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Pohlad’s Avoided Sale of MN Twins to Have New Investors Pay Down Debt
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- Pohlad’s Avoided Sale of MN Twins to Have New Investors Pay Down Debt
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We are more than two weeks from the Pohlad-mandated teardown at the trade deadline. The roster was gutted , and future payroll was slashed mightily. Among the most eye-opening moves was paying $30 million to rid $70 million of future cash commitments to Carlos Correa.
In the wake of it all, the Pohlad's then decided to take the Minnesota Twins off the market and keep controlling interest. Of course they spun it as a positive and have tried to prop up their two, yet-to-be-named, new investors .
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If it looked like little more than a cash grab for an ownership entity that sorely needed it, well, that's because it was.
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Minnesota Twins could have sold, but Pohlad's didn't want to
When the MN Twins went on the market last October there was much rejoicing. Without knowing who the next owner could be, the hope was always that anyone else can't be this bad. Carrying more than $400 million in debt , plenty not related at all to baseball, the team simply wasn't as marketable.
As that became clear to the current owners, the focus shifted towards lifting the boat anchor. The Athletic's Aaron Gleeman was not at all blunt in a recent Gleeman and the Geek episode .
"It's more clear than ever to me that the could have sold it. They didn't consider them good enough offers. But they received, or would have received lets say, what would have been considered by the rest of baseball, market rate offers. $1.4, $1.5B something like that. Joe Pohlad didn't want to give up the team. This was a better scenario because they can get $500M without giving control of the team…They absolutely chose this path of chunks of minority ownership to get money to pay down the debt over selling the team. It wasn't a situation where they could not get $1.5B for they team and so they pivoted. It's a situation where they chose this path actively over that"
We can debate whether or not $1.5 billion should have been enough to make a deal work. Major League Baseball probably would have preferred to avoid that. The goal is to always have the water level raising. The Tampa Bay Rays are selling for $1.7 billion , and recent valuations had them below Minnesota.
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The Pohlad's magic number was $1.7 billion. Given the Rays got that amount, theoretically they should have too. However, the Rays (at least not according to any reports) weren't carrying massive amounts of debt either.
Dan Hayes and Britt Ghiroli of The Athletic reported that the minority shares sold by the Pohlad's were completed at a higher valuation than $1.7 billion. That is much more feasible though when it's coming in at a significantly smaller chunk of the franchise.
Ultimately though, this continues to boil down to a worst case scenario. The Pohlad family put the Twins up for sale. They couldn't find a buyer and their ask was too rich. Rather than pivot, they just found a pair of entities willing to buy their debt in exchange for a seat at the table.
Related: Rocco Baldelli Takes Responsibility Minnesota Twins Bosses Won't
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Unless the two new parties are going to be both publicly identified, and actively interacting with the operation, there's little reason to believe the future will be more than status quo. Joe Pohlad and Derek Falvey want you to believe this is all a good thing.
Guess what? It's not.
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