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Brian Walton's news and commentary on the St. Louis Cardinals (TM) and their minor league system

More local TV revenue won’t cover Pujols’ contract

Members of the St. Louis Cardinals’ extended community anxious over the impending contract negotiations between the club and superstar first baseman Albert Pujols have come up with some interesting ideas.

For example, a group is planning a rally to show their support for the two sides to come to terms. Other suggestions are intended to “help” the club identify additional revenue sources, which they could then deploy in paying Pujols.

One proposal is for the Cardinals to create their own regional television network in the image of the Yankees’ wildly successful YES Network. Unfortunately, any such change would not occur quickly enough to impact the current situation.

First of all, there are major market differences between St. Louis and New York. In fact, St. Louis ranks 24th of the 30 metro markets using Nielsen DMA data, according to team president Bill DeWitt III. While he acknowledged that does not take into account “outer markets” where the Cardinals are regionally strong, it wouldn’t close the gap with The Big Apple.

Yet there is clearly considerable money to be made in team broadcast rights.

Last fall, the Texas Rangers inked a landmark 20-year contract extension with FOX Sports Southwest that takes effect in 2015. The total value of the deal is said to be a whopping $1.6 billion.

That $80 million average per season is a huge increase over the $45 million the club reportedly receives under the current contact. An additional $35 million each and every year could buy a lot of anything, including the services of several baseball players in their prime.

With the Texas situation firmly in mind, during the recent Winter Warm-Up I asked DeWitt III if conditions could be right for a similar windfall for his club.

DeWitt characterized the Texas situation as “the perfect storm” with a change in team leadership due to the previous owner who “had overly-leveraged the franchise and got into trouble that probably started with the A-Rod contract. I won’t draw any parallels,” he quipped. DeWitt also observed the Rangers cable TV footprint ranges from Arlington to Dallas to Houston.

One major reason these conditions won’t be developing soon in St. Louis is that the Cardinals have seven years remaining in their current contract with FOX Sports Midwest. The deal had been extended prior to the 2007 season.

A provision in the revised agreement that was picked up stipulates that starting in 2011, all Cardinals games not telecast nationally, about 150, will be found exclusively on the regional sports network. Available via cable and satellite, FOX Sports Midwest was rated number one among all such networks across MLB during the 2010 season. Free, on-air Sunday games, most recently shown on KSDK and a regional network, have likely disappeared forever, DeWitt acknowledged.

The team president further pointed out that there are risks in long-term deals like the one made in Texas that might limit the Cardinals’ flexibility down the road.

“To get into an extension (with FOX Sports Midwest) might be a bit premature but we are looking at everything that is happening in the industry,” DeWitt said. “Some clubs have extended very long into the future – 20-year deals. The Oakland A’s have done that (with Comcast SportsNet) and a few others.”

The Cardinals don’t seem to see a clear benefit in the trend.

“We are kind of scratching our heads thinking about that because… is that good for the club? Or is it risky if it is one of those things where sure, you might be able to lock in some big increases and maybe even bump up revenues and payrolls and so forth, but are you limiting your flexibility and options for the future – perhaps do your own cable network of things of that nature?” DeWitt asked.

With at least seven years of the status quo ahead, don’t expect incremental cash to begin flowing in to fund Pujols’ impending contract – unless a tremendous portion of his money is deferred.

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