Wednesday, January 07, 2009

Of Budget and Betrayal

Why is the Twins Payroll Shrinking?

That the Twins are fiscally conservative isn’t a news bulletin to any baseball fans, locally or nationally. This is the team that has consistently ranked in the bottom third of MLB payroll, ordered payroll slashed to the bone in 2000 and volunteered for its own demise in 2001. Telling Minnesotans that the Twins are cheap is like telling them that snow is cold.

But previously, Twins fans could take solace that the fiscal “responsibility” was the result of a larger imbalance in Major League’s Baseball’s revenues. The Twins claimed that they simply worked within a budget, and that their payroll was determined as a percentage of their total revenue. There was enough evidence to give them the benefit of the doubt. The budget level was understood by those fans paying attention, and steadily grew, or at least remained steady.

For instance, here are the Twins Opening Day payroll levels according to USA Today from 2000-2007:

But the 2007 season provided more than just the highest payroll level ever for the franchise. That was also the season where the Twins broke ground on their brand new taxpayer-funded stadium, which the Twins estimated would increase revenues, and thus raise payroll $20-$30 million per year.

It also corresponded to the beginning of an increase in revenues and payrolls across the board for Major League Baseball. Payrolls for major league teams increased 8% between 2007 and 2008. Unless, that is, you were the Minnesota Twins:

Twins payroll decreased 8% between 2007 and 2008, despite the highest attendance levels since 1992. (For the other payroll geeks out there, the answer is yes, the decreased payroll level for 2008 above does includes the signing bonuses paid to Justin Morneau and Michael Cuddyer.)

And in 2009, coming off their highest attendance since their last World Series honeymoon and just one year from playing in their new revenue-producing stadium, it appears payroll will shrink again (see Appendix). Currently the Twins project to have a payroll in the low $60 million range, five million dollars less than last year, 10 million dollars less than 2007, and roughly $25-30 million less than would have been anticipated two years ago.

And it’s not just in overall dollars, either. The Twins have also spent less compared to their peers in Major League Baseball. In 2007, the Twins ranked 18th in payroll spending. Last year, it was 25th. And this year? We won’t know the exact rank until opening day, but with the current team, payroll is likely to go down another $4 million.

The lack of spending is not for lack of options. This year’s offseason produced a relative bumper crop of free agents, certainly better than last year or next year. What’s more, there were solid options available where the Twins have needs, like third base (Casey Blake), shortstop (Rafael Furcal) and middle relief (Joe Nelson). There was also the oft-reference right-handed bat to plug between Joe Mauer and Justin Morneau (Pat Burrell).

Not only did all of those players sign with other teams, but they also signed at bargain prices. Because of that, not only could the Twins have afforded any one of them, they could have afforded all four of them and stayed with a budget of $90 million. And they still could’ve claimed to have spent their money wisely.

Minnesotans are accustomed to kvetching about the hometown nine’s pernicious ways, but this spending (or lack thereof) is something new. For the second year in a row, against a tide of rising MLB and local revenues, the Minnesota Twins payroll is shrinking. And against a backdrop of a new stadium, it smells less like budgeting, and more like betrayal.


Appendix: Approximage Anticipated Payroll for 2009