Scared of the Future
The Cardinals aren't sure what's coming and it seems to terrify them.
It wouldn’t appear that the decision makers for the Cardinals are Trekkies.
Even if you aren’t a die-hard Star Trek fan, you know the words that are most associated with it, in all their infinitive-splitting glory. “To explore strange new worlds….to seek out new life and new civilizations….to boldly go where no one has gone before.”
Boldly go.
That’s never really been the Cardinals’ motto, though they’ve done things in the past that would be considered bold. Heck, the first two moves of John Mozeliak’s tenure, shipping Scott Rolen off for Troy Glaus and Jim Edmonds for some AA semi-prospect (whatever happened to that guy anyway?), would probably fall into that category. There have been some bold actions in the past, though some (like the Nolan Arenado trade) had their aggressiveness tempered by outside forces, such as Nolan’s direct influence in getting to St. Louis.
Being cautious and careful is a real good way to be successful for a long period of time. As much as fans have clamored for a big move on almost a yearly basis, there’s no doubt that the track record of the front office stacks up to anyone if you look at the big picture. It’s also fair to say that the law of diminishing returns has come into play here and now we have finished a trade deadline that has the Cardinals two games out of expanded playoffs instead of 3 1/2 games up in the division (as they were in 2006). Even in 2011, when they were 5 1/2 out of the wild card, they were just 2 1/2 out of the division (and, if there had been expanded playoffs then, they’d have been the third wild card). If it wasn’t for the complete debacle of last year, this year wouldn’t be held up as any great shakes.
Still, it’s not a bad thing to be cautious. I would much rather the approach the Cards have taken than the Padres, I think. San Diego has had a lot of buzz, a lot of excitement, a lot of good vibes but nothing has really planned out for them and they wind up having to trade those players off within a year or so of acquiring them. I’m not big on the roller coaster or merry-go-round, depending on how you want to term it.
However, this trade deadline had a new wrinkle that we’ve not seen before. Suddenly, payroll matters.
I hear you screaming now, “Payroll has always mattered!” That’s true, to an extent. There’s a reason the whole “DeWallet” hashtag floats around regularly and why the Cardinals never seem to be in the mix for the top shelf of players in the winter. It’s why they wanted to trade for players like Arenado and Paul Goldschmidt instead of trying to sign them on the free agent market, because the cost certainty was important to them. They didn’t have to try to figure out what to offer, the price was already baked in. They knew what they were getting into.
There’s been a notable shift this deadline, though. Katie Woo has reported a number of times, including in this story, that ownership has given the front office financial restraints that they have to factor into their dealings. Basically, they aren’t wanting to add payroll this season or next, according to Katie, and the results here at the trade deadline bear that out.
It should be absolutely lauded how creatively Mozeliak and company filled two of the biggest holes that the club had with minimal resources, acquiring Erick Fedde and Tommy Pham for whatever Tommy Edman can give the Dodgers this year and next and a pitcher that hasn’t even made it stateside yet. It’s a great trade, sweetened by the fact that the Cards are getting some cash from the White Sox and either a player-to-be-named later (which, you would think, would depend on how much Edman is able to do) or cash from the Dodgers.
Which…well, let’s let Katie tell you:
Again, that’s smart negotiating and trading. Solid work all around and, if it wasn’t for the fact that the restraints had been mentioned earlier, might not have even raised an eyebrow.
The second deal of the deadline, today’s shipping of Dylan Carlson to the Rays, feels a little more like a deal that was hampered by the payroll issue, even though Mo attests that it wasn’t. There is no doubt that Carlson had limited value and there’s plenty of blame to go around for why that is. We’ve got injuries, we’ve got lack of production, we’ve got lack of usage. Mix them all in your preferred proportions and you get what Carlson was now. With the acquisition of Pham, the club also had less leverage with other organizations, even with the fact that they could have just optioned him to Memphis. That didn’t seem like something the club wanted to do, though, and with the clock ticking they had to do something.
Rumors aren’t really worth the paper they are printed on (and yes, I know, they aren’t printed at all but posted online), but there were links in the last 24 hours to Dylan Floro from the Nationals and Luis Garcia of the Padres in relation to a Carlson trade. Both of those pitchers seemed to be having better years than Shawn Armstrong, who wound up being the return for Carlson. So let’s look at the salaries:
Floro: 1 year, $2.25 million. Traded today to Arizona for a minor league third baseman which seems to have been a better return than Carlson.
Garcia: 1 year, $4.25 million. Traded today to Boston for four prospects, so again a better return than Carlson would have been.
Armstrong: 1 year, $2.05 million. Carlson’s salary was $2.35 million with arb years coming up.
When you see the return for the other players, it’s a little less clear that payroll issues played a role. If there were talks with those other teams, they probably had asked the Cardinals for Carlson-plus, which wasn’t what the Redbirds were interested in.
Part of blogging, at least for me, is working things out to see what they look like. While there’s a case that these being impacted by financial constraints, there’s as strong of a case that this was just what the Cardinals wanted to do. Carlson didn’t have the value they would like and they got what they needed in the other deal without giving up unnecessary resources.
Does that mean the whole premise needs to be tossed out? I don’t think so, though I also realize that I’m usually wrong about all these sort of things. Still, it should be asked, why are these payroll restraints, the limiting of payroll additions for the next couple of years, coming about now?
If you go by Roster Resource, which granted holds some estimates in their calculations, the Cardinals are at a luxury tax—sorry, competitive balance tax— payroll of $215.3 million after the moves of the deadline. That puts them $22 million short of the first threshold. It’s a little tight, sure, but it’s not quite to the level that requires an even balance of in and out.
Next year is, of course, a bit in flux. It seems clear that Paul Goldschmidt will not be here (or if he is, on a drastically reduced salary). It’s fairly likely one of Lance Lynn or Kyle Gibson will not have their option picked up, especially with the addition of Fedde. Giovanny Gallegos, who was cut to try to save money only to not unsurprisingly not have a trade market, will get a $1 million payout instead of his $6.5 million option.
However, Sonny Gray’s contract goes up by $15 million and some significant money could be added in arbitration. Lars Nootbaar, Brendan Donovan, Nolan Gorman, and Andre Pallante will be eligible for the process for the first time. Ryan Helsley will be in his third year of arbitration and likely will get a significant boost from the $3.8 million that he’s getting this year.
Still, the threshold also goes up to $241 million. They are currently on the books for $126.7 million. It’s hard to know exactly how much there will be for free agents and we don’t know arbitration numbers and the like but it’s also hard to imagine they get up to that level.
So what’s the concern? Why have they increased their focus on every dollar spent?
I have a guess.
Yesterday, Diamond Sports came to an agreement with Comcast, allowing the twelve teams that they have the rights to—including the Cardinals—to be shown on the cable carrier. The deal means that people will again have access to the Cardinals, though they will have to pony up for a higher tier of programming than they did before.
These negotiations had the effect of pushing the bankruptcy hearing scheduled for yesterday off until some unknown date. Which means that there’s still some significant uncertainty about how things are going to work for next year.
And if there’s one thing the Cardinals hate, it’s uncertainty.
The agreement with Comcast, along with the infusion of money from Amazon, would seem to give Diamond Sports more than a puncher’s chance of emerging from bankruptcy with its contracts intact, contracts that keep paying the Cardinals but also keep many people from watching due to blackouts or other access issues. (For instance, we have Optimum in my area and they also wound up dropping the RSNs due to negotiation breakdowns.) While that would seem to give ownership a little bit of confidence that the revenue stream can be fully planned for, it has been MLB’s position that there’s no way to trust that Diamond won’t completely cave in on itself in the near-term, even with this extra money. What will the effect of a higher tier on Comcast due to the revenue? How can teams be sure they won’t be dropped mid-season like Arizona and San Diego were?
The other side of the coin is uncertain as well. I have no doubt that the Cardinals are well down the road of planning their own direct-to-consumer package. At some point in the near future, probably 2025 if Diamond doesn’t survive, the club will have their own streaming option without blackouts. Given the reach of Cardinal Nation, they are the team best positioned to recoup most, if not eventually all, of what they are getting from their RSN.
Eventually.
How do you plan for next year and the year after, though? You’ve got to get a fan base converted over to your new product and that’s likely to take time, especially with some of the older fans that make up baseball’s demographic. Will they take in 50% of what they would have gotten from what is currently called Bally’s? 75%? 25%? There’s no way to know (they can make some reasonable guesses) and that means uncertainty.
If you can’t control the income, control the outflow.
We can argue until we’re blue in the face whether any of this should matter. We know that the DeWitt family has a significant net worth. We know that the value of their asset—the St. Louis Cardinals Baseball Club—has appreciated from the $75 million (net after selling the parking garages that came with the purchase) to well over a billion. We know there’s Arby’s franchises and real estate investments and Ballpark Village and all sorts of other things. There’s lot of money there and you could easily make the case that they can absorb any sort of losses that will come from revenue shortfalls.
That’s a fair statement, though obviously some of that wealth is only on paper until assets are sold. What is also true is that they aren’t going to do that. They run the baseball club with its own balance sheet and income statement and they want it to be profitable on its own merits.
Unfortunately, that seems to leave the team in a bit of limbo. We talked in the last post about how the future is not looking kind to the Cardinals due to a lack of upcoming talent and a payroll that seems to be bumping up against a ceiling of one sort or another. My friend and podcast partner David Jones believes it’ll be 2026, with some of the young talent like Tink Hence up and some of the contracts like Steven Matz and Miles Mikolas gone, that we can really see a strong St. Louis team. It’s a compelling case and if that can be the launching pad to another run of dominance, we can muddle through until then.
When you see that 2004 team get feted at Busch, though, it’s hard not to remember where things were and hope that, one day, they’ll get there again. When they do, there will probably be a lot of certainty in all facets of the game, both on the field and in the accounting department.
We started with Star Trek, we’ll end with it. There was a lot of Trek news that came out of San Diego Comic-Con this weekend. I have never watched Discovery, though I probably should, and as such the Section 31 movie trailer didn’t really excite me. I think of Section 31 as the subtle, hidden organization from Deep Space Nine and this made it seem more like Suicide Squad for the Federation. We’ll see how that plays out, I guess.
Lower Decks got a trailer for its last season, which starts in October. I was hesitant to try Lower Decks but it turned out to be a pretty solid show. The crossover last year with Strange New Worlds worked remarkably well. LD can get a little crude at times, but it also seems to have a real fondness for the lore (not Lore) of Trek and the characters are fun to be with. I do look forward to seeing how they wrap it all up.
Speaking of Strange New Worlds, all we got from it was an extended scene that shows that the humor is still going to be part of the show. I think SNW is the best of the new Trek (though obviously Picard season 3 had all the feels) and I hate that we have to wait until sometime next year—hopefully early!—before we get back to that crew.