Mackey: Like it or not, scaling back payroll is right move for Twins
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It was at some point in mid-September, towards the end of an embarrassing, disastrous 99-loss season, when Minnesota Twins owner and CEO Jim Pohlad decided he had to draw a line in the sand.
With Joe Mauer bouncing back and forth from Mayo Clinic, nowhere near a baseball diamond, and Justin Morneau undergoing the second, third and fourth surgeries of his third straight injury-plagued season -- not to mention another round of concussion symptoms -- Pohlad removed his fan glasses and instead put on his business specs.
Pohlad, by all accounts, is a competitive man. He wants to win. But he also views the Twins as a business.
And in September he told people close to him that from a business standpoint there was no way he could justify pumping excess money into a ship packed with so much uncertainty.
Despite what fans with pitchforks want to hear, Pohlad is right.
A large and boisterous chunk of the Twins' fan base feels betrayed that ownership has decided to scale back the payroll from $113 million in 2011 to approximately $100 million for next season.
One main cry of contention: How can a 99-loss team possibly get back into contention by cutting payroll?
For one, ownership gave the fans exactly what they wanted all along -- a $100 million payroll. Prior to 2010 the Twins' payroll had been no higher than $71 million at any point in the team's history. Fans complained when ownership didn't re-sign Johan Santana and Torii Hunter, so the team turned around and extended the contracts of Mauer and Morneau.
Not to mention, Pohlad made it clear dating back to a Star Tribune interview three months ago that the 2011 payroll "exceeded where we wanted it." In other words, regression was inevitable.
As of right now, the payroll sits around $97 million to $98 million. It's still possible the Twins could add one more relief pitcher at a discounted price, but one person with knowledge of the team's finances said it's likely they will spend upwards of $18 million between the 2012 amateur draft and international signings -- a spending level that would rank near the top of the league in those categories.
It's also worth noting the Twins, for the first time in franchise history, were a revenue sharing-paying team in 2011 -- almost $15 million, according to sources. They will likely pay the same in 2012.
Another main cry of contention: The Twins' attendance surpassed three million fans for the second consecutive year in 2011, so why is it necessary to slash salaries?
Well, the St. Louis Cardinals, Milwaukee Brewers and San Francisco Giants all drew three million fans in 2011 too, but their payrolls sat at $105 million, $85 million and $118 million, respectively. The Giants' lofty payroll was an anomaly -- the highest in franchise history by far and $22 million higher than in their World Series winning year of 2010. San Francisco's TV market is also much larger than Minneapolis, which helps, and it's probably a little easier to stretch payroll limits when coming off a World Series title.
Teams base payrolls off revenue. The Twins keep revenue details private, but one important factor that shouldn't be overlooked is TV money.
The Yankees, Phillies, Red Sox, Angels, White Sox, Cubs, Mets and Giants had the highest payrolls in baseball last season, which is no coincidence considering New York (two teams), Los Angeles (two teams), Chicago (two teams), Philadelphia, Dallas, San Francisco/Oakland and Boston are the top seven TV markets in the United States -- with New York and Los Angeles way ahead of the pack.
Nielson ranked the Twin Cities area 15th, but in reality this market should probably be slotted even lower -- perhaps as low as bottom-five among all MLB teams -- because Nielson market ratings don't include overall cable and satellite subscribers, which is an area the Twin Cities tends to rank lower in.
The Angels will reportedly earn $150 million per year from FOX Sports as part of a new TV deal that kicks in next season. For people praising Angels' owner Arte Moreno for stepping up to the plate and landing Albert Pujols and C.J. Wilson for a combined $331.5 million, those contracts are a lot easier to sign when such a lucrative TV deal glows on the horizon.
By comparison, the Twins' newest TV deal with FOX Sports North, according to sources, is worth approximately $29 million annually -- by no means bread crumbs, but a huge difference when competing for free agents.
Unlike in the NFL, where TV money is national and pooled, MLB TV revenue stays almost entirely with the local teams.
Perhaps most important factor in Pohlad's decision to draw a line in the sand, according to those close to him, is the uncertainty surrounding the team's two highest-paid players.
Don't take that the wrong way -- the Twins are optimistic about the progress Mauer and Morneau have made this offseason. They just want to see results before going all-in.
And that's the correct approach, because no sane business owner would pump excess money into a company or product in which its top two assets are huge question marks with guaranteed contracts.
Again, as a business owner, the question should be this: What will $115 million guarantee that $100 million won't? It all comes down to Mauer and Morneau, who could conceivably lead the Twins' offense to a massive resurgence if healthy and productive.
But without Mauer and Morneau -- or even one or the other -- the offense simply isn't likely to score enough runs, and the extra $15 million can't buy enough pitching to help a staff (and defense) that gave up 800+ runs in 2011.
No offense to Edwin Jackson and Ryan Madson.
Indications are ownership stretched the payroll in 2011 because the front office thought the team had a chance to build off its division championship from 2010. That obviously didn't happen, but indications are if the team is in contention this summer -- and if Mauer and Morneau bounce back -- the payroll can be stretched once again.
Until then, Pohlad and company are taking a wait-and-see approach.
As they should.