... Arb cases... All of it.

    Yes... I understand this is collusion at its core... But... Is it possible that... This is a factor in all, most or a few teams negotiations? It would certainly be in ownership for all teams best interest to not have a loose cannon out there.
    A Skeleton walks into a bar and says... "Give me a beer... And a mop".

  17. #97
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    And yet, when Andy McPhail was the GM, he signed players to some of the largest contracts in the majors, even with those low revenues.
    Lighten up Francis....

  18. #98
    Twins Moderator MVP Riverbrian's Avatar
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    Quote Originally Posted by JB_Iowa View Post
    I like the idea of a fluid payroll, too ... but ONLY if it means that it is fluid both ABOVE and BELOW the 50%-52% mark.

    There are times when a team has all young players and the payroll should be less. But there are also times when many players are more mature in their careers and payroll should be more and where exceeding the 52% mark, even by a substantial margin, to bring in a player or two to "put them over the top" would seem rational.

    I just haven't seen any evidence that the Twins are willing to do this. So, if they are going to say 50%-52%, I want to see them using it to put the best product they can on the field.
    Me 2... I do hope that the day will come that the Twins will have to exceed that 52% figure for a year or two to retain top talent. I hope they have to and they do.

    My Problem right now...is that I don't see many players on the roster currently worth spending big money on and I don't see many Free Agents this year worth spending big money on.

    It's why... Payroll just isn't an issue with me... At this moment in time.
    A Skeleton walks into a bar and says... "Give me a beer... And a mop".

  19. #99
    Quote Originally Posted by Riverbrian View Post
    I really wish that 50-52 percent figure wouldn't have been put out to the public.

    I like the thought of fluid payroll. Meaning higher payroll when we have players worth retaining and lower payroll when we don't.

    I want payroll to reflect the context of the team and not some 50-52 percent thing.

    With that said... I continue to not care much about the actual payroll number. I only care about players who play to win and do. Those players come at a wide range of salaries and we don't have enough of them right now... obviously.
    It is going to take a few years before we will be in a position to exceed the 52% budget for a final piece or two but I could not agree more on spending when we can pinpoint the right final pieces. That might also include trading some of our prospects much like KC did with Shields. Of course, this is not a new concept. Detroit has been in that mode for the last 3 years. I sure hope our core develops and we are in that position by 2017.

  20. #100
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    Quote Originally Posted by Major Leauge Ready View Post
    It is going to take a few years before we will be in a position to exceed the 52% budget for a final piece or two but I could not agree more on spending when we can pinpoint the right final pieces. That might also include trading some of our prospects much like KC did with Shields. Of course, this is not a new concept. Detroit has been in that mode for the last 3 years. I sure hope our core develops and we are in that position by 2017.
    Funny, the taxpayers purportedly built TF just so we wouldn't have to wait 4 MORE years.

    7 years without a serious attempt before then at fielding a competitive team, coupled with no attempt to put in the "final pieces" along the way? Things have changed for this team- it holds a potential near-future value in excess of $1Billion...and produced $215M in revenue even in the midst of yet another dismal lost season. There is absolutely no overhanging financial reason to hold off on "putting the final pieces" in place until the 2017 offseason. There is virtually no risk at attempting to field competitive teams in 2014, '15, '16 by acquiring both long and short-term assets via FA- flipping, non-tendering, QOFing and/or extending them, as each individual merits in the long-term plan, case-by-case.
    Last edited by Riverbrian; 11-09-2013 at 12:47 AM. Reason: One line was taken out by me. Personal shot.

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