State of the Twins' payroll: Does the front office have any offseason spending room?

Last offseason, the Minnesota Twins’ owners cut payroll from $160 million to $130 million despite coming off a division title and the team’s first playoff success in two decades, halting what had been soaring fan morale.

And fans were right to lose interest and faith, as the Twins sank to fourth place in the American League Central thanks to the worst collapse in team history, going 12-27 down the stretch to miss the playoffs after a 70-53 start.

On the final day of the season, executive chair Joe Pohlad, the public face of ownership, held a rare group interview session in which he was repeatedly asked payroll-related questions. He evaded them all, and when pressed for specifics on the planned 2025 spending, he said: “I’m not going to get into payroll right now, but we will have a better product on the field next year.”

I asked #MNTwins owner Joe Pohlad about payroll and why the team is treated as just another typical business.

Here’s a full transcript of my question, his response, and two follow-up questions that I asked after hearing it. pic.twitter.com/wqHH7Hfxcx

— Aaron Gleeman (@AaronGleeman) September 29, 2024

Multiple team sources with knowledge of the situation insist the Twins do not plan further payroll cuts for 2025 and that spending will remain around $130 million, but Pohlad’s refusal to say it on the record is reason for skepticism. And really, “next season’s payroll won’t drop any further” is just a positive way to spin “this season’s payroll drop is the new normal.”

During the Twins’ final five seasons at the Metrodome, their payroll was 23 percent lower than the average MLB team. Fifteen years and one taxpayer-funded ballpark later, their 2024 payroll was … 24 percent lower than MLB average. And if the 2025 payroll stays around $130 million while the league as a whole increases, they’ll actually fall below Metrodome-era spending.

Working backward from $130 million, we can determine how much owner-imposed spending room the front office will have this offseason by looking at the Twins’ current guaranteed salaries, contract options and projected arbitration figures for 2025.

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Guaranteed contracts

As always, the starting point for any payroll discussion should begin with guaranteed salaries, of which the Twins have six for 2025 — two free-agent deals and four contract extensions.

One of the problems with cutting payroll by $30 million in 2024 and keeping that same spending in place for 2025 is that Carlos Correa, Pablo López and Byron Buxton were signed to long-term contracts when the front office was operating with a far larger budget. That trio is guaranteed $72.5 million in 2025, which fits a lot better within a $160 million payroll.

If the Twins went back to 2023 spending levels around $160 million, those three players would account for 45 percent of the team’s payroll, a high but manageable figure. But if the payroll stays in the $130 million range again, the trio would account for 56 percent of the payroll, leaving just $57.5 million to fill the other 23 roster spots.

Correa, Buxton and López can absolutely be worth $72.5 million for 2025. They were collectively far from their best in 2024, with Correa and Buxton injured for long stretches and López unable to duplicate his 2023 breakout, yet they still produced a combined 9.8 wins above replacement according to Baseball-Reference, which carries a standard valuation of $78.4 million.

But “standard valuation” assumes standard spending levels, and ownership moved the Twins out of that middle-class neighborhood. Similarly, decisions to guarantee $20.5 million to Christian Vázquez, Chris Paddack and Randy Dobnak in 2025 look even more regrettable now that the front office budget has been cut by 20 percent to “right-size” the business.

Correa, López, Buxton, Vázquez, Paddack and Dobnak are guaranteed $93 million in 2025, which would account for 72 percent of a $130 million payroll. Correa and Buxton both have a full no-trade clause. And it’s likely Vázquez, Paddack and Dobnak each have negative trade value relative to their deals, so the Twins would need to eat some money to facilitate moving them.

Contract options

Beyond the six guaranteed contracts, the Twins also have three contracts with options for 2025. One is a team option, which the Twins fully control, and two are mutual options, which must be exercised by both the team and the player in order to make the salary guaranteed.

They had a $3 million team option on Jay Jackson, but that was declined in June when the Twins released him, paying a $200,000 buyout.

Manuel Margot clearly isn’t worth $12 million coming off a poor season on both sides of the ball, so the Twins will decline their half of his option. And as part of the February trade to acquire him, the Los Angeles Dodgers are on the hook for his $2 million buyout.

Kyle Farmer turned things around after returning from a shoulder injury in mid-August, hitting .253/.297/.494 with five homers in 91 plate appearances down the stretch, but the Twins are all but certain to decline their side of a $6.25 million option and instead pay the 34-year-old a $250,000 buyout.

Jorge Alcala’s situation is a bit more complicated because the Twins likely want to keep him and because he’d still be under team control via arbitration even if the team option is declined. His arbitration projection is $1.7 million and the option is $1.5 million, with a $55,000 buyout, so for the sake of this exercise, let’s assume the Twins simply exercise the option.

Arbitration projections

This is where a higher level of uncertainty enters the picture.

After exhausting minimum-salaried years of service time, players become eligible for arbitration, which is designed to give sizable, built-in raises. If a team deems a player not worth the projected arbitration salary — possible examples of which you’ll see below — they can non-tender the player, at no cost, before the Nov. 22 deadline.

For the most part, though, the arbitration process generates owner-friendly salaries for in-their-prime players, most of whom are retained and can thus be counted alongside guaranteed salaries for bookkeeping purposes. This is an uncommonly big group of arbitration-eligible Twins players, in terms of quality, quantity and the projected salaries via MLB Trade Rumors.

Retaining all 12 of their arbitration-eligible players would cost the Twins an estimated $35.1 million — plus an additional $1.5 million for the arbitration-eligible Alcala’s option — but it’s safe to assume they won’t want to do that.

Most of the 12 players are well worth their projected salaries, although the Twins’ self-imposed payroll crunch could cause some of them to be viewed as cost-saving trade candidates who could bring back solid value.

Michael Tonkin is a non-tender candidate after bouncing around the waiver wire all year. Alex Kirilloff’s inability to stay healthy could make the Twins move on from the 26-year-old former top prospect despite a modest $1.8 million projection. Similarly, they may see Justin Topa as too much of a risk for $1.3 million after he missed all but the final week of the season with a knee injury.

Bottom line

There is $93 million in guaranteed money on the Twins’ books for 2025, plus no less than $30 million and as much as $37 million in projected salaries for arbitration-eligible players. Add in $760,000 minimum salaries to fill out the remaining 26-man roster spots, and the baseline payroll is $130-$135 million.

All of which brings us to the obvious problem: If the Twins are claiming they’ll have a 2025 payroll around $130 million and the current roster, without any additions, is projected to cost $130-135 million, they have no spending room and may even need to shed salaries to do anything this offseason.

League-wide spending tends to rise 5 percent to 10 percent each season. If the Twins were even at the lower end of typical year-over-year payroll growth after spending $160 million in 2023, they’d be in the $180 million range for 2025. Instead, they’re not publicly promising to be around $130 million.

While that would certainly be better than another payroll drop, it’s still $30 million less than the Twins spent in 2023 and $50 million below where they should be relative to the league. Rather than having $50 million to improve the current roster, they have nothing. And maybe less than nothing.