Projecting the 2023 Payroll

It’s that time of year again.

The leaves are turning and starting to fall.

Creepy crawling kiddos are prepping for their annual sugar-induced neighborhood rampage.

Soups. Chili. Apple cider.

Blankets so you don’t have to turn the heat on yet.

And I? I am tucked all warm and cozy into the Excel spreadsheet on my laptop.

Yes, it’s payroll season! That annual tradition where I demonstrate my ability to do simple mathematics and format it in an easy-to-read way so that you can yell at me on the internet. Trick or Treat!

Calculating Payroll: The Nuts and Bolts

Let’s go ahead and get the nuts and bolts out of the way. Every year I write these payroll articles striving to provide you, my faithful VEB readers, with the most accurate information on the Cardinals’ spending that I can. Yes, this information is readily available on sites like Spotrac, Fangraphs, and Cot’s. Each one does a marvelous job. However, because these sites take a universal approach to the information and have multiple teams to cover, there can be variations.

This is particularly true of Nolan Arenado’s contract. The Cardinals’ third baseman has not one but two different differals written into his contract, some of which are paying out right now. The Cardinals also have money coming from the Rockies in a variety of installment amounts, all dependent on a variety of factors.

One can account for that money in a variety of ways. And each site makes its own determination on how to best present that money.

My approach is simple: I apply money in the year it is received/spent. That’s it.

This year the Cardinals will get a $16M windfall from the Rockies if Arenado does not opt-out. That $16M goes into the payroll. Likewise, the two deferrals from Arenado’s contract – one payment and one discount – go into the payroll just as they are.

The Cardinals might not do it that way. They might apply the money from the Rockies to pay off property debt. Or buy a hundred new condiment stations. Or put up a statue of Albert Pujols. All I know is that money is from the Rockies because of Nolan Arenado’s contract, so it gets listed as funds to offset Nolan Arenado’s contract.

The result is a final Opening Day payroll number here at VEB that might very well be different from what you see at the other sites. I acknowledge that. I try to note the differences. I know it gets really confusing for people who click on Fangraphs and take that as gospel but it’s the nature of the system. Teams don’t exactly open their books up for public scrutiny.

Secondly, the method I present is not how the Cardinals calculate payroll. They have a 40-man roster to track and project. They are much more focused on what their final payroll will be relative to their operating budget.

We’re not here to figure out the Cardinals’ accounting methodology. We are here to figure out what they have to spend this off-season on player acquisition.

So, I stick with a 26-man number. Yes, I could put all 40 players in there, but the chart would just get cluttered with insignificant numbers and a bunch more approximations about service time, etc. You don’t care about that. I don’t care about that.

Our goal is to provide accurate information to guide our off-season conversations. Opening Day 26-man roster is all we need to be able to do that.

Enough of that. With the fine details out of the way, let’s just dig into the numbers. Here is version 1.0 of the Cardinals’ 2023 payroll, accurate as of Oct. 15, 2022.

Guaranteed Contracts

As of today, the Cardinals have only $84.75 million committed in contracts for the 2023 season. Those are your hard-and-firm contracts, the value of which will not change unless there is some kind of renegotiation or the player is traded.

Of course, this does not include contracts for Yadier Molina, Albert Pujols, and Adam Wainwright. The first two are heading toward retirement. Wainwright has made his decision but there is no announcement as of yet as to his future status. So, he’s out for now. It also doesn’t include the contracts of other free agents, like Corey Dickerson.

If I’m being honest, it’s a bit disturbing to consider how little of their roster the Cardinals have locked up. They enter this offseason with just seven players under contract. That 7 includes the minor arb buy-out deal given to Gio Gallegos and the forgettable contract of Drew VerHagen. For 2024, the Cardinals have only four players locked away: Arenado, Goldschmidt, Gio, and Steven Matz.

The future of the St. Louis Cardinals is almost entirely in the hands of their draft and development system. The pressure is on the newly extended Randy Flores and his (excellent) team to provide the talent to fill out a competitive roster, either through promotions or trades.

The flip side is that with so little money committed, the team should feel comfortable locking money away through free-agent additions or trades. They have the space for talent on their roster and in their long-term planning.

Arbitration-Eligible & Pre-Arbitration Players

The Cardinals have 11 players eligible for arbitration this season, including Jordan Montgomery, who is set to go through this process a fourth time. Contract amounts included in the chart come from MLB Trade Rumors and are subject to change. Some players will sign deals before their hearing. Some won’t. That makes these numbers estimates, but it’s not going to swing things too much one way or another.

Lastly, the Cardinals will fill out their roster with pre-arbitration players, who are set to make somewhere close to the $720k league minimum salary. This is a payroll projection. It is not a roster projection. For now, I put in enough names to bring the roster to 26 and put little thought into which names I used.

Estimated 2023 “Opening Day” Budget

Now for the fun part. The Cardinals are sitting at $130M in likely payroll commitments before the offseason even begins. How much do they have to spend this offseason?

Last week I put a beta version of this payroll document out on the internet. In that version, I proposed a preliminary budget of $157M.

I had several reasons for going with that number. The primary one is that the Cardinals have spent the last few seasons holding payroll down in an attempt to recover revenue lost during the 2020 season.

This was especially evident in 2021 when ownership called for a payroll cut and the team landed about $20M below where they would have been had the pandemic not happened. I didn’t even try to project a budget that season; instead, I focused exclusively on how far down the payroll could go.

Knowing this was likely to continue, I was fairly conservative with my projections heading into 2022 when I predicted a $155M Opening Day payroll. Again, the Cardinals fell short of even my conservative estimates. They settled at $152M and that included the unexpected late signing of Albert Pujols.

Heading into this season, I expected to keep things conservative. $157M was just that.

Of course, fans wanted to argue with me, stating that the Cards could spend more and should spend more. Well, of course, they can spend more. Of course, they should spend more. But cans and shoulds aren’t wills and ares.

We’ll write dozens of articles this winter on the coulds and shoulds. When it comes to payroll, though, it’s well-reasoned accuracy that makes for meaningful off-season conversation.

The second reason I picked that $157M number was historical trends. This chart tracks the Cardinals’ Opening Day payrolls since 2012:

Of particular note was the trend the Cardinals were on since their large payroll bump in 2016. That season they added 16% to payroll, jumping from $122M to $146M. Since then, though, the Cardinals went +2%, +7%, +2%, +1%, before the -16% pandemic cut. They added 7% this past season.

That gave me a range to consider: 1-7% has been their standard operating procedure when they weren’t slashing and burning. Even though the club is more frequently on the low side of that range, I decided to split the difference at 3.5%. $152 x .035 + $152 = $157M.

You might notice, though, that my current projected payroll is not $157M.

It’s $165M.

Here’s the good news!

$165M would be an 8% increase in payroll over last season. It would be out of character with recent Cardinals trends, but not completely unreasonable considering some of their larger payroll bumps in the past.

Why did I change my number from the beta version?

The answer is simple: reliable information.

The more I’ve done these payroll articles, the more attention they’ve gotten and the more knowledgeable people have been willing to provide me with information to help improve their accuracy.

After throwing the beta version out there, I heard from multiple sources that I respect. They all told me two things:

1) My projections were below what the Cardinals expect to spend.

2) The club is done recovering lost revenue from the 2020 pandemic season.

We knew this past season was a windfall for the Cardinals. They were back to their old attendance levels with 3.3M fans. They got to host a playoff series, albeit a short one. I know ticket prices were up. I’m sure merchandise income was, too. Add it up and that has given the Cardinals the financial confidence they need to put the financial repercussions of the pandemic behind them.

The Cardinals are back to normal.

And they plan to be back to normal levels of spending.

What is that? Before the pandemic struck in spring of 2020, the Cardinals were on track for just over a $164M Opening Day payroll.

I have decided to propose an 8% increase in spending this season, taking the Cardinals to $165M. That would be the highest payroll in franchise history.

With that total set, we can work backward. Based on their current payroll obligations, including estimates for arbitration and pre-arb salaries, I assert that the Cardinals have about $35M to spend this offseason.

That’s just enough for them to do something interesting. And that available cash will probably grow.

Can the Cardinals Save More Space?

The answer is definitely yes. Here are a few places where the Cardinals could trim payroll:

1. Paul DeJong – DeJong seems very unlikely to return to the Cardinals. He’s set to make $9.17M, which is more than they would want to pay for a backup shortstop, and he did not hit well enough to even consider displacing Tommy Edman from the position. There will probably be a team out there who would give him a chance to show he can get back to his one-time All-Star form. The Cards probably can’t expect to get much of a prospect in return in a deal, but they could get a little bit of his salary covered. Maybe $3-4.5M saved tops.

2. Jordan Montgomery – Montgomery is set to make $10M in arbitration and he should earn every penny of that. As a free agent at the end of the season and still just 29 years old, he would be a strong candidate for an extension. If the Cards do that, they would likely spread the money out over time. That would save them a little ($1-2M) this season.

3. Non-Tenders – the Cardinals aren’t big on non-tendering players, but I think they could have several this season. That includes Chris Stratton and his $3.5M arbitration estimate. Alex Reyes will not make $2.85M to continue to recover from another bout of injury. His situation is similar to Trevor Rosenthal’s and (I think) John Brebbia’s. The Cardinals let both go to try to find rehab deals as free agents. I could see the same thing happening here.

4. Dakota Hudson – Hudson is another possible non-tender, but at just $2.7M, I don’t think the Cards will cut him loose. It’s more likely that they tender him and attempt to include him in a trade. He doesn’t have a ton of value, but a cost-controlled starter with service time remaining and intriguing upside is always going to draw interest.

Those moves could save the Cardinalsaround $13M in additional payroll space.

Now the Cardinals have $48M to spend and we’re really getting somewhere.

How will they spend it?

This is where you take over. I’ve given you the money, the estimates, the arguments, and the math. I’ll publish multiple versions of this chart and story throughout the offseason as more information comes out and signings come in.

The first piece of news will likely come from Adam Wainwright. If Wainwright decides not to retire, I believe the Cardinals will bring him back, despite their stated desire to add “swing and miss” stuff to their pitching staff.

If he does return, pencil Wainwright in for at least $15M of that available payroll. It could easily be higher than that. I would be shocked if it was notably lower. Yes, Wainwright scuffled down the stretch this season but he didn’t do anything to cut deeply into his actual value. He still produced 2.8 fWAR and had a 3.66 FIP. He didn’t give the Cardinals an overly discounted deal in ’22. Why would he do so in ’23?

Wainwright’s presence essentially finishes out their rotation, especially with Hudson, Pallante, Thompson, Woodford, and Liberatore currenlty under team control and capable of starting as needed.

If he does not return – or the Cardinals don’t choose to bring him back – I would like to see the Cardinals invest a significant percentage of their available payroll in a #1/#2 caliber starter.

Beyond that, it seems extremely likely that the Cardinals will bring in an experienced catcher, preferably on a short-term deal to give Ivan Herrera a bit more time. The Cardinals have more than enough available space to make such a move through free agency or trade. Check out Gabe’s article on Sean Murphy for a preview of that market.

The rest of the budget will be spent on shoring up the bullpen and providing some more platoon options on the infield and outfield. It’s too early to even speculate about names there.

All in all, I think this article should leave Cardinals fans optimistic. The Cardinals are done with their pandemic payroll. They are free to spend. They have holes to fill. There are players available. It should make for an interesting offseason!