CODNP Day 65: Prepare For Smaller Payrolls

During the course of this whole pandemic thing, finances have been a huge part of the discussion.  As we know, the return of baseball at all in 2020 relies in large part to the owners and the players coming together over financial matters, mainly the pay to the players.  Money makes the world go ’round and it’s difficult to divorce any issue from the underlying financial repercussions, even when we are talking about a health crisis.

Ken Rosenthal (of course) had an article over at The Athletic talking about how not only do the players and owners have to sort things out, but there are some issues the owners themselves have to deal with, as it looks like revenue sharing won’t happen in 2020 because there won’t really be any revenue to share.  In among all the normal good stuff was this little tidbit.

The Cardinals are another example of a high-payroll club that draws the majority of its revenue from gate-related sources.

I honestly didn’t realize that any team was drawing the majority of its money from gate income, what with the major TV contracts that are out there now.  Between the contract with FOX Sports Midwest (and remember, they have an equity stake there, though I don’t know how it plays into the discussion) and the share of the national broadcast contracts, plus other ancillary revenue streams, I would have thought that the gate was important but not overwhelming.

However, it does make sense.  There’s a reason the Cardinals continue to push for 3.2 million or more tickets sold.  They usually get there as well, with only the Dodgers (in a stadium that holds 11,000 more people in the second-largest metropolitan area in the country) regularly ahead of them.  The budget takes into account that revenue and when it’s not there, there is a lot of scrambling to be done.

William Juliano over at The Captain’s Blog, a New York Yankees site that was a member of the old Baseball Bloggers Alliance I used to run, has some very interesting calculations about what the owners will be losing this year.  It’s notable that, if the players agreed to the 50/50 revenue split, the owners would actually make a profit instead of losing $1.5 billion dollars.  So you can see their motivation there.  Anyway, you can see that, without revenue sharing, the Cardinals will be one of five teams that lose money if there is no stadium revenue.  Whatever your thoughts about how the DeWitts have spent their money (or if they should have spent more), the fact is that they’ve got a significant outlay for players.  Normally, it’s not an issue, but when you lose a ton of money, it kinda is.

Jayson Stark confirmed in a Twitter exchange that whether a team gets paid all year from its TV deal depends on the contract language, so some teams may get the full amount when there are no games.  Most likely, though, there will be at best some sort of prorated amount depending on how many games can be televised after the season begins (something that still hasn’t been determined, though if teams play at home you probably get to see all the games).  That might help the situation if they are still able to get the full amount, but that seems unlikely to me.  It’s still not going to be enough.

So what does all this mean for the long-term?  A couple of things.  One, as much as I have been on the Nolan Arenado bandwagon and would love to see him in St. Louis, the idea that the Cardinals would take on even part of that salary now seems pretty unlikely.  The best case for that sort of deal would be that they trade off some contracts that expire in the next year or so that allows the two teams to have an equal burden in 2020 and 2021, with the Cards taking on more of the deal after that when the revenues would be back in line with expectations.  That’s a tough ask, though.  Does Colorado really want Dexter Fowler, Brett Cecil, and Matt Carpenter?  I mean, they’ll be hurting as well and maybe they can’t bounce back as quickly as St. Louis can, but if they are looking for financial freedom they probably won’t find it with a team losing money this season.

I also feel like this keeps the Cards out of all but the smallest markets come free agency.  Cecil comes off the books this year, which is something, and Yadier Molina is going to make much less in 2021 wherever he plays.  Andrew Miller‘s option probably won’t vest.  There will be some arbitration issues, most notably Jack Flaherty, but I think the Cards most likely turtle up for a bit and try to start building back the coffers.  Which means the team you see in 2020 is going to look a lot like the team you’ll see in 2021 and 2022.  It’s a good team and you have to hope the young (read cost-controlled) talent coming up can be as good as expected.  It would surely be helpful if Official Prospect of the Blog Dylan Carlson put up some great seasons while being paid the league minimum.  It also helps that one of the teams that would be taking a bigger financial hit is the Cubs (and their minor league system may not be up to the challenge).  Playing in the NL Central may allow the Cards to stay competitive while regaining financial wherewithal.

It’s not a great thing, but it’s an understandable one.  Even if it wasn’t this bad, the odds of the Cards making a big move were slim when they could use this as an excuse.  However, it looks like more a reason than an excuse, which doesn’t bode well for winter daydreaming.

Series Navigation<< CODNP Day 64: What a Time to be a RookieCODNP Day 66: What Baseball May Look Like >>

Next Post:

Previous Post:

Please share, follow, or like us :)

Subscribe to The Conclave via Email

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Join 16.3K other subscribers



Other posts in this series: