One of the biggest downers of the offseason was the announcement that the Twins would trim their 2012 payroll to about $100 million. At first many thought it was a joke or a throwaway comment meant to lower expectations. Sure, the team had just lost 99 games, but they also had a nice new profitable stadium and a loyal fanbase to provide plenty of revenue. But it turned out that the $100 million payroll was a reality, leaving us all to wonder how much better the team could be if they had spent that extra money (imagine the same team, but with C.J. Wilson pitching Opening Day).
How much money do the Twins really have? Was the payroll cut justified? With help from Forbes Magazine’s website, Puckett’s Pond will present the numbers and let you be the judge.
According to Forbes, The Minnesota Twins are worth $510 million, 14th highest in MLB. If that sounds like a lot of money, well, that’s because it is. But it’s just a 4% climb in value from last year, when the team was worth $490 million. The average MLB team jumped in value by 16% over the past year. Obviously, the slow increase is probably due in part to the team’s poor play; you don’t expect a 99 loss team to be raking in piles of cash. But the Mariners and Astros, both pitiful teams in 2011, both managed to leapfrog the Twins, with the M’s adding an astonishing 30% to their 2011 value.
But franchise worth is not as important as total revenue when determining whether your team can compete. The Twins pulled down $213 in total revenue last year, which was the same total as 2010. The only difference is that some other teams passed them up. The $213 million figure was 13th in MLB last year after ranking 9th in 2010. High revenues are both a blessing and a curse. Obviously it’s good to earn more, but high revenue teams also have to pay into MLB’s revenue sharing system. The Twins had to pony up $10 million in revenue sharing – about the annual salary of a number two or number three starting pitcher.
What about profits? The Twins had an operating income of $16.6 million last year (operating income is equal to profits minus operating expenses). This figure was actually down quite a bit from the year before, when the Twins raked in $26.5 million in operating income. As with the total franchise value, this figure is right about the middle of the pack: the Twins profit figure was 15th in MLB. So the team is definitely not hurting for money, but the high payroll and declining winning percentage did take a toll on the bottom line in 2011. It’s possible that the team expects a lower figure this year, given that last year’s bad record can be expected to put a damper on ticket and merchandise sales.
Interestingly, the division rival Indians topped the list with an operating income over $30 million, and the Royals were a close second. The White Sox and Tigers were both near the bottom of the list, with operating incomes of $10 million and $8.2 million respectively.
What’s the bottom line of all this bottom line talk? If there’s one lesson to learn from these financial numbers, it’s that the Twins are a middle-of-the-road team. It is no longer accurate to call them a “small market” team, even though we still hear that term batted around from time to time. But on the other hand, the Twins certainly are not part of MLB’s money-making elite. Wherever they finish in the standings, their bank accounts are a solid .500.
Tags: Minnesota Twins