{"id":545971,"date":"2026-01-30T14:56:17","date_gmt":"2026-01-30T14:56:17","guid":{"rendered":"https:\/\/www.rawchili.com\/mlb\/545971\/"},"modified":"2026-01-30T14:56:17","modified_gmt":"2026-01-30T14:56:17","slug":"money-matters-part-2-have-the-pohlads-solved-their-debt-problems-twins","status":"publish","type":"post","link":"https:\/\/www.rawchili.com\/mlb\/545971\/","title":{"rendered":"Money Matters, Part 2: Have the Pohlads Solved Their Debt Problems? – Twins"},"content":{"rendered":"

\n\tIn Part 1 of this mini-series on the finances of the Twins and their small shift in ownership, we studied the two new investment groups<\/a> heavily betting on the team. The other question worthy of our attention is how much of the Pohlads’ debt is truly gone, thanks to this deal. It is certainly true that the debt for the team got out of hand at $500 million, though even that was not the highest in baseball.\n<\/p>\n

\n\tThere are plenty of reasons for teams to hold debt. If you look at the Atlanta Braves\u2014the only team traded on a public market, which requires financial disclosures and quarterly earnings<\/a>\u2014you can see that they have $759 million in debt spread across its investments, though $483 million of that is related to the development of The Battery, their ballpark-adjacent real estate boondoggle.\n<\/p>\n

\n\tThe reason many teams like to hold debt is that MLB-backed debt is unique<\/a>. While sports owners can often get lucrative deals on debt from banks, the leagues as a whole can secure even bigger ones<\/a>. Currently, the Braves have $67.5 million in debt with the league at competitive rates: $30 million at a 3.65% interest rate and another $37.4 million at 5.4% and 5.71%. These payments to the league are at much better rates than the rest of their debt. Fitch Ratings assigned the debt an \u201cA\u201d rating,<\/a>\u00a0saying the Braves have a\u00a0\u201cstable revenue profile due to national media and shared league-level revenue streams, and they are insulated from the local media market.\u201d\n<\/p>\n

\n\tThe problem, for the Twins, was that the amount of debt\u2014even with a mix of debt at favorable interest rates\u2014likely meant one of two things. First, that meant almost certainly eating profits. If the Braves earned $66 million in their baseball team over the last year (with a notably good TV deal from Diamond Sports Holdings, as well as the All-Star Game), the Twins almost certainly earned less. And if $27.5 million is going just to cover interest, that makes things complicated. Besides,\u00a0the Internal Revenue Service has noted that it will do more investigations of teams with<\/a> \u201csignificant tax losses, and review whether the income and deductions causing the losses are reported in accordance with the tax rules.\u201d Given the administration’s penchant for investigating<\/a>\u00a0personal enemies\u00a0and the Pohlads\u2019 political donation history<\/a>, giving the administration an excuse could be a bad idea.\u00a0\n<\/p>\n

\n\tSecondly, MLB does have rules about debt. Under the CBA with the MLBPA<\/a>, \u201cTeams are not allowed to hold debt more than eight times operating income, or twelve times for teams with new stadiums.\u201d However, the league has always had a number of teams in violation of this term<\/a>, and the Players Association has done little to combat it. The only time the league has used the rule was to force Frank McCourt to sell the Dodgers, which had more to do with their dislike of McCourt<\/a>. This was a less vital and urgent consideration, then, but it did demand the team’s attention.\n<\/p>\n

\n\tDid the Twins get rid of all their debt? Probably not, but that’s fine. Debt at low interest rates is good, when you can make money elsewhere by spending what you’ve borrowed. When the Pohlads imagined their future in 2019, it was likely using profits from real estate to cover any extra debt from the team. That just never materialized. But as long as the team can cover its interest payments and give itself some wiggle room to head toward profit, there is no reason to eliminate all the debt at once. That might mean that part of the investment is the reason why the Twins have spent more on payroll this winter than many predicted.\n<\/p>\n

\n\tThe question is: what does the team making a profit really mean, short-term and long-term? The Dodgers make a profit, and so do the Pirates<\/a>. Only one of those teams relies on winning. As long as revenue-sharing agreements benefit teams that spend very little, the Twins may find themselves in the black by remaining in the $110 million range, rather than the $130 million or $160 million range. Fans would find that unhelpful, and distasteful\u2014and rightfully so.\n<\/p>\n

\n\tAll of this leads me toward two speculative predictions:\n<\/p>\n

\t\tThe various partners think there are benefits to getting the Twins back in shape, both financially and (to an extent)\u00a0on the standings page. That might not be done by immediate spending on payroll at levels commensurate with the media market, but by the same kind of moderate spending that produced winning teams in 2019 and 2020, rather than 2023. The Victor Caratini<\/a> deal is a good example. If Ryan Jeffers<\/a> posts around the same WAR as last year, he will certainly be making anywhere from $10 million to $20 million a year when he hits\u00a0free agency. The Twins already know what they owe for their primary catcher in 2027: $7 million.\u00a0<\/p>\n

\t\tMore importantly, I do not think these minority owners expect to be in it for the long term. The Pohlads will almost certainly jump back into the market following the new collective bargaining agreement\u2014whether or not there is a salary cap\u2014and\u00a0the signing of new media rights deals after 2028. With the collapse of Bally Sports Networks FanDuel Networks Diamond Sports Holdings Main Street Sports<\/a>, the league is almost guaranteed\u00a0to have a majority of team rights by that time; Manfred believes he can gain all of them<\/a>. That will likely mean the league can sign a long-term agreement,\u00a0cementing profits that are well-distributed throughout the league.\u00a0If the team valuation inflates even further, the Pohlads will have a chance to get the truly bonkers number they sought but couldn’t find this time. If anything, Tom Pohlad’s goodwill tour<\/a> is about raising\u00a0the profile of the team, so as\u00a0not to leave a cultural hole in the ground for the next set of owners, because people pay more for teams whose fans like them.<\/p>\n

\n\tLike many, I found the announcement of the Pohlads ending their potential sale to be more dismaying than the fire sale of the trade deadline. Yet, I think there is perhaps a rainbow at the end of this dark tunnel. Sports fandom is built on pain<\/a>. What’s a few more years of it?<\/p>\n","protected":false},"excerpt":{"rendered":"In Part 1 of this mini-series on the finances of the Twins and their small shift in ownership,…\n","protected":false},"author":2,"featured_media":545972,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2388],"tags":[5,822,60,3190,4,24911,148],"class_list":{"0":"post-545971","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-minnesota-twins","8":"tag-baseball","9":"tag-minnesota","10":"tag-minnesota-twins","11":"tag-minnesotatwins","12":"tag-mlb","13":"tag-pohlad-family","14":"tag-twins"},"share_on_mastodon":{"url":"https:\/\/channels.im\/@mlb\/115984635287590102","error":""},"_links":{"self":[{"href":"https:\/\/www.rawchili.com\/mlb\/wp-json\/wp\/v2\/posts\/545971","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.rawchili.com\/mlb\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.rawchili.com\/mlb\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.rawchili.com\/mlb\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.rawchili.com\/mlb\/wp-json\/wp\/v2\/comments?post=545971"}],"version-history":[{"count":0,"href":"https:\/\/www.rawchili.com\/mlb\/wp-json\/wp\/v2\/posts\/545971\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.rawchili.com\/mlb\/wp-json\/wp\/v2\/media\/545972"}],"wp:attachment":[{"href":"https:\/\/www.rawchili.com\/mlb\/wp-json\/wp\/v2\/media?parent=545971"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.rawchili.com\/mlb\/wp-json\/wp\/v2\/categories?post=545971"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.rawchili.com\/mlb\/wp-json\/wp\/v2\/tags?post=545971"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}