DeWitts discuss Cardinals’ RSN situation, finances and how both come together

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ST. LOUIS – Bill DeWitt Jr. and Bill DeWitt III of the St. Louis Cardinals ownership group spent nearly half an hour Monday addressing the team’s finances, uncertainty with their TV regional sports network situation, and how both factor into where the Cardinals stand today.

It’s quite a bit to unpack, but at large, it comes down to this: There’s a growing sense the Cardinals might be cautious in how they invest future dollars into the team for the rest of the year and beyond due to money that could be lost in a TV rights deal that could expire at the end of the 2024 season.

Diamond Sports, the parent company of Cardinals’ TV regional sports network Bally Sports Midwest filed for bankruptcy last year. They are only obligated to air Cardinals games for one more season, this upcoming one, if things settle as expected in court proceedings.

The Cardinals are nearly halfway through a TV-partner contract with Bally Sports Midwest that, currently standing, pays the team $1 billion through 2032. The contract took effect when the RSN was known as FOX Sports Midwest under different ownership.

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The DeWitts expect Diamond Sports to fulfill its financial obligations this season and pay the team in full. Beyond that, any source of revenue from the TV deal seems murky.

“From a team and an industry standpoint, it’s quite a scramble,” said Cardinals president Bill DeWitt III. “It’s quite a project to figure out how to get all these teams that are [presumably] getting their rights handed back to them back into a place where they were.”

In a time when National League competitors, like the Los Angeles Dodgers and Atlanta Braves, are spending big, there’s a notable gap between the Cardinals and teams paying top-dollar. Their projected payroll of $177 million is a relatively modest increase from last season, but the Cardinals sit 11th among MLB spenders.

According to baseball analytics site FanGraphs, the top five MLB payrolls are at least $50 million more than the Cardinals’ payroll, and the top three are at least nine figures more.

“The way the game is set up now, the big markets have an advantage in terms of revenue they generate,” said Cardinals chairman Bill DeWitt Jr. “We’re at a certain level of the market and try to do everything we can to compete with that. It’s kind of the nature of the game.”

Asked moments later how the Cardinals could close the gap in spending, DeWitt Jr. says it comes down to player development and careful investments.

“You compete the best way you can,” said DeWitt Jr. “We’ve always felt that draft and develop is the Cardinal model, and it’s played out pretty well for us over the years. We’ll continue to do that, but pick our spots on free agents. We feel like we can compete with anybody.”

DeWitt Jr. says the RSN situation hasn’t really had a major impact on plans this offseason, but there are discussions frequently on how the Cardinals might move forward if (or more likely when) their current TV deal falters.

“If it’s in our lap, we better know our market,” said DeWitt III. “We better know who’s out there, we better know what ratings have looked like in outer market territories and inner market territories.”

DeWitt III noted that several possibilities are on the table in the case TV rights are returned back to the Cardinals. Among them:

A partnership with the St. Louis Blues (also under Bally’s umbrella) for a St. Louis sports-centric streaming opportunity.

An MLB-controlled broadcast stream, which the San Diego Padres and Arizona Diamondbacks (two former teams with Bally ties) settled for last season.

A third-party stream, potentially in the form of Amazon Prime

A package consisting of TV broadcast access and Cardinals tickets

“From a fan standpoint, it’s going to get better pretty soon,” said DeWitt III when discussing potential plans.

DeWitt III is hopeful that a direct-to-consumer product will emerge, citing local blackouts, cord-cutting, and dropped TV providers as trends that have led to the team’s current RSN situation.

He’s also hopeful the league has a plan to even the playing field for the Cardinals and 10 others currently under Diamond’s TV rights control.

“Is MLB’s goal to move toward a more level playing field through the media route? I’d say yes, that is an industry goal,” said DeWitt III. “Is it doable and practical? That remains to be seen. But I think the disruption gives the industry a direction to try and move in that direction.”

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The TV deal is one factor of the team’s revenue share. Profit from tickets, concessions and sponsorships are also factored into the Cardinals’ budgeting strategies.

DeWitt III says the Cardinals traditionally sell around 78 percent of their total tickets sold before Opening Day. He says the rest of the revenue from tickets sold is usually based on team performance.

“I’m pleasantly surprised about where ticket sales are to this point, but we’ve got a lot of work to do, obviously,” said DeWitt III.

More notes and quotes

1) The St. Louis Cardinals recently hired former Boston Red Sox executive Chaim Bloom as an adviser to President of Baseball Operations John Mozeliak. The DeWitts say he brings valuable perspective to the front office.

“Our team’s been together a very long time,” said DeWitt II. “You never know what else is out there that maybe our guys have not been in touch with. The world changes, and it’s helpful to get the perspective of somebody who’s been with different organizations.”

2) The DeWitts says Mozeliak addressed some big priorities in adding three experienced starting pitchers (Sonny Gray, Lance Lynn, Kyle Gibson). He’s hopeful the Cardinals will rebound from last year’s rare losing season, their first since 2007.

“We’re highly motivated to,” said DeWitt Jr. when asked about effort to get the Cardinals back on track. “I think Mo and his team did a good job filling some holes that we had and getting us in a position where we can be competitive in the division and in the league. I’m happy with what has been accomplished in the offseason here.”

3) Mozeliak reportedly indicated in his comments earlier this week the potential of stepping down from his lead executive role by 2025. The DeWitts are closely keeping track of the situation.

“Mo has said that’s a potential timeline for him,” said DeWitt II. “The sequence of Chaim Bloom coming on wasn’t necessarily part of that. It was another asset in our baseball operations group. It’s a fresh look. And if it turns out Mo is moving on or wants to go in a different direction in a couple years, we’ll have a more beefed-up staff than we did otherwise.”

4) Manager Oli Marmol is entering a contract year on his first deal as a MLB manager. There haven’t been any new discussions yet on an extension, but the DeWitts feel confident in his potential.

“We’re very positive on Oli as our manager,” said DeWitt II. “We’ll see how this year goes. I have full expectation that after this year he’ll continue as our manager.”

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