Forbes magazine published its annual “Business of Baseball” on Forbes.com on Wednesday and the Minnesota Twins rank pretty much right smack dab in the middle of the pack in just about every financial category that Forbes measures.
The Twins rank 14th among the 30 MLB teams in terms of the team’s value, 15th in operating income ($16.6 million), and 13th in team revenues ($213 million). By the way, based on that revenue figure and the estimated $113 million the team shelled out for Major League salaries last season, it would appear that the Twins paid out 53% of revenues for player salaries, which is pretty much exactly what they claim the try to do annually.
The team’s value increased just 4% over 2010, which ranked them ahead of only three other MLB teams. The Royals’ increased their value just 1%, while the Rays and Mets actually saw their values drop. On average, MLB teams saw their values rise 16%.
What’s holding the Twins back? It doesn’t take a rocket scientist to figure it out. It’s all about the TV money, folks. The teams that are seeing their revenues (and thus their values) rise are those milking significantly more income from broadcast deals. More teams are getting a cut of profits from the Regional Sports Networks that carry their games, while the Twins are getting comparative peanuts from Fox Sports North. That doesn’t bode well for the Twins’ ability to keep up with other teams’ ability to pay players.
The refrain fans heard from the Twins during the 15 years or so before the opening of Target Field was that the Twins needed the new stadium in order to realize similar revenues to those teams that already had their new stadiums. Now, with those revenues flatlining, the story is broadcast revenues.
As the Angels, Rangers and even the Padres are beginning to join traditional big revenue teams like the Yankees and Red Sox at the top of the list of high income teams, it’s obviously not going to take long for the Twins to fall behind on the competitive balance curve again unless they can find a way to wring more money out of FSN.
I’m going to go over the numbers in more detail over the next day or two and may post a bit more if anything interesting comes out of that analysis, but if you’d like to see the list for yourself, just click here to go to the Forbes site.
Information specific to the Twins is found here.
– JC
It’s always something. Used to be the stadium.
I’ll be curious to read your take on the TV stuff. I have read a few varying accounts of what the Twins actually receive in terms of money, and how long the deal actually is. It took a while to get Target Field, and the TV contract (I think) doesn’t expire very soon. it would be nice if the organization had the foresight to be on the cutting edge of whatever the next revenue-generating trend will be. Easier said than done, I’m sure.
Pingback: Links of the Day 3/22/12 | The Rhino and Compass
I was really disheartened when I read St. Peter’s tweets that the FSN deal had been renegotiated and extended (still not sure at what point that was done) — I had hoped that a new TV deal would be an increased revenue source as the newness of Target Field faded.
I thought you gave some figures on the TV contract in another column. In thinking about it, it seems to me that the size of the deal must be taking a lot more than just market size into account. They must also be discounting the TV rights value due to demographics — an older audience and less disposible income than in many other markets. That’s the only way I can account for the limited size of the Twins deal with FSN. If it were market size alone, I would expect the revenues to be significantly higher.
But it does indicate to me that the Twins will be struggling to keep revenues growing.