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.