Twins Payroll 2010

To me, today is really the first day of the offseason. Yesterday, the day after the last game of the season, is traditionally a day of mourning. But it's also the day that the beat writers talk to the manager. And so today they give us their thoughts on what the Twins will be doing this offseason.

But to be candid, I mostly ignore what I read. I have for years, ever since I read in several sources that Cristian Guzman would re-sign with the Twins. A short look at the payroll situation would tell anyone that cared to look that it was never going to happen. But nobody cared to look. They cared to talk to the manager. And he liked Guzman.

That's one of the reasons I've often run a payroll breakdown for the Twins in the upcoming season around this time. The Yankees series should have driven the point home to anyone that cares to pay attention - payroll is critically important. More important than most want to admit.

How important? Well, consider how you evaluate how a team might do in the upcoming season. First, you evaluate how they did in the previous season. Then you take a look at the players they added or subtracted, or that player you think will improve or decline. So you start with a baseline (the team's previous record) and add or subtract based on their moves.

But it turns out that you've chosen the wrong baseline. If, rather than pay attention to the team's record, you paid attention to their payroll, you would have a better baseline. Statistically, it is a better indicator than a team's record as to how they will do. That's how important it is.

(And to answer the question of the sabremetrically inclined gentleman in the back who is eagerly raising his hand ... No, I haven't compared the correlation coefficient to the run differential. But I can tell you it's in the ballpark. We'll try to get to that sometime this offseason.)

Anyway, payroll counts, whether you want to believe it or not. It has, in the past, been a severe limiting factor for the Twins. That's why I wrote up a four-page analysis of the Twins payroll situation in 2010, 2011 and 2012 for the TwinsCentric Offseason GM Handbook. I and three other hard-working bloggers would sure appreciate it if you would click over and buy it to support us.

But I'm going to copy a bunch of it into today's entry, free of charge, for a simple reason - because it's ALREADY available free of charge. You can request a 61-page sample that is basically 1/3 of the whole book, absolutely free, just by clicking here. And it includes most of what is below.

Why are we doing that? I can't speak for Seth, Nick or Parker, but I'm doing it because I'm tired of the offseason stories being driven by irrelevancies, like whether or not the manager likes Guzman, or happened to whisper some kind words to Alexi Casilla. The latter isn't going to determine whether the Twins go out and sign a second baseman. It's far more relevant whether there are any decent, affordable second basemen on the market this year. And it turns out there are.

So below you'll find the payroll situation for the Twins in 2010, and you'll find a lot of financial wiggle room. At the very bottom I'll also talk briefly about something that ISN'T in the Handbook, but probably should have been.

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Here’s the part of your job you least look forward to: payroll.

Payroll is a limitation for all major league teams, but for the last couple of decades, the Twins have been limited to it more than most. There has been plenty of speculation that could or should change with the opening of Target Field in 2010, but the Twins haven’t announced the level of their commitment to salaries just yet.

That doesn’t mean we can’t give you a guess, especially given that we know how much has been spent the rest of this decade. The chart on the right is the club’s Opening Day salaries as computed by USA Today. We should note that it does NOT include signing bonuses, so that number for 2008 should actually be closer to $66 million due to $8.75 million in signing bonuses paid to Justin Morneau and Michael Cuddyer.

Still, you’ll notice that the Twins payroll has basically leveled off since the announcement of the new taxpayer-subsidized ballpark. And while MLB (and the rest of the world) has faced a recession during that time, we haven’t seen similar stagnation in other teams’ payrolls. Overall, major league payroll climbed 7% across the board over those two years. If the Twins payroll climbed a similar amount, it would be closer to $77 million this year, $12 million higher than it actually was.

So, given that level, we’ll add a 5% increase for 2010 and another $15 million to $20 million bump from the new stadium. Add all that up and you have 95 to $100 million to spend.

Well, not to spend, exactly. Most of that is already spoken for by previous commitments. You have some guaranteed salaries with existing players, and there are more players that you’re going to want to keep while you still control their salaries. On your left, you can see how things are set up, and the salaries of some other Twins farmhands below.

Some assumptions were made to simplify things, so let’s spell them out in case you want to make some changes.

LF/4th OF – Carlos Gomez and Delmon Young will both be eligible for their first year of arbitration, meaning they’re relative bargains, so they’re on the roster for now. I put Young in LF since he’s been there most of Sept, but feel free to move them around.

IF – Nick Punto’s salary is guaranteed, Alexi Casilla is out of options, and Brendan Harris will be eligible for arbitration and end up with a salary somewhere around $1 million. It’s possible you don’t offer him arbitration, but that also seems like a reasonable price for a utility infielder that provides offensive flexibility. Of course, with two infield bench spots, one of the three probably needs to be starting at a middle infield spot. I chose Punto. You’ll need to get rid of one of them to move him to the bench.

SP - In the rotation, Scott Baker, Nick Blackburn and Kevin Slowey seem like locks to return, and Kevin Duensing has likely earned his spot. I could’ve also put Francisco Liriano in there, but I put him in the bullpen so you had a rotation spot for a veteran if you would like. It also moved Glen Perkins off the roster completely, so he’s on the following table, with other bench names that you can use if you like.

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The story goes on to talk about the 2011 and 2012 commitments, but I want to get to a different point. One question I've received since I wrote this is how confident I am in the $15-20 million bump in payroll from the new field. The truth is that is was an off-the-cuff estimate, with almost no realy analysis behind it. So let's add that now....

A few months ago, we looked at a document from the Metropolitan Sports Commission which suggested the Twins cleared approximately $6 million in concessions and $40 million in ticket revenues in 2007 when their attendance was 2.2 million. Just straightlining that to a 3 million attendance figure adds another $16 million in revenue. If we add another 10% to that number (a reasonable expectation over the last three years) it adds another $7 million. That's a $23 million bump in revenue.

I think we can safely assume that with suites, etc., that number could go a LOT higher. But even if it doesn't, and even if payroll runs at just over 50% or overall revenue, we're talking about a $12 million bump.

Now, I should mention, I don't know enough about the other side of the ledger. I don't know how much the Twins are paying to lease the new ballpark, or how that compares to their lease of the Metrodome. Of course, I also don't know how much their receiving for the various sponsorships it's developed, like the "Target Fields" moniker or the recent deal with Treasure Island.

But a $10-$15 million bump doesn't seem unreasonable. If anything, I'd expect it to be higher.