Interesting news this morning about the poor, poor Cardinals and their razor thin profit margin.
Bill DeWitt Jr. said in news reports that the team had to shave $8 million off it's payroll (actually, by my calculations, it was at least $15 million, but it's hard to say with the team's ever changing payroll claims) because revenue is expected to be down in 2009 from last year when the club ONLY saw a $25 million profit.
The Cardinals gave doom and gloom projections over the winter about decreased revenues and used it as an excuse to do nothing while several big ticket contracts expired from their balance sheet. But it has already sold 2.7 million tickets, putting it well above the major league average for attendance. (They may see some advertising revenue loss, but the team has a $100 million, 30-year naming rights deal for the ballpark and Busch Stadium is the most popular advertising venues in St. Louis even if it is a down market.) It's a safe bet it will top the 3 million mark before all is said and done, putting the Birds in the top handful of clubs in drawing power but the middle of the pack in terms of payroll. Meanwhile, I have seen the price of my tickets increased two years in a row...
Several of my well respected co-workers were laid off this week due to the poor economy. Those of us who still have our jobs are making due with pay cuts. It's a common theme across the country. I can speak from personal experience that it hurt more than ever to write my season ticket check this year. Everybody is doing with less -- except the Cardinals. When money gets tight, they water down the product and raise the price. Why should the owners have to suffer along with the peasants?
So forgive me if the sob story falls on deaf ears. Especially with the Cardinals excuse that much of their profit goes to debt service on the stadium.
Here's an excerpt from a post I published Jan. 3 called "Brother can you spare 100 million dimes." It sheds a little light on who is actually paying for Busch Stadium III. (Here's a hint: it's you and me.)
While the Cardinals claim they are footing the bill for the $388 million new ballpark almost entirely out of the operational revenue of the club, it is actually being completely paid for by the taxpayers -- and then some.
Back in 2005, the city of St. Louis eliminated a five percent amusement tax on Cardinals tickets to help get the stadium built. According to St. Louis Journalism review, the elimination of that tax will put $350 million in the pockets of DeWitt and company over the first 30 years Busch Stadium III is in business.
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The SLJR reported in June 2007 that the Cardinals will get far more than just to pocket the five percent they were paying to the cash-strapped city. According to the publication, the Birds get:
* $20 million from property tax abatement on the new stadium over 25 years by the city of St. Louis. The Cardinals paid $604,000 in property taxes in 2005.
* $108 million, what it will cost St. Louis County taxpayers to retire the $45 million of bonds sold for the stadium.
* $42.7 million from the state of Missouri for tax credits and highway ramp construction.
* $100 million over 30 years from the naming rights for the new stadium. It has been estimated it would be worth $3 to $5 million dollars annually. The actual amount isn't known because the Cardinals have refused to divulge the information.
* $40 million from the Ballpark Founders Program, which charged season ticket holders an additional $2,000 to $7,500 for the better seats in the new ballpark.
* $10 million from selling memorabilia from the old Busch Stadium: 11,000 to 14,000 pairs of seats at $600 a pair, signs, urinals, etc.
The cost of subsidies from taxpayers for the new ballpark comes to around $520 million. Other sources of revenue are about $150 million. This does not include the considerable amount of increased revenue the Cardinals will take in from other sources at the new ballpark--higher ticket prices, premium seats, luxury suites, increased advertising, etc.
The ballpark deal will also considerably increase the value of the team. When it is sold, the Cardinals' owners can expect to make a profit of at least $600 to $700 million. This assumes they will hold on to the team until 2013. They would incur penalties if they cash out before then.
The Cardinals' owners bought the team in 1995 for $150 million. This included the stadium, adjacent parking garages and various parcels of land. The parking garages and some of the land were sold for $101 million, giving them a baseball team at a net cost of $49 million.
According to Forbes magazine, the Cardinals are worth nearly 10 times that amount in 2008.
So, enough of the crying poor. Let's get some freaking players. The Cardinals can easily afford a $125 million payroll like the poorer drawing Mariners and Tigers while still making a reasonable profit. And anything less is just the team lining its pockets.
Best case scenario: The Cardinals didn't want a new ballpark to make the team more competitive. They wanted one to make their investment more profitable. And I resent the way fans are being treated while they take advantage of us to insulate themselves from the economy.