The ‘Cardinals are cheap’ narrative is back

The primary story of the 100+ years of the St. Louis baseball franchise is consistent, winning baseball - producing several era-defining dynasties, 11 World Series titles, most of any National League club.

But the 2nd most familiar storyline is that this ball club is cheap.

In 1942, the Cardinals held a tryout for two promising young catchers from The Hill, Joe Garagiola and Yogi Berra. The story goes that they offered Garagiola $500 to sign, Berra only $250. When Berra asked the club to match the $500 offer, they declined, and so he signed with the New York Yankees and became a Hall of Famer.

I’m sure every franchise has its stories about the ones that got away, and I’m sure many of them had to do with the bottom line. But it’s hard for me to imagine any club with a richer history of cheapness than the Cardinals.

Mort and Walker Cooper, Johnny Mize, Max Lanier, Steve Carlton... these are just a few of the names off the top of my head whose Cardinals careers were damaged or cut short because the club was unwilling to spend money. In my lifetime, the front office of the early 90s certainly did not seem like it was too dedicated to improving the product on the field, through spending or otherwise.

The last 20 years, since Bill DeWitt and friends took ownership of the team, has been an era of relative quiet in the “Cardinals are cheap” narrative. In the early years, DeWitt signed several big name free agents. During the middle years - as is well-documented in Howard Megdal’s The Cardinals Way - the team largely stayed on top by outsmarting its competition.

That has masked a phenomenon which Chase Woodruff has documented nicely at Double Birds: The Cardinals payroll (as a percentage of total revenue) has been on the decline for ten years.

Now, there are a million ways to pick this apart, with arguments on both sides - some valid, some specious. Even with the best publicly available information, it’s hard to know exactly the financial state of the Cardinals. They are a “small market” team who draws exceptionally high revenue from that market. They have perhaps, as Bill DeWitt suggested to the PD, spent in other areas, such as international amateurs.

But even as you grant various caveats along the way, that ten-year trend line shows that the Cardinals put fewer resources into major league payroll than they once did.

Particularly during the Mozeliak era, the Cardinals have gotten better in other ways - excellent scouting, drafting and player development, smart trades, cutting bait on players before they declined. But now that every team - even the Diamondbacks and Phillies - have embraced analytics, those Moneyball market inefficiencies have largely dried up.

“Spend more money” is, admittedly, the go-to argument for the caveman baseball fan. The results are never as sexy as when you can spin straw into gold with a few late-round draft picks. But it is a way to put more resources into your system, and when you’ve squeezed the last drops of value out of what’s currently in your system, it is the easiest way to improve.

But here’s the good news: If the Cardinals do as DeWitt has been promising for years and increase payroll - even just back to the levels of a few years ago - this debate could soon go away forever.

As noted at Double Birds, between 2005 and 2009, the Cardinals spent an average of 53% of revenue on payroll. In recent years, that percentage has dipped even into the low 40s.

If the Cardinals maintained a payroll at 53% of revenue, this year’s would be approximately $181 million. Craig’s latest estimate for this year comes in at just $146 million. That’s a big enough gap to squeeze in a David Price or a Jon Lester and still have some leftover.

It would also be a payroll large enough to put the team within spitting distance of the Luxury Tax Threshold, which for 2017 will be $196 million. Because baseball has no official salary cap, you could argue that your team should forever spend more money. But we’ve seen in recent years that the penalties of the Luxury Tax are strong enough to nudge even the Mighty Yankees to back off on spending.

The Luxury Tax is effectively a salary cap, and a team with the revenues of the Cardinals should be spending at or near that cap.

Based on their reported revenue and recent rate of increase, and factoring in the enormous windfall from their new TV contract, I would expect the Cardinals revenue to be $370 million by 2018.

If they were to spend at that 53% rate on player payroll, that would put them at $196 million in 2018. The Luxury Tax threshold will be $197 million.

It is my sincere hope that we see the team return to spending on payroll relative to what they did in the recent past. Coupled with their increasing revenues, that should put the team’s spending right in-line with what is ostensibly the salary cap, and perhaps put to bed once-and-for-all the “Cardinals are cheap” argument.