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Re-evaluating the Cardinals’ Offseason (In Light of Their Self-Imposed Budget Constraints)

The Cardinals have hit their budget cap. I was way off. What went wrong?

Pittsburgh Pirates v. St. Louis Cardinals Photo by Dilip Vishwanat/MLB Photos via Getty Images

I was way off.

You know, every year I do this payroll thing, tracking the Cardinal’s Opening Day spending and estimating their budget based on their roster, previous behavior, and reporting. Every year I have a significant number of people tell me that my numbers are too low. I’m too conservative. This is the year that the Cardinals push past their payroll norms and spend some of that dry powder that they’ve hoarded for a decade.

Every year I tell you all that my budget projections, conservative though they seem, are typically higher than what the Cardinals actually do.

My estimates for the club’s Opening Day 26-man roster budget have been slightly over what the Cardinals have spent using my method of accounting almost every year I’ve written on this site.

You would think I would learn.

Take last year as an example. Heading into 2023, I estimated that the team would carry an Opening Day budget of $185M. They ended up spending $177.5M once all the arbitration wins and losses, contract extensions, and signings were finalized. Why was I over? Because the Cardinals came in lower than they expected. The club admitted that they were below budget on spending and had tried to make additional moves that never panned out.

My budget projection entering last season felt good. It was relatively close to what the Cardinals did. I could easily account for the difference. I likely would have been right on if they had succeeded in fulfilling their entire offseason plan.

Then the 2023 season happened. The club lost 91 games. They became sellers at the deadline, shedding a bunch of cash. They entered this offseason with massive needs in their rotation and a spoken urgency to return to contention.

Surely that would lead to a budget increase this offseason? The old proverb often holds: You have to spend money to make money. The Cardinals would have to spend entering 2024 to re-secure their ticket sales, re-invigorate their fanbase to watch the games, and project as certain contenders for MLB’s post-season payday.

Early comments from the club supported this hypothesis. In early October, Bill DeWitt III stated that the Cardinals would “climb the payroll rankings” this offseason and that ownership was committed to doing what was necessary to revamp the organization’s approach to pitching.

How can “climb the payroll rankings” be interpreted as anything but an intention to raise payroll for the 2024 season?

Other comments supported that assertion. Derrick Goold has consistently reported that the club intended to return to its previously established budget framework. What does that mean? Instead of acquiring talent (i.e. taking on money) at the trade deadline in 2023, the team traded players away (i.e. dropping money). That pushed the team’s final 40-man payroll figure a lot lower than they expected and planned entering the season. They budgeted to spend over $200M in 40-man Luxury Tax payroll. They finished far short of that.

“Returning to their previous budget levels” implied that Mozeliak could spend to bring the team back to where they intended to be: a 40-man final payroll that would eclipse $200M.

Why am I re-trodding this well-traveled ground? This is the kind of information that feeds my projections for the Cardinals’ Opening Day payroll budget. I make my projections and evaluate what the team does based on this sort of data.

Let me run my logic entering 2024 again:

* If the club expected their final payroll in 2023 to be in the $200M range...

* And they expected to return to those totals for the 2024 season...

* And they were admittedly under budget for Opening Day last season…

* And Bill DeWitt III has already stated that the club will climb the payroll rankings this offseason...

* And the team has a historic average of raising Opening Day payroll by 6% every season (I didn’t mention this above but did the research in a previous payroll post)…

Then what should I have set as a reasonable Opening Day payroll projection for the 2024 season?

I took their actual 2023 Opening Day payroll - $177.5M - and added an 8% bump in spending – just 4% over what I projected last season – and landed at $192M.

Based on history, the club will add between $15-20M in trade deadline additions, player bonuses and benefits, and minor league 40-man payouts between Opening Day and the end of the season. A $192M Opening Day projection should become a $207-$212 40-man end-of-season projection. That’s probably above their likely 2023 total, but the club has a strong history of increasing payroll on a year-to-year basis.

$192 seemed reasonable. It was defensible. It was maybe a bit more aggressive than normal, but the Cardinals were also in a more desperate situation than normal. I had a lot of you tell me that I was too low.

Back to my opening line: I was way off. WAY off!

Embarrassingly wrong.

Except I don’t feel like I’m the one who should be embarrassed.

Here’s where the Cardinals’ payroll sits as of today. (Please note that I have updated the projected arbitration figures with their most recent estimates.)

After the acquisition of Andrew Kittredge and his $2.3M estimated arbitration salary, the Cardinals can project an Opening Day 26-man payroll of $165M.

$165,000,000.

It’s a shockingly low total.

That’s $12.5M under their actual Opening Day budget for last season.

It’s $27M under the budget I projected for 2024.

Not only was I over on my payroll estimates again, I was over by the going AAV of a Cy Young contending pitcher.

The Cardinals did what I - and pretty much everyone else - never considered they would do. They cut their payroll. Significantly. It’s a cut larger even than the years following the COVID pandemic.

It’s clearly true. And it’s left me a little flabbergasted.

(Aside: Some of you will want to look at Fangraphs to check or disprove my numbers. There, you will see that they have the Cardinals projected for a 2024 40-man payroll of $205M. Their number for the Cardinals’ guaranteed and pre-arb contracts is inexplicably high. They also have a few other oddities in their accounting. They have the Cards on the hook for $177M in guaranteed and pre-arb contracts, a number I can’t replicate. They also have quite a bit of estimated spending baked into their final 40-man Luxury Tax numbers, but it’s not enough to account for a $40M difference between my math on Opening Day and their final payroll. Simply put, because their first number is very high, and their end-of-season payroll additions are high, both numbers end up being much higher than is reasonable. I can’t explain what they do. I can only do the math myself and try to be as accurate as possible.)

What the Heck Happened?

First, I want to establish the fact that the Cardinals are likely done spending. After all, there’s still a lot of offseason left and a lot of intriguing players still available. The Cardinals could still spend up to my expected budget totals. (And probably should.) They won’t. Here’s why.

MLB.com Cardinals reporter, John Denton, shed some light on the budget issue in a recent appearance on ESPN 101’s BK & Ferrario. I’ll embed the entire show below. The relevant section with Denton begins at around the 2-hour and 25-minute mark.

After speaking extensively with Bill DeWitt III last week, Denton reported that the Cardinals’ payroll was just about maxed out. The club was not going to pursue multi-year deals for a reliever or take on another double-digit salary figure. (Like a 3-year $30M deal for Jordan Hicks.) DeWitt’s bottom line was this: the Cardinals had a little budget space left. After that, any significant money that came into the club would have to be matched by money going out.

How little space was left? We can make some educated guesses. Reports late last week indicated that the front office was looking to bring in one additional reliever (not two) and that player would need to land in the $5M range. That’s essentially a verified report on the Cardinals’ remaining budget space.

Then we got tangible proof of the accuracy of all this reporting. On Friday afternoon, the Cardinals moved Richie Palacios and his $720k pre-arbitration salary for Andrew Kittredge, an arbitration-eligible reliever with a $2.3M estimated price tag.

The Cardinals got their reliever. They stayed under their reported $5M cap. That most likely tapped themselves out on remaining budget space. Maybe they have a million or two left to work with, but by the most recent reporting, the Cardinals are likely done adding payroll for the winter.

Why was I, and so many others, so far off the Cardinals’ actual budget projections? What happened to cause them to cut payroll?

In his interview with John Denton, Bill DeWitt III re-emphasized the uncertainty surrounding the Cardinals’ current television deal. With Diamond/Bally in bankruptcy, the club knows that their billion-dollar broadcast deal will terminate at the end of the season. They believe they will receive Bally’s payments for most of this season, but all those future payments are gone like a fart in the wind.

It’s no coincidence that Bill DeWitt III has been the team’s public voice on this issue. He runs the business side of the organization. The business suits and their Clark Ave. accountants cannot project future revenue with their normal level of security.

That lack of financial certainty is giving the Cardinals’ ownership group budgetary cold feet.

We can and will argue about the validity of Denton’s reporting and how to interpret DeWitt’s statements. We can take our own guesses at what the Cardinals will do in 2025 to get their product into the hands of their still-rabid viewership through cable, streaming, or other outlets. We can debate how many boatloads of money they’ll make by selling their top-of-the-sport TV ratings to broadcasting outlets and advertisers. And don’t kid yourself, they will make boatloads.

What I don’t think we can debate is that, right or wrong, valid or invalid, the club has allowed the uncertainty over the club’s broadcasting situation to dictate their approach to spending and that has resulted in the gutting of the budget for the 2024 season.

Not surprisingly, these budgetary restrictions are evidenced in the moves Mozeliak and his staff have made. We can explain pretty much everything the club has done this off-season by assuming John Mozeliak was operating under a strict mandate to limit spending to around $165M on Opening Day.

* Non-tendering Andrew Knizner and Dakota Hudson.
* Not approaching Aaron Nola before he re-signed with Philly.
* Targeting Lance Lynn and Kyle Gibson in early-offseason one-year deals with many better options available on the market.
* Significantly backloading Sonny Gray’s deal.
* Dumping Tyler O’Neill’s salary for pre-arbitration relievers.
* Drafting a Rule 5 reliever who will demand a roster spot that could have gone to an established producer.
* Nabbing Kittredge when so many higher-priced late-inning relievers were still available.

Some of these moves were the right moves from a roster perspective. They aren’t just about the money. Some of them are, though. All of them fit the activity of a team in need of a major roster makeover with a very limited budget.

Now, why did DeWitt and Mozeliak say the things they said early in the offseason if they were only going to turn around and cap payroll well below last year’s standards? I can’t help you there. They said what they said and they did what they did. Their actions across the entire offseason do not indicate to me that their budget changed at some point in the last few weeks. This was always the way the budget was going to be. I don’t know why they didn’t just say so from the beginning. They’re already hearing about the inconsistency in their messaging from fans. The same fans, by the way, whom the club will ask to buy their tickets and watch their broadcasts.

Re-Evaluating John Mozeliak’s Offseason

That’s where the budget is. That’s why it is what it is. That’s why I was so wrong, even when I should have been right. Let’s shift gears and talk about how Mozeliak and his front office team handled the offseason in light of their budget constraints.

I started this offseason by stating that I would not accept any more “half-measures” from the Cardinals. I think I proved that in my “Master Plan” series, where I laid out a path for the Cardinals to return to contention in the National League by acquiring three starters who are “better than Miles Mikolas in arm talent” and two swing and miss relievers. I’ve judged the Cardinals’ moves based on those guidelines.

Those plans were centered around my $192M projected budget.

First, I can’t classify the club’s adherence to an Opening Day 26-man budget of $165M as anything more than a half measure. It’s more like a quarter-measure.

While I understand that there is uncertainty facing the club’s TV revenue, I refuse to believe that the club does not have projections and plans in place to mitigate those uncertainties immediately upon the termination of the current contract with Bally. Other teams are already using other models and they are making money hand over fist. Baseball is without question a profitable industry. The Cardinals have one of the largest (by ratings) and most loyal markets in the industry. Switching to a more direct way to get their product to fans should lead to a revenue increase, not a decrease. This is a significant opportunity for the Cardinals. Not a serious threat.

Secondly, as I’ve argued from the beginning, the best way for the club to secure its financial future is to secure a winning product that fans want to pay to watch – in person and on their televisions.

The Cardinals ownership group is ultra-conservative and Bill DeWitt has a long history of working to control player salaries and secure a favorable profit margin for low- and mid-market clubs. The Dodgers are as much an enemy to DeWitt as the Player’s Union.

This ownership group is not getting an ounce of sympathy or defense from me for cutting payroll in this critical, franchise-defining season. It is unequivocally the wrong decision.

John Mozeliak, though? He doesn’t set the budget. He has input in those decisions, but they are above even his lofty pay grade.

John Mozeliak, as President of Baseball Operations, and his front office staff have to build the best team they can with the light hand the DeWitt’s deal out to him.

Mozeliak hasn’t met the standards that I set with the budget I proposed. I am underwhelmed by what he has done. I am not at all convinced this team will win the division or make the playoffs if they don’t.

But I can’t judge Mozeliak by the impossible standards I set based on a faulty payroll figure. I was wrong about the Cardinals’ spending potential. So I was also wrong about what they could and should do.

What if I judged Mozeliak’s offseason based on his actual $165M budget cap?

Simply put, the front office has done a remarkably good job considering their situation.

On October 16, before the off-season had started, John Mozeliak already had $146.3M in salary commitments on the books for 2024.

On January 8, John Mozeliak has $165M in salary commitments for 2024.

In between he signed one of the best pitchers in baseball last season – Sonny Gray – and convinced him to accept just $10M in salary this season.

He brought in Kyle Gibson, an older starter who produced 2.6 fWAR last year and has been worth 2.6 fWAR or more in four of the last five seasons.

He brought back fan-favorite Lance Lynn, a former #2 starter who is on the downside of his career but still carries a league-average production on a per-innings basis. Lynn is the club’s #5 starter.

He’s added significant swing, miss, and chase ability to the club’s bullpen depth with Kittredge, Robertson, Fernandez, Rodriguez, and O’Reilly.

A team that lost 91 games last season is now projected by ZiPS to win between 85-90 games this season. Mozeliak did that by adding $19M to the budget.

That’s kind of remarkable.

These are not the moves I would have made with the budget I projected. Still, I can’t imagine how any GM would have done better with the limited funds that they had.

Even with a 85-90 win projection, this team is very vulnerable. An injury to Gray or Gibson (I’ll explain that one in a future article) could derail this rotation. If Jordan Walker or Masyn Winn don’t take a step toward their potential, the club’s offense and defense will suffer. Obviously, it would help the club’s postseason hopes if Goldschmidt or Arenado returned to their MVP levels of production.

It’s going to take a large measure of luck for this Cardinals’ club to rise to the full-measure levels I expect for them. They are not equipped on paper to contend with the best teams in the National League. Especially after the moves the Dodgers and Braves have made.

But they do have a chance to win a weakened NL Central. It is a credit to John Mozeliak that he has brought them to where they are right now. It’s a shame Bill DeWitt won’t let him do more.