You’re running the Minnesota Twins ‘like a business,’ you say?

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Minnesota Twins Executive Chair Joe Pohlad recently reiterated, for the umpteenth time, that the organization fans love so passionately must be run as a business. The Pohlad family has used this phrase so frequently in the last 30 years that it ought to consider trademark protections.

Unfortunately, how the Pohlads view running a business is as flawed as this year’s version of the Minnesota Twins bullpen, which is why the Pohlad family’s overuse of this well-worn trope is an insult to business owners everywhere.

Without being privy to the Pohlad family business plans, from an outsider’s perspective the family prioritizes profit over everything else. Dickens’ own Ebenezer Scrooge would likely be called soft at a Pohlad family reunion.

The family does not disclose financial information for the team, but Forbes and various other entities provide estimates. Estimated profit margins confirm that the family has failed to achieve an operating income of at least $14 million in only five of the last 17 years. It is important to note that two of those five years occurred during the pandemic, when individuals were restricted in their ability to attend games in person. Even if the estimates are slightly off, the family does not lose money when it comes to annual operating income.

During that same time frame, the Twins won exactly one playoff series. One. Last season’s series win over the Toronto Blue Jays was supposed to represent a dramatic pivot for this organization. The championship window was not just opening, it was being blown ajar by a wave of exciting young talent and high-end veteran talent. The family was going to financially commit to improve upon that success and take the Twins to the rarefied air of being a World Series contender.

Instead, going into this season, the Pohlad family cut payroll by $30 million (essentially 20%), likely to preserve that precious operating income it monitors so closely. This decision highlights the family’s most obvious and consistent failure regarding how a business should be run.

What the Pohlads do not understand — that a first-year Carlson School student could understand all too well — is that profit margins and operating income are not everything. Building a quality brand that consumers can rely on will typically increase market share, consumer base and the price point at which consumers expect to pay. Those factors are what will ultimately drive the value of said business — what ultimately will make it worth more. Just ask that same first-year Carlson School student to expound on the merits of the Netflix business model and how that firm significantly increased its value with strategic spending.

For confirmation of this phenomenon in Major League Baseball, one need only turn attention to the Cardinals of St. Louis, Mo. In a market even smaller than the Twin Cities, the Cardinals organization has made a commitment to spending for the last 20 years. During that time period, the team has consistently made the playoffs and won two World Series titles. From a valuation perspective, Forbes currently values the Cardinals at $2.55 billion. Meanwhile the Twins, despite being in a market larger than the Cardinals are, with double the number of Fortune 500 companies, are valued at $1.46 billion.

That billion-dollar delta between the two organizations is a stark indictment of the job that the Pohlad family has done for the last two decades. Imagine the level of delusional that you must have to believe that it is smarter to attempt to squeeze $15 million out of a firm vs. committing those same funds to generate hundreds of millions and potentially a billion dollars. Instead of committing resources to ensure a quality brand, the Pohlads have opted to destroy fan loyalty on the altar of preserving profitability. Not only is it an abuse of the fans, but it is nonsensical from a business perspective, and any Minnesota business owner could see the flaws in the family’s approach.

The Twins are currently projected to have an operating income of $19 million for 2024. The television deal for 2025 is uncertain, and many are speculating that this means even further cuts to payroll could be on the horizon. Choosing to spend $19 million on the Twins this year almost certainly would have resulted in the Twins making the playoffs. That would have ensured a piece of the playoff pool and likely increased season ticket prices for 2025. Another year in the playoffs would have also meant continued success and further rehabilitation of the miserly narrative that the family has earned so well the last two decades.

Instead of making that $19 million commitment, which represents approximately 1.3% of the value of the organization, the Pohlads opted for the Ebenezer Scrooge approach (before his parlays with the paranormal).

If the family truly wanted to run the business like a business and maximize return on investment, it would be better off selling the team and investing the proceeds in a Vanguard fund. Even after paying some taxes on the sale, the return on that investment would be significantly higher than what has been generated to date — and even more reliable, as it would not be contingent on the Twins offense scoring more than three runs.

Given that unlikely scenario, it would seem that business owners everywhere should just prepare to be insulted on a semiannual basis when it comes time for the family to explain how their crackpot strategy is responsible for yet another Twins collapse.

Benjamin A. Wagner is a Twin Cities-area tax attorney.