St. Louis Cardinals Owner Claims Baseball Isn't a Very Profitable Industry

Busch Stadium
Busch Stadium / Jeff Curry/Getty Images

Public opinion of baseball has been in a steady decline over the last two months as MLB and the MLBPA have engaged in a bitter battle over the details of a shortened and fanless 2020 season due to COVID-19. The owners are very worried they aren't going to make much money if a season is held without any stadium revenue, while the players are displeased those owners are going back on their March agreement for fully prorated salaries and the two sides are duking it out both privately and in the court of public opinion.

It is rather difficult to side with the owners in this fight, especially in light of news like what Jeff Passan reported a few weeks back that some would rather cancel the season outright than incur even the slightest cost that would come with paying everyone to put games on without getting every last dollar out of the operations. It is made even more difficult when people like Bill DeWitt Jr., owner and chairman of the St. Louis Cardinals, goes on radio to tell people that the multi-billion dollar industry of baseball is not particularly profitable.

Appearing on 590 The Fan with Frank Cusumano, DeWitt said the following when asked why, in light of payroll cuts across baseball over the last few years, players should help subsidize profits if they won't reap the rewards of a high revenue stream (segment 1 starting at 7:14):

"Well, take a look at the deal the players have. Don't think for a minute the reduced payroll added money in the pockets of the owners, because it didn't. If you look at the growth and personnel of the franchises, we've grown, and this is non-players, we've grown over the last six years from 240 employees to 400. A lot more is put into training, conditioning, promotional work, front office, analytics. It's a bit of a zero-sum game. The players have gotten approximately what they did percentage-wise, based on revenue maybe it's a little bit less, but they have by far the best deal of any players in any sport. That's why you see the other sports coming back pretty quickly, because they're aligned with the players. The more the revenue, the more the players get based on a formula. We don't have that in baseball. The players have always fought for whatever they can get in individual negotiations and it's been to their benefit. The industry isn't very profitable, to be quite honest. I think they understand that. But they think the owners are hiding profits, this and that. I think there's been a little bit of distrust there. "

Bill DeWitt Jr.

Whew. Welcome to the spin zone.

Let's give DeWitt the benefit of the doubt here and believe that he's not saying baseball isn't very profitable, hard stop, which would be blatantly incorrect. Let's assume he's saying baseball isn't very profitable relatively speaking, meaning it isn't as profitable as other sports or in proportion to the amount of money generated. According to Forbes, MLB made a record-$10.7 billion in revenue in 2019. Ahead of the season, DeWitt's Cardinals were worth $2.1 billion on their own in Forbes' yearly team valuations list. They also had a payroll of only $166 million in 2019.

Other proprietary financial information is hard to come by, but MLB revenue has steadily increased for 17 consecutive years, along with the value of their franchises. The Cardinals are in the middle of a 15-year TV contract with Fox Sports Midwest that will pay them an estimated $1 billion over the life of the deal and grant them a 30 percent equity stake in the network.

I can't give you the exact breakdown of how much money St. Louis made last year via revenue sharing in combination with the TV deal and how that parses out with the payroll of the players and the other employees behind the scenes. Sure, DeWitt might not be making tens of millions after it's all said and done, but with what we do know, a fair conclusion that there still a profit to be made can be arrived at.

Given that DeWitt himself is in the middle of a labor dispute, you'll excuse me for believing his claim that baseball isn't particularly profitable comes across as extremely dubious.