One direct result of the 2020 schedule shrinking from 162 to 60 games, all of which were played without ticket-buying fans in the stands, is that MLB team revenues crashed and 2021 payrolls are likely to shrink.
It’s unclear whether most teams will look to slash payroll to recoup their 2020 losses or simply move forward with similar payroll levels, but it’s safe to assume league-wide spending will be stable at best and significantly reduced at worst.
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In the Twins’ case, because ownership was willing to retain all full-time staff while other MLB teams were shedding employees due to COVID-19, there’s some hope that the Pohlad family will take a similar approach to 2021 payroll.
“We’ve been supported throughout this pandemic on so many levels with our staff, with our internal people,” Twins president of baseball operations Derek Falvey said.
“We have not laid off a single employee,” Twins president Dave St. Peter said. “We have all of our scouts, all of our player development people, all of our front office people. That doesn’t happen without the Pohlad family.”
However, the baseball operations department has yet to receive official word on their 2021 spending limits, and the front office is proceeding with caution after setting a franchise record with a $140 million opening-day payroll this season.
“We recognize there are unique circumstances that played out this year,” Falvey said, “and some uncertainty, as we progress through this offseason, as to what the beginning of 2021 will look like as well. We all have to be reflective of what has transpired, not just obviously in our sport and our business, but everywhere. That may play some role, but I don’t have a final answer on that yet.”
Payroll size is a key factor in determining every team’s path every offseason, but it’s especially important for the Twins going into this winter. Not only do they have nine departing free agents, including Nelson Cruz, most of the Twins’ top hitting prospects being close to the majors means they could get much younger and much cheaper in a hurry if necessary.
But will it be necessary? Let’s take a deeper look.
Guaranteed contracts
No team is in a great financial position following a 60-game season played with zero fans and significantly reduced revenue, but the Twins are fortunate to have pretty clean books, relative to the other 29 clubs.
They’ve avoided big long-term contracts other than signing Josh Donaldson to the largest free-agent deal in team history last winter, and even with his $21.75 million salary leading the way, the Twins have just $56.75 million in guaranteed salaries for 2021.
| PLAYER | SALARY |
|---|---|
$21.75M | |
$11M | |
$10M | |
$6.5M | |
$4.35M | |
$3.15M | |
 TOTAL | $56.75M |
That figure is somewhat misleadingly low, because in addition to the six players listed above with guaranteed salaries, the Twins would still have to fill out their roster with minimum-salaried players, bringing their true lowest possible 2021 payroll closer to about $70 million.
Also of note: Kenta Maeda’s contract, while guaranteed for just $3.15 million, includes millions in reachable incentives, raising his realistic 2021 salary floor.
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Contract options
In re-signing Sergio Romo to a one-year, $5 million deal last winter, the Twins also secured a $5 million team option or $250,000 buyout for 2021.
| PLAYER | SALARY | BUYOUT |
|---|---|---|
$5M | $250K | |
| TOTAL | $5M | $250K |
Other than aging a year, Romo’s performance and short-term outlook didn’t change much in 2020, making a $5 million salary very reasonable for a veteran setup man, particularly with fellow right-handed setup men Tyler Clippard and Trevor May being free agents. However, if the Twins are looking to conserve or even trim payroll, Romo could be viewed as an expendable luxury item.
Departing free agents
Cruz headlines nine Twins free agents, and together they accounted for $59.6 million in guaranteed 2020 salaries prior to the shutdown and the abbreviated season. (Incentives raised Rich Hill’s salary higher than $3 million.)
| PLAYER | SALARY |
|---|---|
$17.8M | |
$12M | |
$9M | |
$7M | |
$4.25M | |
$3M | |
$2.75M | |
$2.2M | |
$1.6M | |
| TOTAL | $59.6M |
Last offseason the Twins were able to bring back free agent Jake Odorizzi on a one-year contract when he accepted the $17.8 million qualifying offer, but each player can only receive the qualifying offer once. Cruz is also ineligible, having gotten (and turned down) one already from the Rangers in 2014. None of their other free agents are qualifying-offer caliber, so it’ll be nine clean departures.
Re-signing Cruz will be a priority for the Twins, and they also figure to have some interest in bringing back several of their free-agent pitchers, but for now those salaries are wiped from the books and have no impact on 2021 payroll.
Projected arbitration salaries
This is where payroll projections get tricky.
After completing three minimum-salaried years of service time, players become eligible for arbitration, which is designed to give sizable, built-in raises to now-veteran players getting closer and closer to free agency. If a team deems a player not worth the projected arbitration salary — a possible example of which you’ll see momentarily — they can simply cut them before the December deadline.
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For the most part, though, the arbitration process creates team-friendly salaries for in-their-prime players, most of whom are retained and can thus be counted alongside guaranteed salaries for book-keeping purposes.
This offseason, the Twins will have seven arbitration-eligible players, with the following loose salary estimates for 2021.
| PLAYER | SALARY |
|---|---|
$10M | |
$7M | |
$6M | |
$5M | |
$2.5M | |
$2M | |
$1.5M | |
| TOTAL | $34M |
Those figures are quick-and-dirty projections, so they could be off by a million dollars or more in some cases, but the overall picture painted should be close to accurate. If the Twins keep all seven arbitration-eligible players, they would add around $34 million to the 2021 payroll.
Eddie Rosario, projected for $10 million in what would be his last arbitration-eligible season prior to becoming a free agent, is very much not a sure thing to be kept at that number. He hit .257/.316/.476 in 57 games this season, right in line with his .277/.310/.478 career mark, and Rosario’s combined .800 OPS for 2018-2020 was just slightly above the league average of .774 for left fielders.
For many teams, in many situations, paying $10 million for an average-ish 29-year-old corner outfielder one season away from free agency would make sense. But for the Twins, in 2021, payroll space could be at a premium, and they have several top prospects close to being major-league ready — Alex Kirilloff, Brent Rooker, Trevor Larnach — who could play left field for $600,000.
Taylor Rogers is also potentially a non-tender candidate if the payroll crunch is severe, although his projected $6 million salary is more reasonable and cutting him could have longer-term ramifications since he’s two years from free agency rather than Rosario’s one. Everyone else listed above should be a no-brainer to keep at their projected arbitration salaries.
Bottom line
If the Twins keep Romo and all seven arbitration-eligible players, their baseline payroll — without re-signing any free agents — would be roughly $104 million for a 28-man roster. If they cut Rosario, it would be around $95 million. If they cut Rosario and Romo, it’ll be $90 million. And it they part ways with Rosario, Romo and Rogers, it’ll be $85 million.
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Prior to the shutdown, this season’s opening-day payroll was a franchise-record $140 million, 17th-highest in baseball. Maintaining that figure would leave the Twins with plenty of spending ability. They could pick up Romo’s option and retain both Rosario and Rogers, plus re-sign Cruz for a 2021 salary around $15 million, and still have $20 million to spend.
However, if ownership orders a decrease in payroll, which teams across baseball are bracing for in the wake of massive revenue losses this season, that spending room would vanish in a hurry. Even a 15 percent payroll reduction, from $140 million to $120 million, would leave the Twins all but out of space if they kept and/or brought back Cruz, Rosario, Romo and Rogers.
Of course, if the Twins are told to cut payroll, then it’s likely that most other teams would have received similar orders, at which point a $10 million salary for Rosario would become untenable and even stars like Cruz would be facing difficult free-agent markets. If payroll remains relatively stable, the Twins will be in good shape. If payroll drops, they’ll have several tough decisions to make.
(Photo of Eddie Rosario: Hannah Foslien / Getty Images)