On Monday, the drug company Pfizer announced that its experimental COVID-19 vaccine had a 90% effective-rated based on early testing results.
“We’re in a position potentially to be able to offer some hope,” Dr. Bill Gruber, Pfizer’s senior vice president of clinical development said.
This is good news. COVID cases are exploding throughout the United States. The nation passed 10 million confirmed cases on the same day this report was released and has regularly eclipsed 100,000 cases per day. With the increase in the infection rate comes increasing hospitalizations and deaths.
Cases are climbing throughout Cardinals’ country. In Cape Girardeau County, where I live, cases have spiked over the last few weeks – over 4x what it was a month ago. There has been a significant rise in deaths during this period as well.
If Pfizer’s results hold up to more thorough testing, it would bring some light to the dark tunnel that has been 2020 for our region and the nation.
All that said, this is a website about Cardinals baseball. Why am I writing an article about the vaccine here?
Nothing will have a greater impact on payroll and player acquisition this offseason than a COVID-19 vaccine. Everything hinges on whether or not the front office can project ticket-buying fans in the stands at Busch Stadium in April.
First, a quick review. The Cardinals (and the rest of MLB) are in the middle of the industry’s worst financial crisis in decades. The Birds were only on the bat 58 times last season and none of those games included fans. That’s 104 games worth of television revenue that the Cardinals did not receive and 162 games worth of gate revenue that won’t line Bill DeWitt’s pockets.
Cardinal fans can (and will) argue about how much revenue the club lost in 2020 and whether or not the club can simply absorb those losses. The “can” part is essentially irrelevant. The club clearly won’t. They’ve already taken action to cut spending to recoup lost revenues and protect themselves from the financial uncertainty of 2021.
This is why Kolten Wong is a free agent. John Mozeliak cited the need for immediate payroll flexibility when Wong’s option was denied. This is also why the club did not offer extensions to Wainwright or Molina before free agency hit. It’s why arb-eligible players, like John Brebbia, might find themselves off the roster in a few weeks.
The first quarter of this offseason – from the end of the World Series through the non-tender deadline – will be de devoted not to investigating trades and gathering information from agents, but to exploring all possible means of trimming payroll to fit within ownership’s budgetary comfort zone.
The Clark Street accountants have as much or more control over player personnel decisions this offseason than John Mozeliak and Michael Girsch.
If the budgets demand it, the Cardinals could get even more extreme in their slash-and-burn tactics. John Gant and other arbitration-eligibles (Harrison Bader, for example) could find themselves on the chopping block. Derrick Goold has reported that the Cardinals are listening to offers – if any come – for Carlos Martinez and Dexter Fowler to gain financial flexibility.
The key is that last word: flexibility. The Cardinals are gaining as much financial freedom as possible to recover lost funds from 2020 and to protect themselves from potential losses in 2021.
So, what will the Cardinals budget for 2021 be?
The team currently projects a Opening Day 26-man payroll of $126.6M. (Note that is down from my previously projected payroll floor of $134.5M. Cot’s updated their arbitration estimates. Plan on this number being a moving target as more information about the market and how arbitration will be handled comes in.)
In the Pre-COVID timeline, the Cardinals were tracking toward $166M in Opening Day Payroll in 2020. They are already down nearly $40M and are one backup catcher away from fielding a complete (though not entirely competitive) roster if they had to for 2021.
In a non-COVID timeline (just erase the virus from history), the Cardinals would likely be looking at a 2-3% increase in payroll. That’s been the trend:
2020 - $166M
2019 - $162.6M
2018 - $159.7M
2017 - $148.2M
2016 – $145.5M
2021 (Projected/non-COVID) – $169-174M
A 2021 payroll projection of $169-174M would be around $50M above current payroll levels.
Oh, the things that the Cardinals could do with $50M in payroll flexibility! Especially in the financially repressed COVID market! Do you want a power-hitting left-fielder? You get one! A top-flight 3b’man? You get one! An ace pitcher? You get 2 or 3 of them!
Alas, COVID happened and $50M in payroll space is little more than a winsome autumn dream.
Unless the vaccine arrives.
With a resurgence of the virus, the Cardinals cannot currently project normal amounts of in-stadium revenue in 2021. In the greater sports world, some college and pro football teams have allowed fans in the stands, but only in limited capacities. Following current trends, it seems likely that the Cardinals could project some percentage of fans at Busch for the first quarter of the season. Across the state, the Kansas City Chiefs are limiting capacity at Arrowhead Stadium to 22%. Let’s assume the Cards follow the Chiefs’ model and limit stadium capacity to the same number. That would mean a gate-revenue shortfall of 78% for the accountants, give or take some adjustments in ticket prices.
How much payroll can the team carry if it DeWitt et al want to both recover lost funds from ’20 and maintain operations with a 78% reduction in in-stadium revenues?
The answer to that question is probably the current $126.6M payroll floor, plus or minus a few additional non-tenders. That seems to be about as low as the club can reasonably go based on current information.
What will it take for payroll to climb? The answer is simple: more fans in the stands.
There are three ways that can happen: 1) The virus is going to have to magically disappear. 2) Baseball would have to choose to completely ignore public health. Or 3) There will need to be a highly-effective, efficiently-delivered vaccine available to the general public this winter.
From a baseball perspective, this is why the vaccine matters so much. The most optimistic projections for the release of Pfizer’s vaccine would be late November. AstraZeneca projects a January release for theirs. Public safety is still the biggest obstacle. According to the AP, both AstraZeneca and Johnson & Johnson had to halt vaccine testing after reports of serious side-effects from the injections. The Food and Drug Administration – FDA – is anxious to get a vaccine to the public but they would not approve a drug that comes with significant risk to recipients. They currently require a 2-month trial period. Pfizer’s “late November” projections coincide with the FDA’s safety deadline.
In the meantime, Pfizer and other companies have already begun stockpiling supplies of their drug to speed distribution once they have emergency FDA approval.
That’s good because distributors will need a lot of vaccine doses! Early reports indicate that the vaccine will be administered in multiple injections over a few weeks. Immune response could be as long as a month from the first injection. Then there is the distribution schedule. States in the Cardinals’ region are likely to prioritize medical personnel and those at the highest risk from the virus. It could be months after the virus is approved before the general ticket-buying population both have access to the vaccine and time for it to reach efficacy.
So, this week’s news is good! But the vaccine still needs time.
Fortunately, there is no need to rush roster decisions. With the cancellation of the in-person GM and Winter Meetings, baseball has removed offseason mile-markers for deals to get done. It seems certain that clubs will delay major signings and trades until there is more certainty on the virus and vaccine, and internal issues like the Designated Hitter and roster size are resolved.
The Cardinals are likely to wait these uncertainties out, prepared for the worst, but flexible enough to respond positively with continued good news. As the season and the sickness become more projectable, the market will begin to heat up, and the Cardinals can use their flexibility to improve the club.
When will this happen? Maybe as late as February.
In the meantime, keep your eye on the vaccine information as it is released. It matters. For public health first and foremost. And, secondarily, for the game and team we love.