October 15, 2014

How much payroll space do the Twins have and will they actually spend it?

pohlad ryan st.peter

In the Twins' second season at Target Field their payroll rose to a franchise-record $113 million, but that dropped to $100 million the next year and then dipped below $90 million in each of the past two seasons as general manager Terry Ryan declined to spend a significant portion of the ownership-approved budget. Here's what Ryan said recently when asked about the team's lack of spending and self-imposed payroll decline:

Payroll will not be an issue. Our payroll is sufficient to [field] a winning team. There are playoff teams with lower payrolls than ours. We can't use that as an excuse. ... I spent plenty. Our payroll was pretty stiff, very respectable.

The payroll Ryan calls "pretty stiff" ranked 24th among 30 teams and, based on comments from Ryan and Twins president Dave St. Peter, will almost surely rank even lower in 2015. He's right that the Twins' payroll was enough to field a winning team, but suggesting their payroll should be low because "there are playoff teams with lower payrolls than ours" is like suggesting they should hit fewer home runs because "there are playoff teams with fewer home runs than us."

This season MLB teams that spent more than $100 million made the playoffs 47 percent of the time, while teams that spent less than $100 million made the playoffs 20 percent of the time. All six division-winning teams spent at least $105 million and the average payroll of the six division winners was $147 million. When asked about next year's payroll, St. Peter told Phil Miller of the Minneapolis Star Tribune:

We haven't finalized a 2015 budget, [but] I can assure you, we don't see it going down significantly.

So this is where the Twins are at heading into the sixth season of a publicly funded ballpark that was supposed to boost their spending relative to the other 29 teams: "Assuring" their fans who're frustrated and disillusioned following a fourth consecutive 90-loss season that the team's already below-average payroll won't be "going down significantly" at a time when television and internet revenue is skyrocketing across baseball.

More than half of MLB teams exceeded $100 million in payroll this year, including 10 teams above $125 million and two teams above $200 million. After dumping various high-salaried veterans in trades, the Twins ended up spending around $86 million on payroll. St. Peter's comments certainly make it seem likely that their 2015 payroll will once again be below $90 million, which won't leave much room for offseason spending thanks to the following players being under contract:

Joe Mauer          $23.0 million
Ricky Nolasco      $12.0 million
Phil Hughes         $8.0 million
Kurt Suzuki         $6.0 million
Mike Pelfrey        $5.5 million
Glen Perkins        $4.7 million

TOTAL              $59.2 million

Beyond those guaranteed salaries, the Twins also have these players eligible for arbitration:

Trevor Plouffe      $4.3 million
Tommy Milone        $2.8 million
Brian Duensing      $2.5 million
Jordan Schafer      $1.5 million
Anthony Swarzak     $1.4 million
Eduardo Nunez       $1.2 million
Casey Fien          $1.1 million

TOTAL              $14.8 million

Those salaries listed above are MLB Trade Rumors' arbitration projections. At least a few of those arbitration-eligible players should be non-tender candidates, so the Twins could cut them loose at no cost. But if they were to retain all seven arbitration-eligible players their payroll commitments would approach $74 million. Toss in the $7 million or so required to fill out the rest of the roster with minimum-salaried players and the Twins would already be over $80 million.

Front office mistakes led to losing teams, which led to attendance declining, which led to revenue decreasing, which led to payroll dropping. In their final season at the Metrodome they spent $65 million. Six years and one new ballpark later their payroll has settled around $85 million. Whether or not you think spending drives winning, unspent money isn't set aside for future payroll and it's hard to see how that money simply staying with the Twins' owners benefits the team or its fans.


For a lengthy discussion of how preseason expectations translated to regular season success this year, check out this week's "Gleeman and The Geek" episode.

  • Rob Dirks

    This needs to be shared. This was from the Twins themselves when pushing for a new park: http://minnesota.twins.mlb.com/min/ballpark/new_banter.jsp?content=qa

    So many lies about fielding a competitive team, keeping core players on roster, how revenue in Dome was only 25 out of 30 teams (but now payroll is essentially on par with that).

    Please broadcast these lies.

  • pkiguy22

    I’m ok with spending more, but the problem is that of the top 6 salaries, 2 guys earned it last year. Of the others, here is Mauer obviously, but Pelfrey and Nolasco are huge red flags that the FO doesn’t know HOW to spend what little money they do have. I’d almost hope they don’t go after anyone because it’s a 50/50 shot they would spend it wisely. Might as well wait until after we start to win with some of the guys coming up this year and then see where we need help.

    • Jacob

      take the unspent money earmarked for payroll and invest in a big time IFA like the White Sox did with Abreu

      • Nate

        Or Tsuyoshi Nishioka. Those IFA’s are sure things!

        • Dateless Nerd

          If a team spends poorly in Free Agency, it’s not the money’s fault. It’s the GM’s fault.

    • broken-hearted, but moving on

      If only half your free agents pan out, that doesn’t mean you don’t hire free agents. It means you hire twice as many as you need.

      That’s just how it works. Same as having extra players in case of injury. You can’t just say, I already hired a pitcher! You can’t expect me to hire another pitcher!

      And why not? The alternative is they just pocket the money.

      And make no mistake, they are pocketing our money. They promised to spend half their revenue on payroll. They did not.

      (That deal always seemed shady anyway: if we invest hundreds of millions in public money in their business, they will only steal half of it! Yay! But they’re not even doing that!)

      They are not spending even half of their publicly subsidized income on the team.

      Last year they even got another $25 million in TV money. How much of that went into payroll? None. Oh, they boasted a lot about their big-ticket free agents Nolasco, Hughes, and Pelfrey. But in reality, spending didn’t go up at all, that was all money from expiring contracts. The deal was, we get $25 million, we only pocket half. They pocketed it all.

      This should come as no surprise. It wasn’t to the voters who passed a referendum banning public money going to stadiums without permission. Publicly funded stadiums are just extortion rackets, ultimately. (Nice team you got here, I’d hate for something to happen to it.) The whole deal, stank from day one. They told the state, we’ll do it all with local money, it won’t cost the rest of the state a cent, if you exempt us from our legal requirement to let the taxpayers we’re fleecing vote on it.

      I’ve had it with this outfit. I’m tired of being jerked around and taken for granted.

      I’m going to start seeing other teams.

  • Rob

    Both Miller’s Star Trib column and this column equate lower attendance to lower revenue for the Twins- thus less money to allocate toward player salaries. However, remember that the MLB’s new national TV deal kicked in this season, and provides another $25 mil in revenue to each team. This money was not there for the Twins in 2010-2013. So frankly, with national TV money alone (not counting any revenue increases from increased licensing payments, All Star Game revenue, local FSN TV payments), the Twins should have addional cash to spend on players. We’ll see if the Twins can find more Hughes-types, less Nolascos.

    • pkiguy22

      Rob you are a smart guy. Do you really think the average fan knows this? The sad part is that the average Twins fan is used to having cheap owners and tight purse strings. The idea of “Waiting for the prospects” is so ingrained in us that we just accept it and keep waiting for next year.

    • Ryan

      Right, the 20 million dollar difference between the Dome and Target Field is completely wiped out by the gains in revenue sharing and TV contracts over the past 6 years.

      Obviously the Twins aren’t going to open their books, but I have to imagine they’re actually spending less money and just pocketing more than they were at the end of the Dome.

    • kenbuddha

      Just in TV money, the Twins are bringing in about $79M/season.
      $29M from FSN and $50M from the national TV contract.
      I think that alone is worthy of mention. They almost pay their entire payroll just with TV cash.

  • Sean Olsen

    The Twins philosophy serves — barring breakout performances — as a one-way ratchet on payroll. The team performs worse than expected, attendance and revenue drop, and payroll is cut accordingly. The team continue to perform poorly, revenue continues to drop, and payroll is cut accordingly. The only way to break the cycle is to have the cheap youngsters overperform.

  • J.S.

    This is exactly why I didn’t like Ryan coming back.

  • Nate

    Here’s some facts:

    1) Ryan said our payroll isn’t the reason we’re losing, and never has he said that payroll can’t increase. In fact, he’s made comments alluding to spending this off season.

    2) St. Peter said their budget was not going to decrease, and that the budget for payroll will remain at 50-52% of revenue. and that they don’t forsee a large dip in revenue. Now the thing about a budget, is you don’t always spend all of it. The Twins had significant offers to free agents (over 30 million in 4 offers, though 2 of them were duplicate positions), offers that were refused by the players, not the team. They had offers that would have pushed their payroll well over 100 million, in their attempt to realize their budget, but were unable to do so.

    • grumpy gus

      “remain” at 50-52% of payroll? It’s not that now! And revenue keeps going up. Yet they say it won’t go down much.

      You make a good point that it’s not impossible they’ll pay more, and it may have been possible they’d have gone higher this year if some more offers were accepted.

      But your more compelling point was that spending can also go under budget. Which do you think is more likely? Honestly?

      What they need to do is clear: raise payroll by at least $25 million, immediately. $25 million would put them around average in payroll — right where it should be, with a new stadium and all that TV money.

      Put two top of the line starters on this team and it’s competitive right now. They got their subsidy. Why aren’t they holding up their end of hte bargain? Why aren’t they going after someone who could actually make a difference, like Scherzer? No reason I can see, except of course the obvious: they’d rather keep the money themselves. That stadium was a rip off. If they want to keep all the money it brings in, they should have paid for it themselves.

      With mlb.com, we can root for anyone we want now. I don’t need to go to the stadium to buy Goose Island. And I can buy a whole six pack for the price of one there. It’s out doors now? I get the same sunlight at my house for free. To hell with them.

      Let’s Go, Royals!

      “We don’t see it going down significantly.” Un-freaking-believable.

      • Nate

        I agree that ideally, payroll needs to raise, but you have to understand the realities of free agency and player preference in choosing where they want to play. Very rarely will top talent choose a team that’s rebuilding over a team that’s contending, unless there’s significant overpaying going on, and that can be very risky. What if we signed James Shields to an 85 million dollar contract, and he flopped like Nolasco? I’m not saying that is likely, or that it should deter you from making a calculated risk, but it has to be calculated. Overpaying players just for the sake of bringing payroll up to budget is a surefire way to handcuff your organization for years to come.

        • kenbuddha

          It isn’t overpaying just for the sake of bringing payroll up (show me where someone/anyone advocates that). It’s overpaying to make the team better. With all team revenues going up, the price for free agents has gone up and the Twins need to realize that. The Twins made strides last year to make the team better via free agency, but the reality is their payroll was almost exactly what it was before. Was their record significantly better? Nope.

          I do think Nolasco will be better next season, but what’s the harm in going after a James Shields type? They have the cash to sign him. Ace pitchers don’t block anyone (that’s the job of Pelfrey and his ilk). Spending cash to add top quality shouldn’t be frowned upon. Especially when you keep putting more and more cash in your pocket every year as the quality of your product slides into the crapper.

        • CashMan

          Nate,

          You are one of the marks. It’s like shooting fish in a barrel in this town for owners who want a quick buck. Congratulations to you!