The Twins’ New TV Contract and Its Impact on Payroll

January 6, 2012
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Remember when the Twins were a small market team?  Remember when they got a new ballpark and bumped the payroll up over $100M?  Not really a small market team anymore–based on payroll.

Today 1500ESPN’s Phil Mackey ruffled a few feathers with his column “Like it or not, scaling back payroll is right move for Twins”.  He laid out some valid points as to why the Twins should be cutting the payroll, the main point being the Twins have to wait and see how Mauer and Morneau bounce back before putting more money into the team that can’t contend without them.  I suggest you go read his column if you haven’t already, Phil’s one of the best Twins guys in town and he’s got some good nuggets in the column.

My take on the payroll.

I get Phil’s point as it’s a valid, logical argument but at the same time, the fan in me isn’t too stoked about it.  I accept it but that doesn’t meant I have to like it. The Twins still haven’t addressed the pitching staff, which if they did have a healthy Mauer and Morneau, would be the downfall of this team. Marquis doesn’t count (hope he proves me wrong).  No offense to him but he’s another pitch-to-contact type pitcher that the Twins already have too many of because they’re pitch-to-contact hoarders.  I’m not a fan of the wait-and-see approach with Mauer and Morneau’s health. Why not be proactive instead of reactive?  I’m sure there are some FA’s the Twins could sign that help them beyond this season.

Anyways, that’s just my thoughts on the payroll discussion. Stuff I’ve been trying to tweet but butchered with the 140 character limit.  I like the moves the Twins have made thus far with Willingham, Doumit, and Carroll.  To be fair to the front office, if the Twins are healthy and legit contenders, who’s to say they don’t go and trade for a decent arm during the season?

The new Twins TV deal and reason I was writing this before wandered off into payroll land.

In the aforementioned column, Mackey  reported that the Twins have a new contract with FOX Sports North worth approximately $29M annually.  I don’t know anything about television markets but when I saw the amount, I was surprised at how low the number was.  Although the Twins payroll may not be consistent with a small market team, the TV contract certainly screams small market, especially when it’s compared with the Angels deal with FOX Sports which is reported to be around $150M annually.

Want to know where all the money goes?  The good folks at TTBB Analytics are here to help. Remember the saying “don’t spend it all in one place”?  Yeah……

Opulence, Joe has it.

 

Obviously I have no idea where the Twins spread the $29M, it just doesn’t sound right, 80% of your TV deal is going to one player.  Imagine if an Angel’s player made 80% of their annual TV revenue, wow.

Closing thoughts.

After trying to crawl out of the shadow of a small market team, the Twins may be going back into the shadow due to cable changing the revenue game. There’s no way the Twins’ TV deals will ever be as high as teams like the Angels and that puts them at a financial disadvantage.  A disadvantage that the team has no control over, unlike attendance.  If the Twins are ever going to win again, it’s going to be done the Twins Way 2.0—having a higher payroll thanks to the new ballpark but still pinching pennies and finding cheap free agents on Craigslist.  Why? Because That’s Twins Baseball.

UPDATE (The impact on payroll part)

Thanks to @Ray_Cowan for tweeting me a link with information on the Twins’ previous TV deal.  Remember how I thought the $29M deal sounded low?  Well back in 2004 (after the Victory Sports One kerfuffle), the Twins signed an 8 year deal with FSN for…$12 million.  That’s not $12M annually that’s $12M over 8 years or $1.5M annually.  This year the Twins will see a $27.5M increase in TV revenue alone!

Wait a minute.

So let’s get this straight…the Twins are making $27.5M more a year in TV revenue and cutting payroll by roughly $15M in the third year of a beautiful, revenue spewing ballpark? I now have no problem with fans thinking about their pitchforks and torches.  It feels like you can do better than Jason Marquis and no bullpen help when you’re sitting on added revenue, and money that was already cut from payroll.

If the numbers above are correct, I’m pissed if I’m a season ticket holder or hell, any Twins fan.  Then again the Twins could be saving the money for 2013 when they know for sure if Mauer is back and Morneau can be productive again.  If Mauer and/or Morneau aren’t back to where they should be, then they tap the war chest and go sign some top shelf free agents….right?  I crack myself up.

If I’m wrong about the previous TV contract, feel free to call me an idiot.  I think it’s right.

Update Jan 6th, 1pm.

Heard on Reusse and Mackey that the Twins deal actually started last season and the previous deal was $12M per year for 8 years, not $12M total over 8 years.  If anyone can confirm or deny, it would be much appreciated.  Don’t want to use false information.

Update Jan 12th, 3pm.

I wanted to get the facts right so I emailed Phil Mackey to get confirmation on the details of the previous tv contract.  Was it really 8 years for total of $12M (which now seems absurd) or was it 8 years at $12M/yr?  He replied via tweet

@bennyc50 Forgot to reply to your email last week. Sounds like old deal was worth maybe 1/4 of what new deal is.

Hopefully that clears up some of the confusion. Thanks to Phil for the info.

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4 Responses to The Twins’ New TV Contract and Its Impact on Payroll

  1. kwatt on January 6, 2012 at 6:59 am

    I can’t get to worked up about it. The team stinks right now and its future is very, very bleak. It’s going to be that way whether they spend $90 million, $100 million, or $120 million. There’s no sense to me spending $115 million to field a team just because you can.

  2. BWC on January 6, 2012 at 11:22 am

    Yeah I think Mackey’s point still holds water, even if the Twins have more money to spend. At the same time I can see where fans are frustrated. I think what needs to happen….the season hurries up and gets here so we can find out about Morneau and Mauer.

  3. Ray C on January 7, 2012 at 12:31 am

    Mackey is deff. right that the new deal was in place before start of 2011 season, as it was announced to the public on February 17th,2011, though with no financial terms. That was what Mackey unearthed in part of his article yesterday. Obviously, I would want to assume that Phil is also right on the $12M/year for 8 years instead of $12M for 8 years that was written. With that said, a $17M increase is not chunk change. Not to say the Pohlads throw all $17M back to payroll, because business is business, but maybe $9M? If the Twins are not applying any of the new money to payroll, I also hope its going into a war chest!

  4. Geo on April 4, 2012 at 3:33 pm

    “It’Spring and I believe in the Twins!”

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