Bankruptcy no threat for cash-flush Twins

Posted on February 13th, 2009 – 1:44 PM
By Joe Christensen

Veteran Star Tribune reporter Randy Furst covered Wednesday’s press conference, as the Twins unveiled plans for Target Plaza, the gateway to their new ballpark, which opens in 14 months.

Furst had questions about the cost, at one point asking how the Twins felt unveiling such an “ostentatious” plan in this troubled economy.

“Randy, you’ve really gotta let this money thing go,” said Jerry Bell, president of Twins Sports, Inc. “Not every company is bankrupt.”

Ouch.

These are tough times for newspapers, no doubt. The Star Tribune is trudging through Chapter 11, even though readership is at an all-time high, between print and online.

Meanwhile, the Twins are practically recession-proof.

Though they’ve done almost nothing to improve last year’s team, their season ticket sales are at an all-time high, as fans angle for priority seating at Target Field.

Hennepin County committed $392 million to the ballpark project, through a sales tax increase, with the Twins paying $130 million, along with any cost-overruns. (The plaza will cost nearly $9 million, with the price split between the Twins and Target.)

Franchise value soars

Last week, Twins CEO Jim Pohlad described why his family has no plans to sell the team, even after his father’s recent death.

“It’s a community investment,” he said. “It will be a good investment. It hasn’t so far been the best, but we have confidence in it for the future.”

As well they should. Major league franchises are gold mines.

This month, a group led by Jeff Moorad purchased the San Diego Padres for more than $500 million. John Moores had bought the club in 1994 for $84 million before San Diego helped build a new ballpark.

Forbes magazine estimates the value of every baseball franchise each year, and owners scoff at the inflated estimates. Last April, Forbes put the Padres at $385 million, an apparent underestimate. The magazine had the Cubs at $642 million, and they recently sold for $900 million.

One can guess the Twins’ estimate — $328 million — was low, as well. Carl Pohlad’s purchase price, in 1984, was $44 million.

Indeed, not every company is bankrupt. But some have been handed incredible advantages.

Besides the public support for their new ballpark, the Twins also collect millions annually from MLB’s revenue sharing and luxury tax plans, and many millions more from the game’s national TV, radio and Internet deals.

Payroll still down

Still, after letting their payroll reach $74 million in 2007, the Twins let that number dip to $57 million last year, and their current 25-man Opening Day projection is $60,452,000.

Every nickel counts, too.

Under the collective bargaining agreement, the Twins had a right to cut Delmon Young’s salary by 20 percent this year. Including his pro-rated signing bonus, he made $1,440,000 last year, so the least the Twins could pay him was $1,152,000.

On Thursday, the Twins signed Young for that amount, exactly.

They also pulled a $3 million offer to free agent reliever Eric Gagne, eventually settling on a $1.3 million deal for Luis Ayala.

Hey, it’s business. Not personal.

Now, they seem to have the market cornered for free agent third baseman Joe Crede. The only other team reportedly bidding is the Giants, who have a promising third baseman in Pablo Sandoval, who batted .345 last year in 145 at-bats.

Crede, 30, wants a one-year deal with a base salary of about $7 million, with incentives that would pay him at least $11 million if he stays healthy.

He was an All-Star last year but a back injury limited him to 97 games, after he played just 47 in 2007.

No doubt, he’s an injury risk. But even with all their payroll room, their lack of home run power and their untested platoon of Brendan Harris and Brian Buscher at third base, it’s a risk the Twins are in no rush to take.

In their thinking, Crede’s agent, Scott Boras, is in denial about the market. They’ll show him.

See, it’s not enough for the Twins to operate from a position of strength. Sometimes they like to rub it in.

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