Why the Cards will go +$100m soon.
I think the Cardinals could be headed for a significant increase in payroll, maybe only 10 million, maybe 20-30 million (less likely), but there a several reasons for my thinking this. I do not write here very often anymore, and am not sure if someone has already done this or if it warrants a fanpost, but I think it might start some conversation. If not, just say so and I will remove it.
Their has been talk lately around the baseball world about how the Cardinals will keep their 100 million dollar payroll, while paying Pujols and Holliday, 17+ and 17 million respectively over the next several years. I don't think they will keep their payroll budget at $100m for a couple of reasons:
- First of all, this is a good baseball town, and their has been a lot of fan support through the years, including last year, which wasn't completely expected due to the economy and all.
- Mark McGwire- I don't think the only reason for signing him as hitting coach was because of his experience and ability to teach hitting, while both very good reasons, but I think it was also to get some publicity. We are not anywhere near competing with the publicity the Yankees and Red Sox get every year, (let's face it, if we won the WS, the next day on Sportscenter would be more about the Yankees' offseason plans than our WS win) but we are trying to get some more, by creating a little drama and controversy.
- Matt Holliday- Not only is Holliday a great hitter, but he will draw a lot of people to Busch Stadium to see the duo of Pujols and Holliday smashing opposing pitchers into the ground. This was also a very public move, as he was the biggest free agent on the market, so everyone knows about it. Maybe we'll get a few more nationally televised games if ESPN is noticing this.
- Finally, we have built a great team for under 100 million dollars year in and year out. Especially this year. Think of how much better we could be with another 10-20 million to spend. That could get us another Carpenter, or another Holliday, or a few non-star, quality players. I think we have had to be saving up plenty of money from those years of not too high payroll and high fanbase. So with that and hopefully more team interest around the globe, we will be making more money this season, and if DeWitt is willing to go into some of that saved money, unless he's already spent it, I think we could easily afford to do that.
Also, in past seasons where our payroll was near 100 million, we'd always here we'd have another 15 million to spend at the deadline if we found the right deal. So if they could always afford to spend another 15 million then, why not now that we're getting more press coverage on a national level?
I could be wrong, but I think the Cardinals are setting themselves up to reach past their usual $100m budget.
Thoughts?
39 comments
|
2 recs |
Do you like this story?
Comments
You must be right...
as the 2011 payroll is at $90 million for:
Holliday
Pujols
Ludwick
Ryan
Skip
Molina
Carp
Wainwright
Lohse
Franklin
Rasmus, Freese, Garcia, Motte, Boggs, and Hawksworth will all be pre-arb, totaling a combine $2 million.
This leaves a $92 million budget and the following needs:
- starter
3 bullpen arms
4 bench guys
Maybe we can do it for less than $100 million after all.
Six years was the hope of the herd;
Unanimous but for one who demurred;
A prescient young man;
By the name of stlfan;
He knew Scotty would have the last word
presumably the bullpen arms won't cost much
and I assume we can produce most of the bench internally. If we pencil in Boggs, Hawk, Motte, Sanchez and Franklin from the right side, we only need a couple of LOOGYs. Certainly, the OF should have Jay, Craig, Henley and perhaps DJ Tools ready for significant MLB playing time, and if only 2 of those guys “make” it, that’s all the OF possibilities covered. I think Tyler Greene is pencilled into the Lugo role, long-term, and presumably we can pencil in Descalso as, at the very least, a backup-quality 2B.
Lynn will probably be ready to play some sort of role in 2011, so, as long as Garcia doesn’t suck, we can still probably put out at least a league average rotation internally. Then there’s a couple of guys who are longshots but who may figure something out in 2010 (Ottavino is probably top of that list) and fit into the major league plans somehow.
You have to assume at least a handful of these borderline guys either won’t pan out for some reason, won’t be trusted with a major league job, and/or that there’ll be some injuries here or there, so we probably will need a couple of free agents, but I assume we can get a mid-to-back of the rotation starter for ~$5m, and maybe fill any other holes fairly cheaply.
I think we CAN, therefore, make a competitive team in 2011 without going beyond $100m much (if at all), but you have to think that a Pujols extension is imminent. I’d be fine bumping payroll to $105m (or even $110m) just to afford that, and spend whatever excess we have (probably in the $10m range) to pick up spare parts to fill the holes.
RELEASE THE CENTIQUID!!!!
by Felonius_Monk on Jan 8, 2010 6:16 AM EST up reply actions
My 2 pennies
Is that the payroll over the next couple years will stay the same as it is now while also rising to around 110m. What I mean is that I think the payroll will come in around 100 and thus give us the resources to construct the same type of rosters that we’ve had the last couple of years. The rising to 110, in my opinion, will be Pujols new (big) contract. So yes, I think payroll will be 110m at least but it will just be pujols’ raise.
Question:
Is there always a correlation between ticket prices and payroll? We have some of the highest ticket prices in the game, even top 5 if I’m not mistaken, so does it follow that our payroll could continue to climb into that range as well?
Certainly Cardinal Nation pays its dues. Could we support, say, a $140 million dollar payroll under the right conditions for a relatively short (3-5 years) amount of time?
"I believe he’s been reincarnated, that he played before, in the twenties and thirties, and he’s back to prove something." - Former teammate Mark McGwire about Albert Pujols
It would certainly make sense
The Red Sox had the highest prices from 2000-2009 until the Yankees charged higher last season. I know correlation is not causality, but it wouldn’t be a bad assumption.
In football, the object is for the quarterback, otherwise known as the field general, to be on target with his aerial assault, riddling the defense by hitting his recievers with deadly accuracy in spite of the blitz, even if he has to use the shotgun. With short bullet passes and long bombs, he marches his troops into enemy territory, balancing this aerial assault with a sustained ground attack that punches holes in the forward wall of the enemy's defensive line.
In baseball the object is to go home! And to be safe! "I hope I'll be safe at home!"
-George Carlin (RIP)
ticket prices are not ticket revenue, however
Note that the Red Sox also have had the smallest capacity stadium in MLB for a while, as well.
They say that it's never too late, but you don't get any younger...
2009 MLB fan cost index study
According to the website Team Marketing Report’s Fan Cost Index, the Cards are 10th. This index includes more than just tickets. Here is a link to the 2009 study
an excerpt
from the linked report
In 2006, the average ticket at new Busch Stadium was $29.78. This season it’s $29.43.
Thanks for the link
This is interesting info
"I believe he’s been reincarnated, that he played before, in the twenties and thirties, and he’s back to prove something." - Former teammate Mark McGwire about Albert Pujols
I am pretty sure somebody (fourstick?) through educated guesswork figured that DeWitt wasn't making a huge profit, year-on-year
I think it was <$10m. Of course, wild guesswork may not be able to estimate the value very evenly, and there are HUGE profits to be made by making the post-season every year (which we’d hope to do more often than not by tying up Holliday & Albert long-term), so it may be possible to take a “risk”, bumping payroll and hoping the extra revenue from post-season appearances can cover it.
A soccer club in England near where I live (Leeds United) did a similar thing a few years ago. This, however, may serve as a slightly cautionary tale, as they took on a succession of huge contracts and basically gambled on their ability to be successful in the league and qualify for european competition every year (basically analogous to making the post-season in baseball, give or take). One year (2001 or 2002, I think) they had a very poor season, and went on a horrible downward spiral, selling off their players for the proverbial cents-on-the-dollar, and tumbling down the english soccer leagues. They went bankrupt, nearly lost their stadium to pay off debts, went through 3 or 4 different ownership groups, and still (comparatively) suck. They’re only just on their way back up, and it’ll take them well over a decade to recover all the ground they lost.
RELEASE THE CENTIQUID!!!!
by Felonius_Monk on Jan 8, 2010 6:24 AM EST up reply actions
that might've been me...
… at one point i ran some back-of-the-envelope calculations and found it was very possible that the ownership group was actually losing money on a year-to-year basis after including servicing of the debt and taxes, although they were building up equity in the team. if they made a profit, it wasn’t much considering the outlays. that post was here.
and i agree: the decline and fall of Leeds United is one of the saddest stories in sports. one of my friends is a big Leeds fan, and he’s been miserable for years. although their recent defeat of Manchester United helped quite a bit. i watched that game with him (i’m a Liverpool fan, so i cheer for whoever plays against ManU), and we was grinning like a freakin’ 3-year-old.
I think I posted something similar in a different thread around the time of the Holliday trade
but hell if I can find it.
I think one thing that analysis you looked at doesn’t take into account is the revenue sharing agreements for all the MLB clubs which don’t appear to be factored in here, and that’s probably 20% of team revenue. Also, luxury tax payments don’t appear to be factored in either. The reason I say that is because if they were, they should be broken out by team as a single amount (not encompassed on revenue), especially since this appears to be for a 300 level economics class.
I would make and educated guess that the league average revenue percentage spend on payroll is right about 50%, with the Cardinals falling just a bit below that threshold. I remember an article in 2006 talking about how teams were attempting to bring their payroll’s under 50% of revenue because teams (like the Rangers under Tom Hicks) were having one hell of a hard time making any kind of money when they got higher than that.
I would guess that our revenues are around $190M to $200M per season and that revenue sharing, mlb.tv, mlb.com, and lux tax payments would push that up to around $220-$230.
Can Colby round out our new MV3?
how/why would revenue from revenue sharing...
… not be included in “gross revenue”? i’m not an accountant, but i thought gross revenue included all sources.
Pretty sure the cardinals pay more into revenue sharing
than they get back. But it’s only on the order of 3-5M, IIRC.
(If the Forbes revenue numbers are correct, and are pre-revenue sharing, and the formulas for revenue sharing posted on the internet are correct, they paid out about $2.3M last year.)
And small-market teams don’t get any of the luxury tax money. That money goes into the “industry growth fund”, which pays for player benefits and towards promoting baseball in other countries.
They should make money off of MLBN and MLBAM etc, but so does everyone else…
it's Clydesdales vs Goats. Actually sums up Cards vs. Cubs quite nicely. -all4tookie
Yes
Revenue sharing is calculated based on at-the-door revenue, and TV contracts are not factored in. This really screws high-attendance teams like the cardinals in favor of low-attendance, TV rich teams like the Phillies.
They say that it's never too late, but you don't get any younger...
Forbes valuation from Spring 09
my one and only fanshot comes in handy again. Link to article
Forbes just published a special report with updated values, revenue and operating income for all 30 major league teams. The Cards are # 8 in value, 10th in revenue and 24th in operating income, which would tend to say DeWallet has been open.
There is a good chart for comparisons and sorting on various data points.
http://www.forbes.com/lists/2009/33/baseball-values-09_The-Business-Of-Baseball_MetroArea.html
The Marlins are cleaning up, with operating income of $43.7 mm on revenue of $139 mm
The bizofbaseball.com had this article on revenue sharing in 2002, 2003 and 2005. The Cards paid into the system each year.
regarding revenue sharing
the latest CBA reduced the amount of revenue sharing significantly, from 48 percent to 31 percent. So the 2007-2009 numbers will be much smaller than what is found in those links.
it's Clydesdales vs Goats. Actually sums up Cards vs. Cubs quite nicely. -all4tookie
I think it will shoot up to around $120 million after '10
I cannot repeal the words of the golden eel
by Cards Fan in Chitown on Jan 8, 2010 9:58 PM EST reply actions
it looks like it's going to have to
Every morning I wake up & smoke a dart. Then I eat five strips of bacon, & for lunch I eat a bacon sandwich. And for a midday snack? Bacon! A whole damn plate! And I usually drink my dinner. And I'm still here! Sometimes I wonder if God forgot about me.
hope so
I cannot repeal the words of the golden eel
by Cards Fan in Chitown on Jan 9, 2010 2:13 PM EST up reply actions
i think the best reason to think that payroll will go up...
… is that the ownership group has built a good bit of equity in the past few years. if their primary concern is the debt-to-equity ratio, then that has improved simply by virtue of making their debt payments. this could free up some additional cash.
Just because I want to share a good laugh with my fellow VEB'ers
I was doing a search of the term “DeWal…”(I refuse to type the whole word) over at the PD forums, just because I am a masochist. Anyway, I couldn’t even complete my search because this reply under the heading of “I say crew(sic) DeWal..”:
We could still use a power bat off the bench I think that could of been jason bay
He still let derosa go
He could of signed Lackey
Chone Figgins would of been a nice Utility guy
Mike Gonzalez would of looked good in the pen
Rany WOlff would of made a nice back of the rotation guy.
And from what I gathered, this would have been on top of signing Holliday.
Thanks for the guffaws P-D Forum!
Lighten up, Francis - Sergeant Hulka
* sarcasm might be involved in this comment
the idea that the 2nd biggest name on the FA market would sign to be "a power bat of the bench" is pretty hillarious.
RELEASE THE CENTIQUID!!!!
by Felonius_Monk on Jan 10, 2010 7:19 AM EST up reply actions
unbelievable.
I cannot repeal the words of the golden eel
by Cards Fan in Chitown on Jan 10, 2010 6:17 PM EST up reply actions
by my count, that's about $65M in additional annual salaries we would have to take on.
sorry, PD posters, the cards are not turning into the Boston Red Sox overnight.
My daddy told me, lookin' back, The best friend you'll have is a railroad track So when I was 13 said, I'm rollin' my own, And I'm leavin' Missouri and I'm never comin' home . . . Now I woke me up with a cardinal bird, And when I wanna talk, He hangs on every word. . . And I'm lost at the bottom of the world. - Tom Waits
ROTOWORLD: CARDINALS CLOSE TO SIGNING EVERY FREE AGENT
according to a club source, the Cardinals are nearing a deal with Every Free Agent. The deal is set to be for 5 years, and include a vesting option for a 6th, coming to a final value of approximately 1.2 billion dollars. According to the source, the 6th year option vests if Every Free Agent exceeds 5,000 plate appearances in the final guaranteed year of the deal.
Rumours suggest likely incentives, bringing the deal up to a potential 1,200,050,000, for Any Free Agent winning the Cy Young, MVP, Silver Slugger or an Academy Award for Best Screenplay during any year of the contract. This deal narrowly breaks the record free agent contract, handed out by the New York Yankees to Alex Rodriguez, in December 2007.
Every Free Agent is likely to be platooned with rookie Allen Craig in left-field.
RELEASE THE CENTIQUID!!!!
by Felonius_Monk on Jan 11, 2010 6:18 AM EST up reply actions 2 recs
Bahahahahahaha
In football, the object is for the quarterback, otherwise known as the field general, to be on target with his aerial assault, riddling the defense by hitting his recievers with deadly accuracy in spite of the blitz, even if he has to use the shotgun. With short bullet passes and long bombs, he marches his troops into enemy territory, balancing this aerial assault with a sustained ground attack that punches holes in the forward wall of the enemy's defensive line.
In baseball the object is to go home! And to be safe! "I hope I'll be safe at home!"
-George Carlin (RIP)
I don't believe this for a moment
if that really happened, the likely incentives would include pies.
"It was like two ankles." AVENGE BOOG
"But listen, and understand: more Molinas are out there. They can't be bargained with. They can't be reasoned with. They don't feel pity, or remorse, or fear." - THT
I think we are going to need to get up towards $120m
With Holliday being given 17 million over the next 7 years and talks of Pujols getting up near 30 million, we need to add payroll. Although I don’t believe Pujols will take 30 million, he could easily get it if he wanted. So let’s say Pujols get 28 million, for the sake of easy addition. That gives us 45 million on 2 players. So we’d have 55 for 23 players. Not to mention when you add in Carpenter and Wainwright’s salary. If management hasn’t already decided to make the move up to 115m or so, the Holliday deal was a huge mistake and they should not have their jobs. Luckily, I think they are prepared to do so and can therefore keep their jobs, but you never know, and only time will tell.
I think/hope Pujols will take $25m or slightly less
realistically, if we’re looking at an 8-10 year deal, $25m is about market value, it’s not as if he’s even giving us a big discount in that (and a deal the length that he’ll get is pretty unprecedented in terms of long-term injury risk, too). If he’s “not bothered about money” as he’s said several times, he really should sign for a touch more than Holliday got (if he’s still concerned about being the top dog). 8 years, $20m/yr should be plenty enough.
$30m/yr over 8-10 years is probably a slight overpay.
I actually think, if the two players are very good, that you can build on a team on a ~$100m payroll whilst paying huge gobs of that to your stars. We’ve got 3B, 2B and SS filled internally at cheap rates for the foreseeable, one or two cost-controlled pitchers, Rasmus and a bevy of guys who will be useful platoon pieces, league-average OFers or 4th OF types. Even if a few of these guys flame out, for the next 3-4 years much of our team will be quite cheap.
We really need to seriously bump payroll in around 2013, 2014, because our farm looks unlikely to develop any high-end talent by that point (assuming we’re picking late in the first round for the next few years, and assuming Shelby Miller doesn’t make it), Holliday and Pujols will both be beginning/in their decline phases and thus won’t be worth more than their contracts pay them, and a few other critical pieces (Molina, Waino, Colby) will either be leaving or not be very cheap any more.
I guess the ultimate concern is that, with the Holliday and Pujols long-term deals, it’s very, very likely that we’ll suck in 2015, 2016 and maybe 2017. I realise that’s a long ways away, but with a weak farm system and two high-paid guys in their mid-to-late 30s at that stage, it’s not implausible that we’ll basically be the 2009 Houston Astros. Another issue that will probably play into it is that GMs are getting better and better, so any advantages we have in the division from having a vaguely competent front office will be gone. Hendry will be canned before that stage, ditto Wade, and the Astros and Cubs have new ownership that may be more likely to employ a competent GM. I suspect Jocketty will be gone too, and the Huntington era may yield a more competitive Pirates. I guess I’d take that for 4 or 5 seasons of good, competitive teams, but there are choppy waters ahead.
RELEASE THE CENTIQUID!!!!
by Felonius_Monk on Jan 13, 2010 9:16 AM EST up reply actions
Right when I read this
We really need to seriously bump payroll in around 2013, 2014, because our farm looks unlikely to develop any high-end talent by that point (assuming we’re picking late in the first round for the next few years, and assuming Shelby Miller doesn’t make it), Holliday and Pujols will both be beginning/in their decline phases and thus won’t be worth more than their contracts pay them, and a few other critical pieces (Molina, Waino, Colby) will either be leaving or not be very cheap any more.
My first reaction was: We’re going to be the 2009 Astros NOOOOOOOOOOOOOOOOOOOO.
Then ofcourse, you allude to that very same notion, which is pretty funny to me.
Anywho, I agree with your entire notion, but I don’t think that the Cardinals are prepared to raise payroll. They are banking on the playoff money to come in and boost it. We HAVE to advance in the playoffs, or we will be screwed for the time periods that you mention. It’s a hell of a gamble, but we have about a 3-4 year window to do it.
But I do agree with your GM notion. Hendry, unless the Cubs make the playoffs, will be fired, and the Cubs, with their massive payroll, will be able to field a competitive team with smart contracts (Thank god Alfonso will be there forever!). The Astros, with their large market and decent sized payroll, will fire Wade unless McLane really likes the dude, and they will ultimately have to rebuild under a new GM. The Pirates will be good in a few years once Huntington can get his players in. They have invested a lot of their funds into scouting and player development, and that will pay huge dividends later on.
In football, the object is for the quarterback, otherwise known as the field general, to be on target with his aerial assault, riddling the defense by hitting his recievers with deadly accuracy in spite of the blitz, even if he has to use the shotgun. With short bullet passes and long bombs, he marches his troops into enemy territory, balancing this aerial assault with a sustained ground attack that punches holes in the forward wall of the enemy's defensive line.
In baseball the object is to go home! And to be safe! "I hope I'll be safe at home!"
-George Carlin (RIP)
I agree that the Cubs will be better once Hendry's canned
but I suppose their pretty mediocre farm system and (as you said) a couple of really bad, long-term deals (plus the fact that the payroll surely can’t stay that high forever, if they keep missing the playoffs) might keep them down for a while yet.
I think the Astros could be back by 2013, 2014, but there’s still a lot of uncertainty there, with the ownership and all. It’d be nice to see them bought by a tight-fisted new owner who wants to make money, rather than a Mark Cuban type!
I really like Huntington, and I agree that their front office is looking a lot better, but I do kinda worry that the Pirates (from their point of view) are still somewhat settling for mediocrity. Their significantly under-slot 4th pick in the draft (who has, I suspect partly due to good scouting, partly due to luck, actually turned into a genuine A-grade prospect) this year was a concern, and I worry that they’ve actually traded or cut a lot of talented players without getting much high-ceiling talent in return. I loved the Freddy Sanchez for Tim Alderson trade last year, but I felt the returns in the Bay and McClouth deals were underwhelming (although I know a couple of the more knowledgeable posters disagree with me on the McLouth deal).
I think they’re hoarding a LOT of guys who can be league-average players, but only a small handful who might be real impact talent, so unless they’re planning a payroll bump when some of these players make it, it seems to me they’re just building an 81-win-team at the moment. Of course, when Huntington’s filled the farm out a little, he might switch targets and go for some high-ceiling guys this year, although it’s clear they’ve got no more bullets to fir in terms of trade bait, with the possible exception of Doumit if/when he comes back to form. Any high-ceiling talent they add will have to be through the draft, but I guess if they have a good one in 2010, they’re back on track.
RELEASE THE CENTIQUID!!!!
by Felonius_Monk on Jan 15, 2010 6:51 AM EST up reply actions
I agree with most of what you say
What’s kind of funny is, Cuban probably would buy that team. He has shown interest in buying a team :)
I especially like Huntington. Supposedly, if his owner is as tight with money as they say he is, Huntington is doing a good job considering the circumstances.
The Bay deal was one I disagree with how they went about it. I mean, Andy Laroche has potential, especially with the glove, but I mean, a guy of that caliber should at least be able to attain better prospects. Hell, if you think Bay was at least somewhat comparable with Holliday, and you look at the prices. It’s astounding! What the Cardinals gave up for only a half (At the time) year of Holliday was nowhere near the package for one and a half years of Bay. Alderson was a fantastic pickup as you said, and the McClouth deal is still kind of a mystery to me (I think they could have at least gotten Freeman).
I think Huntington’s strategy, as you referred to, of getting some league average guys was just to get some depth in the organization. They had these “star” players, but absolutely no role players to help them, and no depth to replace them if they got injured. He will probably go for some high risk prospects imo.
In about 2 years, I would worry about the Reds, when Chapman has some minor league experience (Although he will probably still be in the minors) and Volquez will be back to health. Plus you have Votto and all those Yuts(Youths, huzzah movie quote) develop.
In football, the object is for the quarterback, otherwise known as the field general, to be on target with his aerial assault, riddling the defense by hitting his recievers with deadly accuracy in spite of the blitz, even if he has to use the shotgun. With short bullet passes and long bombs, he marches his troops into enemy territory, balancing this aerial assault with a sustained ground attack that punches holes in the forward wall of the enemy's defensive line.
In baseball the object is to go home! And to be safe! "I hope I'll be safe at home!"
-George Carlin (RIP)
the Reds are a weird one
great young talent, but pretty much the absolute worst GM and worst manager in the league to run a team that’s replete with talented young arms and a pretty solid upper-minors farm system. You’ve got to question the logic of their ownership, really. With a great front office i agree they’d be really scary, going forward.
I think Jocketty might be a spent force, tbh – he was pretty appalling the last couple of years in StL and he’s done a poor job in cinci (IMO) so far.
RELEASE THE CENTIQUID!!!!
by Felonius_Monk on Jan 16, 2010 5:56 PM EST up reply actions 1 recs
The Budget is gonna go nuts now
Now how do you think Pujols is going to negoicaite his contract when its up. I would have rather seen them bless Alberts wallet than Holliday,. Holliday is good and all, but I want them to tag Albert as Franchise and give him a big contract with big money to keep him here where he belongs
Tim

by 


















