ST. LOUIS — Sometimes, the dialogue just paints the whole story.
In a radio interview with 5 on Your Side's Frank Cusumano on 590 The Fan KFNS this week, Bill DeWitt Jr. said that baseball, as an industry, is not a profitable business. Those are the St. Louis Cardinals primary owner's words as he discussed the ongoing discussions between the owners and the players for a 2020 season agreement.
DeWitt Jr. has always been a practitioner when it comes to managing payrolls and expectations, but this was a classic dropping of the ball on live radio. If you tried to say out loud that the Cardinals' owner said baseball isn't a profitable business, there's a good chance someone is going to punch you. It makes little sense and ignites the anger in not only Cardinals fans but baseball addicts around the world.
Rob Mains of Baseball Prospectus mapped it out quite well in his latest piece, which broke down DeWitt's words while attaching some raw yet honest numbers to the conversation.
Imagine buying an amusement park at a modest investment and turning it into a decades-long success. DeWitt Jr. has taken the Cardinals from a $150 million purchase holding little competitive weight at the moment and could sell them today for a little over $2 billion. "Could" is a big statement there, but the numbers game is backed up with considerable investigation by St. Louis Business Journal. The CAGR (compound annual growth rate) would be 11.8%, which is unheard of.
According to Forbes, the Cardinals made around $72 million last year. That's a lot smaller after the necessary payments are made and the money to spread around to staff and promotions, but it's quite profitable. As Mains breaks down in the Prospectus article, imagine telling someone they would make nearly 12% on a 24 year investment.
I can hear Martin Landau's Bob from "Entourage" say: "Does that sound like something you'd be interested in?" Mains was a financial advisor before he wrote online. He's a pro. What the Cardinals are doing is very impressive.
So the last thing fans, or literally anyone, wants to hear is that it's not pretty out there for the businessman. Because it doesn't make any sense at all.
The Cardinals have stuck their feet in, built something successful and sustainable, and made it last. They should be the last group talking about the rough terrain of baseball business. They are obviously good at it (look at that GIANT trophy out there on your lunch), but that doesn't make it highly difficult. The Cardinals make up more than half of DeWitt Jr.'s overall value.
A lot of baseball teams and their owners are profitable. The sport was a huge success last year, grossing a Forbes record $10.7 billion in revenue. So when they are out there selling crazy talk that doesn't hold up with a second grade issued calculator, something needs to be said.
This isn't a good look for DeWitt Jr., someone who has insightful credibility and a longstanding relationship in baseball, and also just purchased an eight million dollar home. He's doing very well in the baseball business, as anyone with a view of downtown can attest. As Mains points out, DeWitt Jr.'s net investment of $75 million only makes for 4.2% of his current worth. Without the Cardinals, he's not as strong.
If this spells how most of ownership feels, the future of baseball is in trouble. I do believe they will lose fans this year if it is revealed that they lost games over greed. Nobody wants to hear that news. Owners shouldn't be trying to sell the notion that baseball isn't profitable right now. What was the planned speech like for next year's season? Bloated rebellion? I'm curious.
At this stage, lose the nonsense. Just level with fans. The same way you would with a family member or close friend. Tell them the truth. If 2020 is looking dim, just say it and come out with it. Don't hide books and the truth as well. It's getting too late in the spring for misdirection. Everybody else is advancing ahead in getting their sport back to the people. Baseball is dragging its feet.
The sport made $10.7 million last year. One of the owners is worth over four billion dollars. Things are good.
Spare us the nonsense and get the deal done. Maybe stay away from radios.
More Cardinals Coverage
RELATED: Draft will be different, but importance of Cardinals selections is one thing that hasn’t changed