Following one of the most challenging seasons in baseball’s history, the sport is headed into one of its most challenging offseasons.
It was learned this week that this pandemic-riddled season cost the industry $3.1 billion in revenue. The league did execute a 60-game season while navigating virus outbreaks on the Cardinals and Marlins. It then completed an entire postseason, with the Dodgers vanquishing the Rays in six World Series games. The league was able to generate some television revenue, although the ratings were at an all-time low.
Now the sport trudges into an offseason that will be a tough one for teams and free agents. Many teams lost more than $100 million in 2020, and they could turn around and slash payroll by as much as 15 or 20%.
The Twins would like to retain some of their free agents — they entered contract negotiations this week with designated hitter Nelson Cruz, for example — and would like to boost their pitching staff. But they also are mindful of the current financial landscape.
“It has been very painful from a cash standpoint,” Twins owner Jim Pohlad said. “But that will be in the past. And now we have to figure out to what extent, if any, is that going to reoccur in 2021?
“Yes, I believe there will be fans in the ballpark, but I can’t tell you when or at what level, I just don’t know. I don’t think the fact that we lost money in 2020 — which we did, and we are right in the middle of that pack — I don’t think that’s the driver for what we are going to do in 2021.”
But there’s a better chance that the Twins’ $132 million payroll in 2020 will head down than up.
“There is uncertainty,” Pohlad said. “And we are going to have to figure out an ‘uncertainty discount,’ and we will.”
Baseball is a business
To understand how teams have been affected by the economic downtown, look at the growing list of people now unemployed. Many clubs laid off or furloughed employees during the shutdown. The Pittsburgh Pirates froze pension plans. Teams then operated the shortened season with small staffs. And another round of reductions has begun.
Since the end of the season, Baltimore, Boston, the Chicago Cubs, Detroit, Houston, the Los Angeles Angels, Oakland and San Francisco have laid off or furloughed employees. The Cubs laid off more than 100.
Twins employees have worried about the ax falling on them. But they benefit from the Pohlad family’s diverse holdings that help absorb such a financial hit as well as their commitment to supporting their own. The Twins were one of a few teams to not lay off staffers and commit to paying their minor leaguers through the end of the season.
Pohlad, who refuses to be pessimistic in the face of the pandemic, said there are no plans for layoffs.
“The pandemic is hard on everybody, and we have to have some degree of compassion and empathy in that regard as how difficult it is on individuals,” Pohlad said. “If we are able to continue to pay people, we want to do that. It is a cultural philosophy.”
Pohlad said he hasn’t gotten over the Twins’ first-round playoff loss to the Astros. Derek Falvey, Twins president of baseball operations, said Thursday that the sleepless nights have piled up as he figures out how the push the roster to the next level — a more difficult task in this pandemic offseason.
Who stays? Who goes?
Keep in mind that no one knows what the rules of offseason engagement are. Will there be 26-man rosters? What are arbitration guidelines: status quo, or discounted because of the shutdown? Will there be a run at making the designated hitter universal? That would give Cruz, who wants a two-year deal but might get just a one-year offer from the Twins, more teams to be courted by.
“We’re going to feel out and see where the market is,” Falvey said, “and try to make the best decisions we can.”
If the Twins are in the group of teams trimming payroll, it could mean the end of Eddie Rosario’s run with the club. Rosario, who made $7.75 million in 2020, could earn $9 million-$11 million in 2021 through arbitration. There’s a debate whether he is worth that salary, as well as the belief that Alex Kiriloff is ready for prime time. Rosario hit .257 with 13 home runs and 42 RBI this season (that’s a pace of 35 homers and 113 RBI over the usual 162 games). Rosario could be part of a large group of players who are non-tendered contracts by Dec. 2.
The Twins already have declined Sergio Romo’s $5 million option, and their pitching staff could be in the midst of a makeover. Rich Hill, Jake Odorizzi, Tyler Clippard and Trevor May are free agents. Of that group, the Twins would be best served by bringing back Odorizzi and May. Odorizzi accepted the Twins’ qualifying offer of $16.8 million this season, $6.5 million in prorated salary. May was scheduled to make $2.2 million.
Would Odorizzi accept a one-year deal at $8 million? Would May come back for half of that or see if his high strikeout rate gets him more elsewhere? Will a market flooded with free agents drive down prices?
While this year’s market is unpredictable, it’s predictable that some clubs will be timid about wading deep into free-agent waters.
When asked if the Twins are positioned for a splashy free-agent move, Pohlad said: “We could, but we don’t know what the market for such a player is going to be. In a sense there has been, in my view — and I’m not speaking for the players or the union — there has to be some degree of risk sharing here.
“Basically the owners bore the entire brunt of the short season. The players got their prorated salary for the games they played in. In terms of lost revenue, they bore no risk to it. But they were cooperative in getting the games started, and that’s a big deal. Going forward, it just comes about as a result of a depressed market that is, in effect, players bearing their share of the risk also.”
The warning sides are out there. Just this week, the Cardinals declined to pick up the $10 million option on Gold Glove second baseman Kolten Wong. And Cleveland placed All-Star closer Brad Hand on waivers instead of activating a $10 million option.
The cost cutting might just be starting.
“We have been dealing with unprecedented times for several months,” Twins President Dave St. Peter said, “One of the things I am proud of is the ability of Derek and our baseball group as a whole to be nimble. I think this offseason, it is difficult to see how things are going to play out. We are going to have to be opportunistic, and that’s also a trait this front office has.”