The Cardinals have adopted a new strategy this year. One that includes cutting salary. Last year, according to Spotrac, they had a payroll of $175.9 million. This year, they have payroll allocations of $105 million. That includes Nolan Arenado’s salary which they are publicly trying to shed. It’s impossible to predict the exact final salary, but estimating between last year’s and current figures puts it around $140 million. That would be a 20% cut.
To put this into perspective, the Colorado Rockies last year spent $146 million in salaries and the lowly Chicago White Sox spent $132 million.
The Cardinals say that because of the reworking of the TV contract and the expected loss of revenue from the ticket sales, cuts are necessary. They contend that reduced revenue requires salary cuts. That statement contains significant issues.
The current ownership group purchased the St. Louis Cardinals in 1996 for $150 million. Less than what they spent on payroll last year. The value of the team is now at $2.5 billion. Yes, that is with a “B”. Last year, Forbes estimated the team’s revenue was $372 million and had an operating profit of $57 million; a 15% profit margin. That was an increase over the prior year. Even if the revenue drops 20% to $298 million, that is still a $44 million profit. This is not about being afraid they will lose money, it’s about not making as much.
What if the league didn’t allow them to do that? The MLB already dictates what some teams must spend on payroll. Right now there is no cap, but the teams that spend the most and make the most must share their revenue with lesser teams via the luxury tax. Those teams receiving that money are required to invest a certain amount on payroll. The Oakland/Sacramento/Las Vegas A’s are receiving 70 million dollars in revenue-sharing money and that means they must have a minimum payroll of 105 million. Why not take that extra step and do what all other professional sports leagues have done and have a hard cap and a hard floor for all teams?
The league spent $3.4 billion on salaries in 2024. If they all spent the same, that amount would be $113.5 million per team. Instead, the league is just fine with the Philadelphia Phillies spending $243.4 million and the Miami Marlins spending $31.5 million.
If MLB set the floor at $120 million, the players would make more. By promoting more parity, every player could improve their chances of reaching the playoffs and the World Series, therefore increasing their income. To the owners that say profits matter, then look at the current numbers. The Yankees had a payroll of $234 million. Their operating income was only $2.1 million. The Marlins had a payroll of $31.5 million and made $23 million in operating income. Should the Marlins be netting a higher amount than the Yankees?
What would happen to the Juan Soto’s of the league? Currently, the NBA puts an individual ceiling of 25 to 35 percent of a team’s budget based on years in the league on their top players. If we set the cap at $120 million with an allowance of 10 percent over and 10 percent under, then the max q team budget would be somewhere near $132 million. 35 percent of that would be $46.2 million. Last year only Shohei Ohtani made over that. Juan Soto was just added to the list. Soto would have to take 4 million less or have two years added to the length of the contract. This is not a deal breaker when dealing with this kind of money.
What would that mean for the fans? Fewer super teams will exist. Even the White Sox and the Rockies would have a star player or two to cheer for. More competitive teams could draw bigger crowds in those cities.
What would this mean to the Cardinals? One day, fans could see Soto, Harper, or Betts in Birds on the Bat emblazoned uniforms. Right now, that will never happen. By being smart about it, they could maintain a competitive team even if they had to reduce salaries, with just a 20% gap between the top and bottom spenders rather than the current 86% difference.
By slashing the budget, the team is creating a self-fulfilling prophecy that will result in fewer fans in the stands. I hope they kept all the cardboard cutouts from the Covid year. They will need them if they want to see a full stadium in 2025.