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Although MLB pulled in record revenues for 2019, owning a baseball team apparently isn’t a good financial endeavor—that’s at least the contention of St. Louis Cardinals chairman and CEO Bill DeWitt Jr.
During an interview on 590 The Fan in St. Louis, DeWitt said “the industry isn’t very profitable, to be quite honest.”
The comments come within the context of the ongoing negotiating battle between team owners and the MLB Players Association regarding the finer details behind the 2020 season. The sides remain at an impasse over how players would be compensated should the league return amid the COVID-19 pandemic.
Evan Drellich @EvanDrellich
The MLBPA regards today’s offer from MLB to be worse than the league’s last because it shifts greater emphasis on risk sharing in the postseason. Players would receive 50 percent of pro rata if there is no postseason, 75 if there is. @karlravechespn first on a new offer coming.
The Associated Press’ Ronald Blum reported in May that MLB projects each game would net an average $640,000 loss over an 82-game season because the pandemic would force stadiums to be empty.
Fans are effectively left to take owners at their word because teams don’t open their books to the public for a comprehensive view of their financial situation.
For example, MLB’s average salary declined for the second straight year in 2019. DeWitt argued that trend doesn’t indicate a lack of continued investment from teams but rather that franchises are allocating their resources elsewhere (via Jeff Todd of MLB Trade Rumors):
“DeWitt rejected the idea that declining salaries were tied to more profits: ‘don’t think for a minute that the reduced payroll added money in the pockets of the owners because it didn’t.’ Citing the growth of non-player personnel — from 240 to 400 in the past six years, he says — DeWitt claims ‘It’s a bit of a zero-sum game’ because ‘a lot more is put into training, conditioning, promotional work, front office, analytics.'”
DeWitt’s statements aren’t verifiable, but Hardball Talk’s Craig Calcaterra provided evidence to raise doubts:
“That’s fairly rich when one realizes just how much revenue has gone up. Specifics are hard to come by, but it’s generally thought that average team revenue has increased around $15 million each year over the past several years. And that’s before you add one-time gigantic payments like the several billion baseball owners realized from the sale of BAMTech to Disney, when each owner got around $50 million over and above annualized increases. Even if the Cardinals added 150 trainers and analytics employees EACH YEAR and even if each of those new employees were making hundreds of thousands of dollars a piece — which they are certainly not — there’d be far more left over for profit, which the clubs are most certainly seeing.”
In 2010, Deadspin’s Tommy Craggs uploaded financial statements from a small handful of teams. In one case, the Pittsburgh Pirates were netting a healthy profit while throwing out a team that finished last in the National League Central. Likewise, the Miami Marlins had MLB’s lowest payroll while turning a profit.
DeWitt was clearly attempting to explain the owners’ position in their negotiations with the players’ union, but he may have done more harm than good in that regard.
Forbes estimated in April that all but one MLB franchise (the Marlins) was worth at least $1 billion. While that doesn’t represent tangible money available to all 30 owners, it spoke to the generally robust health of the league’s finances.