SBD/Issue 59/Franchises

Cards Chair Bill DeWitt Jr. Refutes Claims About Team's Economics

DeWitt Calls Suggestions Cardinals
Generate $250M "Way Off Base"
MLB Cardinals Chair Bill DeWitt Jr. Saturday said "much of what has been presented or insinuated about our economic situation is distorted or is simply untrue," according to Joe Strauss of the ST. LOUIS POST-DISPATCH. DeWitt said any suggestion that the club generates closer to $250M than $200M is "way off base." Agent Scott Boras recently said of the Cardinals, "They're not a mid-market franchise. They're Philadelphia." Strauss noted the comparison "equates the Cardinals, who technically sit in the No. 21 media market based on households, with the nation's No. 4 market." The Phillies ended last season with a $136M 40-man payroll, compared to the Cardinals' $100.8M, 12th highest in MLB. Strauss noted that figure "won't increase significantly anytime soon." For "at least the next several seasons the club says it hopes to maintain 'relatively fixed' payroll around" $100M, "barring declining attendance." Cardinals President Bill DeWitt III "helped place the figure in context during a Thursday presentation to faculty and business students at Webster University with a pie chart showing player salaries representing roughly" 50% of the team's expenses. Team operations, player development and facility operations "each consumed about" 10% of the expense pie, while interest on debt and business operations "complete the picture." The team had $194.3M in expenses last season, "up from $164[M] in 2005, the Cardinals' final season in old Busch Stadium." DeWitt Jr. said that a $115M payroll "would leave the franchise 'operating at substantial cash deficits.'" Meanwhile, Strauss wrote new Busch Stadium was "advertised as a boon that would permit the franchise to escalate payroll," but the ballpark has "in some ways forced ownership to keep it static." DeWitt Jr. confirmed that the team "pays more than" $20M annually in principal and interest to "meet two instruments that enabled the club to finance its portion" of the $365M ballpark (ST. LOUIS POST-DISPATCH, 12/6).

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