What Cardinals ownership says about the team’s budget doesn’t stand up to simple math
Doing the math a few times in a row doesn’t make it make any more sense than yesterday. Your calculator isn’t lying to you. Something in how the St. Louis Cardinals are describing their new direction doesn’t add up.
The Cardinals plan to cut payroll in 2025, lame duck president of baseball operations John Mozeliak emphasized during Monday’s press conference.
No one was quite prepared to give details about that cut, the players it might affect, or even what next year’s roster might look like. Team president Bill DeWitt III deferred a question regarding reasonable on-field expectations to Mozeliak. Mozeliak declined to answer.
The team’s anointing of Chaim Bloom as Mozeliak’s successor came with a promise that he would spend next season fully rebooting the club’s faltering player development operation and that work there was already underway.
“Our No. 1 priority will be to lay the foundation for a sustained period of competitive excellence in the years ahead,” chairman Bill DeWitt Jr. said during his opening remarks.
What, exactly, precludes the Cardinals from laying that foundation while remaining competitive in the short term? A team that just won 83 games has just two significant free agents this winter without team control – a first baseman who was a below-league-average hitter and who accounted for less than 1.5 wins above replacement, and setup reliever who is on record as being eager to re-sign.
The answer, as ever, appears to be “money.” And that portends yet another troubling concern for both the short- and long-term future of the franchise.
This ownership group purchased the Cardinals in 1995 for $150 million dollars, and a year later, spun off the parking garages which were part of the transaction for $75 million. The most recent Forbes valuation of the team clocks their current value at $2.55 billion, good for a tidy $1.8 billion in appreciation on the underlying asset over the last 30 years.
That value doesn’t include Ballpark Village, which the team has long insisted operates independently. Team president Bill DeWitt III was emphatic on Monday that the team expects a dip in revenues for 2025, thanks both to concerns about the local television contract and a dip in attendance.
The attendance dip is real and seems unlikely to reverse trend in the coming years, but it’s hard to take concerns about the television rights deal seriously when the team received its full anticipated payment from Diamond Sports in 2024. While the future may be uncertain, the most likely path forward is that teams and the league receive a larger, controlling stake in the profits generated from their broadcasts in the years to come.
DeWitt III also alluded to the likely coming legalization of sports betting in Missouri, from which the Cardinals expect to profit handsomely. By the time fans return to Busch Stadium next spring, they will almost certainly be able to bet from their phones, and might even be able to stop by a brick and mortar sports book just across the street in the completely-separate-from-the-team entertainment complex which bears all of their branding and houses their Hall of Fame.
“We’ve got a long offseason to work through a bunch of things relative to budgeting for our revenues,” DeWitt III said. “Obviously we know that the payroll ends up being a function of revenues, not directly, but loosely.”
And yet in May, DeWitt III said in a podcast interview that, “we just turn this revenue machine into a payroll machine. I mean that’s what this is, this business. We try to drive as much revenue as we can, and then it gets put on the field, for the most part.”
So where is the revenue going now, exactly?
The Cardinals, like all other privately held teams (and privately held corporations generally), are opaque with their finances. Forbes estimated their 2023 revenue at $372 million, out of which operating costs including debt service is paid. FanGraphs estimated their 2023 payroll obligations, including deferments, contributions to the player pension fund, and buyouts to be roughly $201 million. In 2024, that number rose to $216 million.
To estimate roughly but fairly, if the Cardinals in 2024 endured a revenue dip to approximately $360 million, that leaves in the vicinity of $145 million to cover the rest of the budget, from debt service to baseball operations outside of salary to buying hot dogs and t-shirts for resale.
Mozeliak said that the Cardinals intend to increase player development spending by 8-12% in 2025, but cautioned that that total could vary based on a firmer revenue forecast. If the Cardinals simply walked away from all of their potential free agents – Goldschmidt, Kittredge, Matt Carpenter, Kyle Gibson, Lance Lynn and Keynan Middleton – they would clear roughly $35 million in salary space by replacing each of those six players with a player making the league minimum.
That calculation includes a $15 million jump in Sonny Gray’s salary, a $3 million dip in Nolan Arenado’s, $5 million from the Rockies as per the terms of the Arenado trade, and boosts in arbitration for the relevant players. And it doesn’t include whatever savings come from whatever trades are sure to follow this winter in the wake of the announced “reset.”
That clearance far exceeds an 8-12% increase in player development spending. The Cardinals did not spend $350 million on player development in 2024. It’s mathematically impossible. It defies logic. It’s impossible to know exactly how much they did spend, but even $100 million annual would seem to be an exceedingly generous estimate.
The difference is 10s of millions of dollars which will vanish from the big league payroll without being reinvested in player development. That has to be true, by all logical reasoning and simple arithmetic.
Feel free to check it, but leave yourself time to wonder exactly where the revenue machine’s output is being directed now.
