Bill DeWitt III has the wrong financial ceiling for the St. Louis Cardinals

According to some outlets, the Cardinals are nearing the luxury tax threshold. Should that hold them back from adding to the rotation?

Chicago Cubs v St. Louis Cardinals
Chicago Cubs v St. Louis Cardinals / Dilip Vishwanat/GettyImages
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Bill DeWitt III has spoken out on multiple occasions recently stating that the team would not add to its payroll for 2024. Barring minor moves throughout February, the St. Louis Cardinals have maintained their total payroll

Financial outlets across the internet disagree on the team's total 40-man payroll for 2024. Since the Cardinals typically keep salary numbers close to the chest, the general public is unable to garner specific figures. Another key detail about luxury tax calculations includes the average annual value of a contract, not the actual dollars to be dolled out.

For example, While Sonny Gray will only be paid $10 million this offseason, for tax purposes, the AAV of his contract is tabulated ($25 million). While only $10 million in cash will be given to Gray this year, the taxable total remains $25 million annually over the course of his contract. This is also why the Dodgers didn't fully cheat the system with the massive deferments of Shohei Ohtani's contract.

Cot's has the Cardinals' 40-man payroll set at $186.5 million. Spotrac places their 40-man payroll at $205.8 million. Fangraphs calculates the highest payroll of the 3 at $215 million. We can't be certain which number, if any, is accurate for the 2024 payroll; what we can be certain of is the DeWitt's wariness of the luxury tax threshold set by MLB of $237 million.

Even with Sonny Gray's temporary absence from the starting rotation, John Mozeliak believes they won't be making any sweeping changes in the rotation. This is a prudent approach; Gray will miss only 2-4 starts at the beginning of the season, so it isn't fiscally responsible to go out and spend oodles of money to patch up a temporary issue.

I won't argue against the need for another top-end starting pitcher. Sonny Gray's injury only magnifies the team's need for another talented starting pitcher, but if the tax threshold is the ceiling for the DeWitt's, then Jordan Montgomery and Blake Snell are too expensive for the Cardinals, assuming Fangraphs' projections are accurate.

A pitcher like Michael Lorenzen or Jake Odorizzi isn't going to move the needle much, and there won't be anywhere for them to go once Gray returns from his injury. If we can't afford a true top-end pitcher and if the cheaper options won't make a difference, then the judicious move would be to wait for Gray to return. Zack Thompson and Matthew Liberatore should be able to fill in during the interim; that's why they are on the roster in the first place.

My argument instead is that the luxury tax should have been the maximum amount of money the DeWitts would spend in the first place. Even if Fangraphs is right with its conservative payroll total, that still gives the team some decent wiggle room. Rather than committing $10-$12 million to both Kyle Gibson and Lance Lynn, the team could give $25-$30 million to any one of Blake Snell, Jordan Montgomery, Eduardo Rodriguez, or even Marcus Stroman, our rotation would be much more reliable.

The conjecture that the tax threshold is restrictive is tireless jargon. The tax thresholds reset once the team dips back below that total. Additionally, the Cardinals are taxed at only 20% of all overages for their first year. If the team goes only $5 million over, they get taxed a total of $1 million. That is a very manageable amount.

Therefore, signing Jordan Montgomery or Blake Snell for a contract with an AAV at or near $27 million places them only $5 million above the first luxury tax threshold. They'll only be taxed an additional $1 million next year with a contract of that size.

The Cardinals front office and ownership have backed themselves into a corner. Given an unwillingness to spend, spending in the wrong areas, and a lack of development of internal pitching options, the team has been forced to spend oodles of money on back-end starting pitchers. The DeWitt family may have to get uncomfortable with spending, and John Mozeliak will have to spend more wisely in the future to field a competitive team until the farm system churns out reliable starting pitchers.

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