2020 Payroll and Spending Trends

The Winter Meetings are drawing to a close. As of this article’s posting deadline, lots of money was spent on a handful of players, most of them pitchers. Stephen Strasburg predictably returned to the Nationals. Scott Boras had not one, but two mystery teams in on Gerrit Cole and the agent’s media patsies surmised that the Cardinals were one of them. Spoiler alert: they weren’t. Cole predictably went to the Yankees.

It’s no surprise that Boras attached the Cardinals to his high-priced client. He does it every year and he’s not the only agent who plays that game. Everyone is anxious to dip into DeWitt’s coffers.

Except, of course, the Cardinals, who were predictably quiet at the Meetings. Sure, there was the big news about newly elected Hall of Famer Ted Simmons. Jack Flaherty got hacked off about not being first-team all-MLB and was awesome (as usual) on Twitter. There was plenty of chirping about Matt Wieter’s potential return and the inevitable “just go ahead and trade Knizner response!” from fans. Paul DeJong switched numbers again. Michael Wacha is now officially pond scum (and I wish him the best!). Oh, and the Cardinals have been linked to just about every mediocre left-handed OF’er and second-tier starting pitcher in the game.

As the fall rumors of trades and signings become winter realities around baseball, the best way to speculate on what the Cardinals might do is to understand the assets they have available to spend. Money is the currency of the offseason and while the Cardinals have piles of it, they only devote a portion each season to payroll. Prospects, too, are an important part of the equation, but we’ve already covered those assets for the Cardinals here and there.

Today, we’re talking payroll. How much do the Cardinals already have on the books for 2020? How much room is left for player acquisition? Have the Cardinals changed the way they spend? I know your attention is likely riveted to the non-stop action of the Rule 5 draft, but hopefully I can hold your interest with not one or two tables, but three!

In the 2000’s, I tracked the Cardinals payroll on my own, using spreadsheets and databases created and maintained across a variety of blogs and forums. That was in the infancy of the internet and thankfully there are sites now that do the work for me and better than I could. Cot’s Contracts is the old standard and is still reliable. If you prefer style along with your spreadsheets, the slick design at Spotrac is the way to go, and they also have a wealth of information about overall spending, spending by position, and luxury tax information.

What I’m after here is simple: as of today, what is the Cardinals salary commitment? Cot’s not only provides reliable salary information but estimates on arbitration and likely contract tenders for players who have less than three years of playing time. While players making the league minimum don’t seem like a payroll burden, the quantity of them adds up. It’s best to factor them in at the beginning. With arb and salary estimates included, the Cardinals have about $161M in Opening Day payroll committed for 2020.

Some astute readers might notice an issue with the above numbers: Adam Wainwright. Waino’s base salary is $5M this season, up from $2M in 2019. He has incentive clauses built into his contract that will allow him to earn an additional $1.5M each for 20 and 25 starts, and $2M for 28 starts. Don’t those incentives count against payroll?

No, not yet. Yes, the Cardinals signed Wainwright with the hope that they will give him that money. They are absolutely factoring those incentives into their annual budget estimates. Still, when doing payroll comparisons by season (which is what we are about to do) a consistent approach is vital. Apples to apples. Opening Day to Opening Day or year-end to year-end. Since we’re in December trying to predict a roster for the start of the season, I’ve chosen to use Opening Day payrolls. Wainwright’s Opening Day salary is $5M in 2020 and was $2M in 2019, and those are the figures I’ll use.

Today’s $161M in contract obligations would be a slight decrease in spending over 2019 and the second-highest payroll total in team history. Of course we have a table for that, too!

It’s one thing to know how much the Cardinals are currently obligated for. It’s another thing to predict the kind of budget they are willing spend to. The information above should provide some context for the way that Cardinals’ payroll has evolved over the last ten years.

Discounting 2014, when the Cardinals were able to build a highly competitive roster around a wealth of cheap young talent, the Cardinals have raised payroll on an annual basis. The median payroll change from 2009-2019 is 5%, but the club regularly splurged with increases that range from 8-19%.

2018 is the most recent of these, when Molina’s extension kicked in and the Cardinals inked Gregg Holland on a last minute deal. The Cardinals were tracking toward a slight decrease in spending before Mo gave in to Matheny’s request for a proven close. The signing was ill-fated, but the move did kick spending up 8%.

Since 2018, payroll has remained essentially static. A 2% increase came in ‘19, despite expensive additions in Goldschmidt and Miller. Today, the Cardinals are at -1%, essentially wiping out the marginal gains in payroll made last season. This reality reflects a trend that has defined the latter half of the decade.

More tables, you ask? Why yes, have another.

The rate of increase in the Cardinals payroll has slowed substantially. An as-of-today 11% change in payroll in the last five years averages to just barely over 2% per season. From 2012-2016, the Cardinals averaged 6% in payroll gains per year. What has changed?

First, spending throughout baseball is simply not what it was in the early 2010’s. Feel free to explore Cot’s or Spotrac for spending trends for the rest of the league. This is one of the reasons player agents and free agents have cried collusion. Analytics have revealed what franchises should have already known: players over thirty can’t be trusted and only the best of the bunch should be offered long-term, expensive contracts. More and more teams are relying on draft and development, and the Cardinals are no different.

Second, the Cardinals have actually tried to spend more money and have consistently been rebuffed, forcing the club to settle for cheaper options and, unfortunately, less overall production. The Cardinals pursued high-priced talent in Jason Heyward, David Price, and Giancarlo Stanton and landed none of them. Alternatives Dexter Fowler, Mike Leake, and Marcell Ozuna provided a fraction of the needed production for a fraction of the cost. The result was lower payrolls, lower production, and three years of missed playoffs.

The Cardinals finally succeeded in netting their lunker in Paul Goldschmidt and will start paying him $22M in annual salary this season. That places 2020 as a budgetary case study. The Cardinals finally have their (theoretically) elite producer consuming a significant portion of the budget. The system has produced another wave of intriguing, low-salary prospects, a few of which look like potentially dominant players (I’m thinking of Flaherty, Hicks, and Carlson specifically). The dry powder is finally spent and the club is coming off an NLCS appearance.

The Cardinals of 2010-2016 raised payroll to fill gaps and retain players in order to remain atop the NL Central. Some of these expenses went to significant outside additions to fortify the roster. The club added players like Jhonny Peralta, Rafael Furcal, Lance Berkman, Carlos Beltran, Jake Westbrook and Kyle Lohse to go alongside pillars in Yadier Molina, Matt Holliday, and Adam Wainwright. They coupled these additions with their excellent developing talent, building a mix that was both competitive and consistent for the first half the decade.

The bottom line is that the desire for consistent championship contention motivated the club to spend more aggressively.

The lack of consistent contention, at least until 2019, perhaps motivated the club to cut back on spending until the front office was confident in their talent mix. The acquisition of Goldschmidt and the extensions offered to him, Mikolas, and Carpenter indicate the club has regained some of that confidence. With a deep core of talented players that are largely under team control — including Martinez, Wong, DeJong, Flaherty, and Hicks — and intriguing talent reaching the majors — Edman and Carlson among others — the Cardinals are again poised for a stretch of sustained postseason success.

Will they go for it?

Despite the game’s increasing focus on player development and youth, there remains a strong correlation between spending and winning. The Cardinals could ignore that correlation. They could stand pat, keep payroll stable, and likely find themselves in the thick of the division race again. They could maybe even sneak into the NLCS or World Series. Maybe.

Or, Mozeliak and Girsch can be aggressively opportunistic and pursue talent that will entice DeWitt to return the club to its previous norms of payroll increases. Sitting at -1% today, if the Cardinals simply met their median increase over the last decade (5%), they could add $10M more in payroll.

This kind of payroll space might eliminate the elite free agents, but it plays into the Cardinals’ strengths. While the club has struggled to close the deal with elite talent, they’ve proven adept at finding second-tier players. While players like Kyle Lohse or Rafael Furcal could not transform a roster themselves, they could elevate good rosters to great ones.

Sure, Geritt Cole would have been nice. Anthony Rendon is still out there (or is he?). But, the Cardinals don’t have to go to “mystery team” levels of spending to elevate themselves comfortably past the Cubs, Brewers, and the rising Reds. One or two smart additions to stabilize this roster without blowing up the budget could make all the difference.

The Cardinals appear focused primarily on the trade market in order to accomplish this. This is the right approach. Even mid-tier players can demand $12-$16M as free agents in the current marketplace. Targeting arbitration-eligible players could provide more production gained for less dollars spent. This would also allow the Cardinals to relieve the prospect logjam they have battled the last few seasons.

Look also for the Cardinals to be opportunistic in the pitching market. If older arms fall to 1-2 year deals, the Cardinals have the capital to pounce. Bumgarner might be just out of reach, though it’s possible his injury history and age keep him from the long-term deal he covets. If Dallas Keuchel hangs on the market into January, and I suspect he will, the Cardinals should pull the trigger this year.

There are as many options as rumors. The bottom line is that the Cardinals do have some money to spend and they are in a position where the right kind of spending could set them up for another extended run of postseason success.