Thanks to everyone for all the great comments on Thursday and Friday. This declining payroll issue still isn't getting the attention I think it deserves, but I guess that's not overly surprising. While ranting about payroll plays well in public (and we have our share of that in the comments), it's difficult to talk about the details on the radio or on TV without people's eyes glazing over. But while risking that, I want to make a point that I feel I didn't hammer enough:
This time it is different.
A sect of Twins fans has always been outraged by the Twins "never getting a big free agent" or "Carl not spending any of his billions", but for those that were paying attention to salaries and payroll levels, the moves often made sense. Given a slightly escalating payroll that matched the rise in MLB revenues, one could understand (and even applaud) moves like trading Eric Milton, while they might have been criticized by others.
But this is different. As was explored and detailed so well by comments, there is almost no reasonable explanation for a lower payroll level over the last couple of years. Casual fans likely view this offseason the way they viewed other offseasons. But for the payroll geeks, this offseason (and last one, for that matter) represent an enormous opportunity lost.
I'm not sure how to best represent that difference to the greater majority of Twins Territory, but I think we had better continue to talk about it, because it shouldn't get lost in the shuffle. Or among the grander more traditional (and caustic) rhetoric.
In that spirit, let's dive into some of the other issues that were raised in the comments:
The Twins have tons of cheap talent, particularly pitching, that is too valuable to part with.
Agreed, but most of that value isn't because it is irreplacable. It is because it is cheap. And that is only of value if you use the money that is saved to upgrade the team. Can we be proud that the Twins have done such a nice job of developing a competetive team for so little? Sure. But you don't fly any flags for the most wins per dollar spent.
If you like, you can attribute the $30 million they are under budget to the five pitchers who they are paying half a million dollars instead of $6.5 million, which would be a much more reasonable figure (and probably low) given their performance. But if you don't spend that $30 million on something else, does it really matter whether those guys each cost $.5M or $6.5M?
Not to the fans. The only person it matters to is the guy who keeps the $30M.
This isn't how the Twins do things. They build their organization from within.
Hey, anyone who follows this site knows that philosophy is one of the better reasons to follow this team obsessively. Nobody is saying this isn't a key skill for a lower-revenue team like the Twins. And this site has pimped young minor league talent more than most fans would find palatable.
But it's unreasonable to think that every piece for a championship team is going to be able to be provided from a farm system. The Twins face enough disadvantages due to their ballpark and revenue stream - they don't need to avoid free agency even when they have the money to spend.
In fact, I would argue that the Twins do a disservice to their other skills when they waste an opportunity like this. It's like hitting a lead-off triple in extra innings, only to have the next three batters fail to get the run home. The hard part - developing an abundance of major league caliber players through years of investement - is done. Now you just have to put the ball in play. The players are there. The money is there. Do the little things to get this run home, dammit.
The skeptic view - they're pocketing money for the stadium, just in case.
When I wrote about this same subject last year, this was brought up, and I more or less dismissed it. I wasn't as critical last year because the truth is that the timing for spending that money was tough. The biggest reason they were under payroll last year was because they needed to have money available in case they didn't trade Johan Santana. And since they traded him so late in the offseason, there just wasn't much to spend money on.
No such excuse is available this year. They have had that money all offseason. They have watched free agent after free agent sign deals that would have been unthinkably cheap just four months ago. Letting any one of those pieces go is understandable. Letting them all go looks criminal.
What they really need to do is take that money and spend it on long-term contracts.
Long-term contracts don't work that way. In the NFL, you might sign players to a big signing bonus and give them money up front. That's necessary because in football the team can cut the player (and the contract) at any time.
But in baseball, the contract is guaranteed, so it doesn't matter much whether you give up front money - it just pays down future years minimally. For instance, last year's signing bonus for Justin Morneau just means that the latter years of his contract are cheaper by a million dollars or so per year. That's not going to make much difference to a $90 million payroll. It's not a bad strategy if you find yourself with leftover money (like the Twins had last year) but it's not a strategy you use if you could improve your team.
Should we really expect increased revenue given the economy?
I think the comments answered this question pretty well all by itself as the revenue sources for the Twins were each examined. I really appreciate these comments, by the way. For seven years I've been meaning to do a thorough examination (with estimates) of the various revenue sources for the Twins, and I've never come close. But my sense is that the ticket revenue is only a very small part, and that many of the revenue sources are quite resistant.
The $20-30 million that the Twins are short represent somewhere between 25% and 33% of their total payroll, and since they claim payroll is a percentage of their total revenue, that would imply they expect revenue to fall 25-33% short this year. There is no way that is the case considering how much of the revenue is from previously negotiated TV and media contracts.
As Opening Day approaches, we'll be able to see the payroll level for the rest of the teams, and then we'll be able to see if MLB thinks revenues are going to be going up or down this year. It looks to me like for MLB as a whole, they're (at worst) holding steady. And there is certainly no reason to expect the Twins, with their new ballpark on the way, to be suffering more than the average MLB team.
BTW, for anyone who wants to dive into the Twins revenue streams in detail, I'll be happy to help. Or if someone knows anyplace that has taken a legitimate stab at this for any major league team, I'd love to see it.
Maybe they're just preparing for future years? Won't all these guys become expensive soon?
Remarkably enough, I examined this before I started going all crazy and writing last Thursday's post. Payroll does escalate significantly in 2010, but (in my mind) not so significantly that significant dollars couldn't be spent this offseason. It jumps about $20 million in 2010, and about another $10 million in 2011 by my back-of-the-napkin calculations. For those who like to dissect this stuff, I've added the details to the right ==>
Could they just roll the money they didn't spend this year into future years?
I examined this question back in 2000 when they cut the payroll back to about $15 million and pocketed that revenue sharing money. I hoped the same thing back then, and it didn't happen, and it turns out there is a very good reason it doesn't.
A business can't save money like you and I do. If we have money leftover at the end of the year, we can just throw it into an investment vehicle, becdause the money has already been taxed. But for a business, any money they have leftover at the end of the year is income that has not yet been taxed. And if it is spent on the business, it is never taxed, because it's just part of the operating expenses.
But if it is NOT spent, it's profit, and it's taxed. So the remaining money could be 'saved', but only after Uncle Sam gets his cut.
So the Twins have the option of either spending that $30 million this year, or carrying over about $20 million to next year (with the IRS and MN Dept of Revenue getting the other $10M). Even if they did keep that money in house instead of distribute it, does anyone believe that $20 million next year is going to buy a better group of free agents next year than $30 million is going to buy this year?
So what's left? Why aren't they meeting payroll?
I'll be honest - I'm still not sure the Twins are intentionally trying to pocket payroll. It might be a logical result of feeling like this team is "good enough" (a question I mean to examine), or being really afraid of any kind of long-term deal, or truly convinced that they don't want to mess with this team much. I am sure, at least, that they will claim as much.
That sounds staid, and it sounds staid at exactly the wrong time. When a team is on the verge of becoming great, that's when a little boldness is called for. But the bigger problem is that they could be wrong. By sitting on their hands, they might doom themselves to be a second place team to the Indians or Tigers this year, or to the Royals or White Sox in future years.
So it could be greed, but maybe just as deadly, it could be timidity. After last offseason's dice rolls(like Young for Garza), many of which crapped out, we probably shouldn't be surprised that the organization is acting awfully conservative. But the surest path to failure is to fail to ever take a risk.
And for fans, the motivation doesn't really matter. Either way, this team is not being improved, and we're watching available resources languish unused.
This time it is different.
A sect of Twins fans has always been outraged by the Twins "never getting a big free agent" or "Carl not spending any of his billions", but for those that were paying attention to salaries and payroll levels, the moves often made sense. Given a slightly escalating payroll that matched the rise in MLB revenues, one could understand (and even applaud) moves like trading Eric Milton, while they might have been criticized by others.
But this is different. As was explored and detailed so well by comments, there is almost no reasonable explanation for a lower payroll level over the last couple of years. Casual fans likely view this offseason the way they viewed other offseasons. But for the payroll geeks, this offseason (and last one, for that matter) represent an enormous opportunity lost.
I'm not sure how to best represent that difference to the greater majority of Twins Territory, but I think we had better continue to talk about it, because it shouldn't get lost in the shuffle. Or among the grander more traditional (and caustic) rhetoric.
In that spirit, let's dive into some of the other issues that were raised in the comments:
The Twins have tons of cheap talent, particularly pitching, that is too valuable to part with.
Agreed, but most of that value isn't because it is irreplacable. It is because it is cheap. And that is only of value if you use the money that is saved to upgrade the team. Can we be proud that the Twins have done such a nice job of developing a competetive team for so little? Sure. But you don't fly any flags for the most wins per dollar spent.
If you like, you can attribute the $30 million they are under budget to the five pitchers who they are paying half a million dollars instead of $6.5 million, which would be a much more reasonable figure (and probably low) given their performance. But if you don't spend that $30 million on something else, does it really matter whether those guys each cost $.5M or $6.5M?
Not to the fans. The only person it matters to is the guy who keeps the $30M.
This isn't how the Twins do things. They build their organization from within.
Hey, anyone who follows this site knows that philosophy is one of the better reasons to follow this team obsessively. Nobody is saying this isn't a key skill for a lower-revenue team like the Twins. And this site has pimped young minor league talent more than most fans would find palatable.
But it's unreasonable to think that every piece for a championship team is going to be able to be provided from a farm system. The Twins face enough disadvantages due to their ballpark and revenue stream - they don't need to avoid free agency even when they have the money to spend.
In fact, I would argue that the Twins do a disservice to their other skills when they waste an opportunity like this. It's like hitting a lead-off triple in extra innings, only to have the next three batters fail to get the run home. The hard part - developing an abundance of major league caliber players through years of investement - is done. Now you just have to put the ball in play. The players are there. The money is there. Do the little things to get this run home, dammit.
The skeptic view - they're pocketing money for the stadium, just in case.
When I wrote about this same subject last year, this was brought up, and I more or less dismissed it. I wasn't as critical last year because the truth is that the timing for spending that money was tough. The biggest reason they were under payroll last year was because they needed to have money available in case they didn't trade Johan Santana. And since they traded him so late in the offseason, there just wasn't much to spend money on.
No such excuse is available this year. They have had that money all offseason. They have watched free agent after free agent sign deals that would have been unthinkably cheap just four months ago. Letting any one of those pieces go is understandable. Letting them all go looks criminal.
What they really need to do is take that money and spend it on long-term contracts.
Long-term contracts don't work that way. In the NFL, you might sign players to a big signing bonus and give them money up front. That's necessary because in football the team can cut the player (and the contract) at any time.
But in baseball, the contract is guaranteed, so it doesn't matter much whether you give up front money - it just pays down future years minimally. For instance, last year's signing bonus for Justin Morneau just means that the latter years of his contract are cheaper by a million dollars or so per year. That's not going to make much difference to a $90 million payroll. It's not a bad strategy if you find yourself with leftover money (like the Twins had last year) but it's not a strategy you use if you could improve your team.
Should we really expect increased revenue given the economy?
I think the comments answered this question pretty well all by itself as the revenue sources for the Twins were each examined. I really appreciate these comments, by the way. For seven years I've been meaning to do a thorough examination (with estimates) of the various revenue sources for the Twins, and I've never come close. But my sense is that the ticket revenue is only a very small part, and that many of the revenue sources are quite resistant.
The $20-30 million that the Twins are short represent somewhere between 25% and 33% of their total payroll, and since they claim payroll is a percentage of their total revenue, that would imply they expect revenue to fall 25-33% short this year. There is no way that is the case considering how much of the revenue is from previously negotiated TV and media contracts.
As Opening Day approaches, we'll be able to see the payroll level for the rest of the teams, and then we'll be able to see if MLB thinks revenues are going to be going up or down this year. It looks to me like for MLB as a whole, they're (at worst) holding steady. And there is certainly no reason to expect the Twins, with their new ballpark on the way, to be suffering more than the average MLB team.
BTW, for anyone who wants to dive into the Twins revenue streams in detail, I'll be happy to help. Or if someone knows anyplace that has taken a legitimate stab at this for any major league team, I'd love to see it.
Maybe they're just preparing for future years? Won't all these guys become expensive soon?
Remarkably enough, I examined this before I started going all crazy and writing last Thursday's post. Payroll does escalate significantly in 2010, but (in my mind) not so significantly that significant dollars couldn't be spent this offseason. It jumps about $20 million in 2010, and about another $10 million in 2011 by my back-of-the-napkin calculations. For those who like to dissect this stuff, I've added the details to the right ==>
Could they just roll the money they didn't spend this year into future years?
I examined this question back in 2000 when they cut the payroll back to about $15 million and pocketed that revenue sharing money. I hoped the same thing back then, and it didn't happen, and it turns out there is a very good reason it doesn't.
A business can't save money like you and I do. If we have money leftover at the end of the year, we can just throw it into an investment vehicle, becdause the money has already been taxed. But for a business, any money they have leftover at the end of the year is income that has not yet been taxed. And if it is spent on the business, it is never taxed, because it's just part of the operating expenses.
But if it is NOT spent, it's profit, and it's taxed. So the remaining money could be 'saved', but only after Uncle Sam gets his cut.
So the Twins have the option of either spending that $30 million this year, or carrying over about $20 million to next year (with the IRS and MN Dept of Revenue getting the other $10M). Even if they did keep that money in house instead of distribute it, does anyone believe that $20 million next year is going to buy a better group of free agents next year than $30 million is going to buy this year?
So what's left? Why aren't they meeting payroll?
I'll be honest - I'm still not sure the Twins are intentionally trying to pocket payroll. It might be a logical result of feeling like this team is "good enough" (a question I mean to examine), or being really afraid of any kind of long-term deal, or truly convinced that they don't want to mess with this team much. I am sure, at least, that they will claim as much.
That sounds staid, and it sounds staid at exactly the wrong time. When a team is on the verge of becoming great, that's when a little boldness is called for. But the bigger problem is that they could be wrong. By sitting on their hands, they might doom themselves to be a second place team to the Indians or Tigers this year, or to the Royals or White Sox in future years.
So it could be greed, but maybe just as deadly, it could be timidity. After last offseason's dice rolls(like Young for Garza), many of which crapped out, we probably shouldn't be surprised that the organization is acting awfully conservative. But the surest path to failure is to fail to ever take a risk.
And for fans, the motivation doesn't really matter. Either way, this team is not being improved, and we're watching available resources languish unused.
28 comments:
I'll start off by saying that I am not overly concerned about the payroll figures. Last season they came in under budget because of the F.A. exodus and I was mad because the Twins Front Office was too afraid to sign Santana and Hunter the season before to extensions when what they were asking for was more reasonable. At least they signed the others to longterm contracts and paid them out evenly and with signing bonuses to offset their previous shortsightedness. So with that I give last year a pass. What bothers me is that they are only a few pieces away from being a dominant team. A reliever, SS or 3B, and a power RH bat to bat behind Morneau which could be that IF. There are still several inexpensive solutions relatively speaking. Here is another question that is in line with your thesis. If the Twins can sign a type A F.A. at a discount and forgo next season's first round draft pick, what is the price break that makes it worthwhile for them to do so? Here are 3 F.A.'s whose price tag has gone down because of the draft pick associated with them.
Juan Cruz...This guy would be perfect for our pen.
Orlando Hudson 2b he would allow Casilla to move to SS and Hudson is a gold glove caliber 2b with a .780-.820 OPS.
Ben Sheets SP This is a guy we don't need to sign and also has injury risk, but has huge upside and could allow us to trade a SP for Hardy and I mean Baker if need be.
Not saying that any would sign here, but their values are obviously depressed by the market and their type A status. Plus we do have the available money to pony up. And here's the real kicker, who says these guys can't be traded for prospects or be allowed to leave as type A F.A. when their contracts are up. They should at least be interested in Minn. as we have the opportunity to win here.
Also back to your thesis. Considering the fact that we have an extra OF, SP, prospects, and at least 15-20 or even as high as 30 million to spend, why haven't the Twins been able to fix their holes?
As far as revenue going down next year, I imagine that the Twins will draw between 1.8 and 2.2 million next season. Let's say they draw 2,000,000 or 300,000 less than this year at an average ticket of 15$ thats 4.5 million plus loss of concessions and revenue sharing will be down to as other teams will have lower gate revenues to share. I don't know if the clothing sales are included in revenue sharing or other types of popular memorabilia such as baseballs and cards or is it just the teams? so I would guess on a high side that revenue will decrease from 10-15 million next year. T.V., radio, luxury taxes, and other mediums seem to be constant.
In Conclusion: I am getting tired and frustrated with the Twins for sitting on their hands all of the time. They sat too long on Hunter and Santana and cost us their futures with us, they have minimal holes to fill this offseason and haven't done a thing even though there is no competition for the F.A.'s out there. They even have the available money and pieces to get things done. In Atlanta the fanbase started dwindling after they kept winning the division year after year. I suspect the same will happen to the Twins soon if they don't make many splashes. This is just boring. The Twins Front office either needs to shit or get off the Pot.
I also wanted to phrase my question on the value of a draft pick a little differently so here goes.
Some of this season's type A F.A. are going to lose in the neighborhood of at least $10 million because of their type status. my question is what is the financial value of a first round draft choice, and do the signing bonuses they recieve reflect that and why or why not?
Frankly, if the Pohlad's have some money they don't want, there are a lot of more important places to spend it than on a g*d* baseball team. Ask why they aren't contributing more money to the local food shelves.
Are you complaining that they overspent a couple years ago? Its not at all clear that the payroll of two years ago was sustainable. Payrolls are only supposed to go up?
The fact is last year they spent $47 million on Joe Nathan, $80 million on Justin Morneau and $24 million on Michael Cuddyer. This year, they just spent $8.5 million on Nick Punto. That's $159.5 million dollars over the past year.
And its certainly not clear to me that any money the Twins might realistically have spent would have made the team any better. People keep looking at one year of three and four year deals. But if you sign guys to four year contracts every year, pretty soon you are spending a lot of money on mediocre players. That's all that is available for $20 million.
Committing gobs of money to mediocre players is what makes bad franchises that are mediocre every year. That Twins have spent money wisely when they locked up guys like Morneau and Mauer. Perhaps not so wisely when they locked up Cuddyer. And they spent money last year on Nathan. And they will have to spend a lot of money in the near future if all these young players are as good as everyone seems to think. That is certainly a better investment than Mike Lamb turned out to be.
I don't care how much the Twins spend this year. Or next year. Or the year after. They will spend as much as they decide they can afford. And that will never be enough for whining fans. They will simply whine that they didn't spend more.
Just one quick comment on your tax issue. I'm not accountant, but there is a difference between money saved and money earned. Twins would not pay any new taxes on the 30MM saved just like you and I don't pay taxes on the principle in our savings accounts.
Of course, this doesn't make your argument invalid for the most part...
after submitting, I see where I'm likely wrong. The Twins may EARN another 30MM if it isn't otherwise spent on payroll. My bad.
All I can say is that I'm glad SOMEBODY is trying to keep this team honest.
I was (am) totally behind the new stadium. I was even behind letting Santana and Hunter go even though it broke my heart, and I was completely forgiving of them in not picking up pricey pieces last year and just focusing on in-house growth.
It would be a lot more believable that this team was actually trying to improve if people like Affeldt, Nelson, Blake, Burrell signed ridiculous contracts but all of them were more reasonable than, say, signing Monroe for $3M/1year, or Livan for $5M/1 year.
Even DeRosa (who I wasn't COMPLETELY sold on) was traded for MARGINAL talent so dealing some minor leaguers from our cache for one year of him seems perfectly palatable.
We can keep harping on fleecing the Giants in the AJ deal but most of the front office moves since then have been leaving a bitter taste -- signing mediocre players to ludicrous contracts and then missing out on so many reasonable deals when we have a substantial amount of money to spend (and presumably more when we move into the stadium next year).
Anyway, again, thanks for keeping an eye on this. I just wish Smith was going to be held more accountable.
Reusse hinted at it last week and you did it here. What if Bill Smith has the yips? Further, what if other teams see how the Rays bamboozled him are asking for the sky in hopes they too can flrrce him?
Listening to the DeRosa rumors (who knows if they're true), the Indians seem to have gotten him for much less than they wanted from the twins (Revere, Swarzek, Mulvey?)
The Twins approach works to a point, but it's frustrating when they won't take the risk and get that final (or even extra piece).
I pount to the 2006 acquisition of Phil Nevin at the roster deadline. What might have happenned if they went out and got a legitimate bat?
Anyway, I may be naive but I don't think it's the Pohlads. I lay it at the feet of Ryan and Smitn.
I agree with most of your arguements here but here are a few counter points:
1) Their actual expenese (investment in the stadium) has gone up. They may be off setting those expenses through a decrease in payroll and could be close or near their rate of expense to revenue it just that their percentages have to shift around because of the additional expenses.
2) The economy (you made good arguments their revenue streams should be fairly insulated) however in this type of economy where banks are not quick to lend, they may be trying to shore up their balance sheet by hoarding cash as many other business are...
3) Pohlad's into banking and has had a good understanding on how to maintain a balance sheet to maximize the value of the assets.
But I like where you are headed, this do nothingness is a bit mind boggling. I'd like to see them extend Maer this spring because if he gets a year out from FA, he could be looking at Boston and their lack of a long term catcher and the inevitable could be in play... huge $$$,$$$,$$$ to leave the Twins.
And wouldn't by this basic logic the Yankee's be underspending?
Their payroll has held relatively steady for years, as a percentage, and what do these clubs both have in common? A relative expense to off-set their payroll growth to maintain a similar opperating profitability rate.
Are the Twins haording money to pay down their investment in the new stadium. Looks like it, but nothing on paper to back this up.
If the Twins were worth $150 million when contraction happened, and reports are that they are worth near $300 million currently (because of the stadium investment)....what will they be worth on day one of play in the new stadium. $600 million perchance?
The joy of the seasons when the Twins lost money, that could offset profits the Pohlad family made in other devisions of their empire. Also, there were times when Marquette Bank was a major sponsor of the Twins...money basically changing hands on ledger sheets. There's ways to make money by losing money.
I'm under the perception that the Twins are as leveraged as they can be...like as the value of the team increased, the pwoers-tha-be borrowed up to the 70 or 80% they could against the principle...and from other sources than intrnal. So there may be a big interest payment vs. debt each year. If they didn't, the team...purchased for $38 million waaaaay back in the 80's, should be pretty much totally paid off.
And I still like to harp on that 50-52% of revenue for player payroll. At some point, when you run a small business, the cost to sell and market and open your doors is far less a percentage than the cost of product. If I sell $1 million dollars worth of shoes and have to pay $500,000 for the product...I then sell $5 million worth of shoes and pay $2.5 million for the product. I'm not spending $2.5 million, necessarily, to keep my business going. I probably have at least a million+ to invest in different product, try bad product, or use for long-term improvements. Or, I just put the pure outrageous profit into my own pocket (after taxes.
I'm pretty sure Bill Smith already addressed these payroll concerns with the best answer possible (from the Email in the comments section of the last post) -
"but just because there is more allocated in the budget, it would be foolish to rush out and spend it on some of the available free agents who do not merit that kind of salary."
The Twins seem to have drawn a line in the sand about how much they are willing to spend on a player such as Casey Blake. According to reports, it was 2 years, 14 million. Blake wanted more, the Twins said no, and the Dodgers said yes. Like another commenter said in the last post, overspending on free agents is what mediocre teams do, and it keeps them mediocre.
Spending money just because you have it is a bad business decision.
I'm going to play devil's advocate here and say our lack of spending and big trades is very beneficial from a flexibility standpoint. Committing sigificant talent and/or money for players means committing significant playing time. When a player does not produce it is more difficult to cut bait and give some playing time to a hungry cheap prospect. Almost every free agent signing over the last few years has not only cost us a lot of cash but many wins as most of these guys are given playing time well after it's obvious we can get better production from the minors.
I'm content with the Twins as long as we never lose another good homegrown player that we want to keep over money. I'm confident that guys like Mauer, Morneau, Span and Liriano will be here until we don't want them anymore. Aside from our guys there are very few good consistent guys that are willing to play in Minnesota and that will not change with an outdoor ballpark. The Twins would have to beat the market for almost any type A free agent. Consistently paying people more to play somewhere they would rather not doesn't sound like a good business model to me. We're Minnesota Twins fans so when it comes to big free agents this is just the way it's going to be.
To the above commenter, spending money just to spend money is NOT a wise decision, you're compeltely correct.
Blake isn't the most amazing person the Twins could have gotten, most certainly. But to be fair he's a solid third baseman and his contract as it stands with the Dodgers is far from unreasonable.
To take it even further, legitimate players who could have helped the Twins, such as Affeldt, Nelson, Howry, Burrell all signed extremely reasonable contracts as well. That would not qualify as spending money simply because we have it; it would be spending money wisely in an area of need and that seems to be something that Bill Smith is choosing not to do. That is what if baffling.
Obviously at this point, there aren't that many quality free agents available in positions of need so spending money because we have it now doesn't make sense. But Bill Smith needs a serious criticism for not acting in the appropriate areas when he could have and when we obviously had the money for these people.
And who knows about the DeRosa assets, I realize. Maybe there's some reason the Indians got him for more marginal prospects than they seemed to want from us, but that's still mind-boggling as well.
The one thing that troubles me about the conclusion is that it does not look at specifically what should have done with the money.
The Twins made a run at Beltre (the only obvious upgrade at 3b) and were more than willing to take on his salary - Seattle balked. They also made an ill advised waiver claim on Jarrod Washburn - agreeing to take on his salary.
While looking purely at the decrease in payroll it is an easy conclusion to make that they should have spent to improve the club - either through FA talent or trading for higher salaried players, when you look at it from a transaction by transaction basis, it just does not appear that there was a really good use of the extra $ to improve the major league club. In fact, I thought that the Twins foolishly overpaid for the likes of Craig Monroe, Tony Batista and Livan Hernandez.
That being said, what I would like to see, especially in years where there is such a high budget surplus, is the Twins putting that money into signing foreign players and using it on signing bonuses for draftees.
Finally, the conclusion that having cheap young talent is only good if you use the money elsewhere, I think is also fallacious.
I am fine with them saving money on talent if there are young players who can do the job, what I can't stand is when the team hangs onto players beyond their sell-by date. It is not ok to lose player on waivers who you could have traded a year earlier because you now dont have room for them. I would like the twins to be more proactive on looking into the future with some of the prospects running out of options.
Hate losing players like Restovich for nothing when moving him a year earlier would have given some value.
But if you don't spend that $30 million on something else, does it really matter whether those guys each cost $.5M or $6.5M?
I agree with most of what you said on a basic level, but I think you're missing the point a little bit here. Cheap young pitching is valuable, if not because it saves the Twins money than because it could save another team money. Having a quality pitcher under team control at a modest price makes him a much more valuable trade piece, which is why Matt Garza was basically a better trade chit than Santana last offseason.
I also see some truth truth in the counterargument that there really isn't a whole lot out there worth spending on. The fact that the Twins have the money available to sign Casey Blake to a three-year deal or Orlando Cabrera to a four-year deal doesn't make those good, worthwhile signings.
I'm more frustrated by the team's unwillingness to pull the trigger on a minor but potentially very helpful deal for someone like DeRosa than their unwillingness to shell out a bunch of money on mediocre free agents.
People need to stop looking at recent reasonable deals as a benchmark for what the Twins can acomplish. As I mentioned in my post above there are a host of reasons why many players do not want to play in Minnesota - climate (most pro players are from warmer year round climates as they can then practice 365 days a year), Metrodome, lack of diversity in the Twin Cities (remember KG's initial reaction to the Boston trade?), proximity to Latin countries where many players have family, the club's history of not signing big contracts, our committment to constantly bringing up minor league talent to compete for playing time...
For reasons outside of our control (many of them at least) free agents cost the Twins more than most other clubs. Therefore recent contracts signed by releivers with the Giants for example are not a good benchmark for what those same players would cost the Twins. It is entirely possible that those "reasonable" contracts would not be very reasonable if they were increased to levels necessary to lure people up to MN.
Just to point out the obvious:
The Twins payroll two years ago was
You don't know what the Twins payroll will be next season. For instance, at this time last year they hadn't signed Joe Nathan.
You don't know if the Twins actually paid any taxes last year or will next year.
The Twins have other ways to spend money to improve the team than annual payroll. For instance, those bonuses they paid to draft choices this year.
The Twins may have been 18th in payroll in 2007 but they were about 25th in revenue in 2006. So their payroll last year may well have been high based on what they could afford.
I think people are focusing WAY too much on fighting the argument that we should be spending all the money we have. That's not the point. The point isn't that we should be spending it because it's there even if there isn't anything out there to upgrade us; it's that the money was there and there WERE tangible good players that we could have signed:
Affeldt, Nelson, Burrell to name three if people are hell bent against Blake, which I can understand to some extent.
Now sure, maybe those guys wouldn't have signed contracts to play in Minnesota for personal reasons. But I highly doubt that the cold, the lack of ethnic diversity, and our minor league depth would have affected any of those three significantly.
Anyway, it's easy to just shrug and say, well, all the good free agents who could have improved us are gone, so it makes sense not to spend all that surplus budget. Granted. But it DOES NOT excuse Smith from not moving when there were affordable, reasonably priced pieces to grab. And we're not talking about Cabrera, Furcal, even Blake, who all could have been overlooked wisely.
There's no way any of the 2 year contracts dished out for Affeldt, Nelson or Burrell would have hampered us in the long run or been considered excessive spending if we're going by the numbers they actually signed at.
But the worst thing Smith could do now would be to desperately overpay someone like Cabrera with all this money because he didn't act on someone else when he should have.
Wait till the attractive options (Furcal, Burrell, Blake, Saito, et al) are gone, and then claim "there's nothing worth spending the money on."
Nice.
The fact is last year they spent $47 million on Joe Nathan, $80 million on Justin Morneau and $24 million on Michael Cuddyer. This year, they just spent $8.5 million on Nick Punto. That's $159.5 million dollars over the past year.
If you're going to contend the Twins spent $80M for Morneau last year, then to be fair you have to count his salary as $0 in 2009-2013, right?
What's the Twins contribution to the ballpark? $145 million? Expect salary to lag revenue until that money has been recouped. And anyone who thinks the Pohlads haven't been making a profit on the team every year is high. The only thing that stopped the contraction plan was a Minnesota judges order that the team would have to open the books. The legislators who voted for the stadium accomplished nothing except transferring half a billion dollars from Minnesota taxpayers to the Pohlads. Great work, guys.
First off, the Pohlads didn't pocket the unspent payroll last year. They put it into the stadium in the form of extra amenities. The announcement was made right after Nathan, Morneau and Cuddy were extended and the Santana trade was a done deal. In other words, once the front office knew just what their payroll would actually be.
If memory serves, the announcement didn't flat out state they were spending the money they didn't use on Santana and Hunter. It simply stated that they were adding 23 million dollars to the stadium fund (which just happened to be the difference between the projected payroll for 2008 and what they wound up spending). This was money that was above and beyond what they were already committed to put up.
Look, I'm just as frustrated as anybody for the lack of off season moves. At the same time, I can't fault Smith for most of the deals that he passed on.
Not getting Blake broke my heart. He was a perfect fit ... but not for three years. There is no way I can fault Smith for not caving and offering that third year. The Dodgers made a bad move and they will probably regret it down the line. Especially, the way the FA market has played out this year. They also caved after the Twins backed out and there was no reason to give him three. Dumb dumb dumb. If it was the other way around and Smith gave him three years after the Dodgers caved, Twins fans would be screaming bloody murder. The Twins blogs would read like the villagers storming the Frankenstein castle with pitchforks and torches.
And DeRosa? What? Is that a joke? Is there there anybody here that really thinks his 20 homers last year were anything but a fluke? It's also unlikely he would be able to duplicate anything he did at Wrigley stadium in the dome anyway. And if your still not convinced, compare his career stats to Lamb's - they're almost identical. DeRosa went cheap because nobody wanted him enough to offer more. The Cubs needed to dump payroll so they could afford Bradley and the deal with the Indians was the best they could get. If the Twins would have picked up DeRosa, trust me, it would have been a whole season of ranting and raving and Lamb comparisons.
Then there are the posters that rail on Dunn, Burrell or other outfielder/DH types. I think I even remember somebody suggesting Bonds at one point. Last time I checked the team was overstocked on outfielders, why on earth would you want them to add more no matter how cheap they might go? Not only that, the team would still be short a bonified third baseman.
People keep saying the team shouldn't spend just to spend, but what do you call complaining about not pulling the trigger on any of those deals? If the team can't replace the Buscher/Harris platoon with a solid RH bat with some pop and a decent glove, then there isn't an upgrade and they are better off not making the deal.
In light of the rather limited infield options this year, how about this for a strategy ...? How about Smith and company do nothing except maybe sign Crede (if they can get him cheap enough to warrant the risk). Start the season and see how it goes. If the team is still in it at the trade deadline and nobody has stepped up to become that big bat, make another run at Beltre or one of the other players they couldn't nab this winter.
More than a third base upgrade, my biggest frustration has been the team not adding bullpen help. But with the passing of Carl Pohlad this past week, I'm willing to cut them a little slack. I know most fans think of him as a stingy old bastard, but he was the CEO's father and well liked by most of the rest. I can't fault them if their priorities were elsewhere for the past few months.
Since I did bring up bullpen help ...
I'm really leaning toward Cruz. At first, I flinched because of losing the draft pick. But barring an injury or some other catastrophe, we wouldn't really be losing a pick, just putting it off for a year or two. Right now, I think the team has something like the 23rd pick. If they had two first round picks next year or the year after, one of them would almost have to be higher than 23rd. In my mind, that could be well worth the wait.
Sploorp:
You're right about Blake, it would have been unwise to add that third year to the contract probably, so I don't think I'm really complaining about that.
I guess I haven't heard much wailing about Dunn or Bonds recently, though I do think passing on Burrell was odd. We DO have a glut of outfielders, but none of those outfielders is the intimidating right handed power bat that is supposed to slide in to protect Mauer and Morneau. Cuddyer is just not that guy, and Delmon could be some day but we're still crossing our fingers on that. Kubel's a lefty and Span and Gomez are not a power threat.
Adding Burrell would make one or more of our outfielders expendable (he would probably be the DH so Kubel would either platoon or get outfield duty, I doubt we would have let Kubel go). But just because we have a lot of outfielders doesn't mean they shouldn't be replaced if there's an option out there that meets our needs better than we do. But not getting Burrell isn't the problem, it's just icing on the cake.
The bullpen is the real issue. Nelson, Affeldt, and as you mention even Saito. We could have made runs at any of them. We SHOULD have made runs at any of them.
Because Carl Pohlad died we're excusing Bill Smith? I doubt Pohlad's other business holdings shut down and put a moratorium on all other work after his passing. The Twins are a business, and there should be enough people in the front office to keep things running.
His passing was untimely and most certainly a distraction, but it's not as if Pohlad suddenly became seriously ill and passed away in the span of a few weeks and during that time we missed out on all the good bullpen options: Pohlad's declining health has been no secret for quite awhile, and I think people close to him were probably aware for awhile he could have passed at any moment -- that doesn't mean they shut everything down and wait for it.
Lyon would be passable at this point, as you say. And Cruz would be a boost, even if we have to surrender the draft pick. But I think it was horrible for the F.O. to do nothing while lots of affordable good bullpen upgrades left the board.
Manny 4/92. Why not?
The whole 'can't afford a third year' for Blake is complete hogwash.
If he's a 'perfect fit,' then he was worth the added risk of a third year, at a cost of only $3.5M in added money.
The Twins reportedly offered Blake 2 years, $14M. He signed for 3 at $16.25M, plus a $1.25M buyout in 2012, for a grand total of $17.5M.
The Twins passed on the 'perfect fit' for a grand total of $2.25M in 2011, and $1.25M in 2012.
You're telling us that somehow $3.5M, spread out over 2011 and 2012, turned the 'perfect fit' into something the Twins couldn't afford?
That's ridiculous.
That was the deal after the Twins bowed out and Blake's agent lost any leverage he had. Once, the Twins bowed out, Blakes agent should have been negotiating the best two year deal he could get, but the Dodgers cave in and gave him three.
I know his agent said Blake would take the first 3 year deal offered, but what agents say and what agents do are two different things. If the Twins offered that exact same deal, Blake's agent would have taken it to the Dodgers and given them a chance to top it.
So, now that extra 2.5 million that they were too cheap to spend suddenly starts to climb. At what point do they stop being cheap and start becoming fiscally responsible by passing?
Smith did the right thing.
At what point do they stop being cheap and start becoming fiscally responsible by passing?
Apparently, they start becoming cheap at the $2.25M in 2011 and $1.25M in 2012 point, for what you called the 'perfect fit.'
Smith did the wrong thing.
Having read this post the many comments, and being a regular reader of this blog I wonder if we are not part of the cause for the Twins inability to sign mid-line free agents this year.
Over the last few years the Twins have taken some chances on free agents only to have the locals jump on the team and the free agents when they don't perform in the first month with the new team. By June people are calling for the veterans to be dumped and the impressive prospect from Spring Training to be brought in.
Maybe the team and the veteran free agents have gotten the message. The fan base and the local media (traditional and otherwise) won't want you unless you've got MVP numbers by Memorial Day.
[Puts on asbestos suit and hard hat]
Flame away.
Jack, you're right, many of our prospects are good (or end up getting better) enough to replace all the free agents we usually bring in -- but those tend to be bargain bin free agents instead of mid-level ones (with the possible exception of Mike Lamb, who just horribly underperformed for some reason).
I don't think many of the people we're harping on could hardly be considered MVP-caliber guys, but they're definitely a step up from our usual route of signing guys like Ortiz, Hernandez, Ponson, Batista, Rondell White, etc.
We very well could have in house answers for our bullpen crisis with guys like Slama, Swarzak, Gomez, Delaney, but it didn't work for us last year and it sure would be nice to have a reliable bullpen guy who actually IS mid-level like you're saying.
But definitely, if we grab at scraps and uncertain reclamation projects like we've done the past couple years in free agency, then I'm sure we'll all be harping for Slama and Delaney within a month of the season.
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