As you likely heard or read yesterday, Bill DeWitt, Jr. spoke with Frank Cusumano about the plight of the billionaire owner class as they struggle to reach an agreement to start the Major League Baseball season.
“The industry isn’t very profitable, to be quite honest,” was DeWitt’s most salient quote from the conversation. But there were other nuggets throughout that illustrated a very important fact that is easy to lose sight of, but should never be forgotten:
Bill DeWitt is not your friend.
Our favorite sports teams are owned by wealthy individuals and their success hinges on the whims of these billionaire dilettantes. Some owners are more attentive, more skilled at management, and put more resources into the teams. It’s easy to think of these owners as “the good ones.”
That’s the reputation that the DeWitts have largely cultivated over the last 25 years. In that time, the Cardinals have built a new stadium (bolstered by public financing), and produced almost unparalleled success on the field. It’s easy to imagine the peasants who root for, say, the Marlins, telling us - the peasants who root for the Cardinals - “you should be happy.” In the feudal system of Major League Baseball, there is a certain logic to that.
But just because our lord has been more kind to his tenants than most does not mean he is our friend. And don’t think for a moment that his goodwill for the Cardinals franchise outstrips his own self-interest.
Elsewhere in the interview, DeWitt explains his comment about profitability by saying the team has grown from 240 to 400 employees, and puts a lot more money into training, conditioning, front office and analytics. “It’s a bit of a zero sum game,” he says.
That’s quite the peek into the mind of an owner. He wants a pat on the back for reinvesting the profits of the team into making the team better. DeWitt - an extremely rich man from inherited wealth and business interests outside baseball - feels he should be credited for not also pocketing annual profits from the Cardinals.
Some owners do exactly that. So again, I suppose some fans look at the DeWitts and say we’ve got “one of the good ones.” But this framework is so grossly skewed. Are you really a “good” owner because you merely reinvest the money you make in improving the team? Shouldn’t that be the absolute minimum expectation for individuals of such immense wealth they can purchase billion dollar sports teams as their playthings?
I’ve been playing Super Mega Baseball to pass the time. As with any baseball simulation, the only options are to reinvest your profits in new players or development. There is no option to purchase Eva Longoria’s Hollywood Hills Home.
The financial records of MLB clubs are notoriously secret, even from the Player’s Association. And it’s easy to fall into a rabbit hole of accounting-speak when discussing what we think we know. But we know DeWitt and Friends bought the team for $150 million, then immediately sold two included parking garages and land parcels for $101 million. So in essence, the franchise itself cost $49 million in 1996. In the most recent Forbes valuation - the best estimate we have - has the team valued at $2.2 billion.
Despite the unprecedented inflation of franchise values across baseball, the idea that owners should accept any kind of operating loss at all, even for the clear good of the game and of the fans, is off the table for DeWitt. And as one of the most influential owners in the sport, it’s fair to assume he speaks for ownership on the whole.
“We’re trying to convince [the players] more games is beneficial to the sport,” DeWitt says in the interview.
The players proposed a season of 114 games. The owners are currently threatening to institute a season of less than 50 games. How on earth could someone suggest it is the players who need to be convinced to play more games?
The sticking point, of course, is that the players want the owners to abide by their March agreement and pay players a pro-rated salary for however many games are played. Ownership, meanwhile, insists the players take yet another reduction in pay. The owners have landed on a number they think they will make this season and are unwilling to risk an operating loss for even one season.
It would be more accurate for DeWitt to say “we are trying to convince the players to play more games for less money.” Geez, hard to imagine why they aren’t jumping at that offer. If your employer cut you to half-time but then gave you the option to work 30 hours for 20 hours worth of pay during a global pandemic, wouldn’t you?
The only real positive to take from DeWitt’s interview is that he is confident there will be a season. He notes that the owners have the right to institute a season at the previously agreed pro-rated pay, and says he “firmly believes” that will occur, with a shorter schedule of around 50 games.
In other words, owners will agree to a season, but only at a length where they don’t risk losing money, even for a single year. And hey, I’ll be happy for that. I love baseball and would love to see Major League Baseball played. But I’m not going to throw a parade for the billionaire owner of the St. Louis Cardinals simply because he agreed to give us a season once he was convinced he wasn’t going to lose any money.