During St. Louis Cardinals Winter Warm-Up, I attended a one-hour presentation from team president Bill DeWitt III during which he covered several general topics before taking questions from the audience. Among those subjects was the team’s finances.
Here are some of his key points.
St. Louis is 24th of 30 MLB markets, using Nielsen DMA as the measure. This does not include “outer markets.”
The Cardinals are 20th in MLB in revenue due to the size of the market and the resulting cable television deal, which runs for seven more years.
In local revenue (tickets, food, beverage), the Cardinals rank in the top five in MLB. No team has a bigger gap so greater local dependence on local revenue.
The club receives 1/30th of all MLB revenue. For example, MLB Properties for central licensing and MLB Advanced Media. This allows clubs more consistent revenue through team up and down years.
(According to a recent report from BizofBaseball.com, MLBAM alone generates a half-billion dollars in revenue annually.)
Considering all sources, St. Louis is 10th in revenue across MLB, which is the same spot as player payroll spending. They consider themselves a “top 1/3 club” along with the big market teams, but have greater dependency on ticket sales.
They are looking at changing season ticket reporting to a more consistent method across MLB. For example, eight ten-packs could equal one season ticket.
The Cardinals are implementing customer relationship management (CRM) to better understand preferences and past history.
New Busch Stadium cost $411 million, including some first season expenses.
A $100 million assistance proposal from the state did not pass. Meant they needed city help or they could not have financed the stadium.
There is a five percent city admission (or amusement) tax on entertainment tickets (including Rams, Blues, etc. – unique in MLB.) above the sales tax that was abated by the city for 29 years.
Prior to the new stadium, the five-year average (through 2002) the Cardinals paid the city was $7.7 million in admission, revenue taxes etc. It is now up to an average of $10.3 million in the last five years because of increased revenue and a higher payroll tax. City did the right thing.
State was active, too. MODOT moved up the schedule to relocate a highway exit to make room for the park and the state gave them tax credits for environmental cleanup from old gas stations. Same credits were available to any MO business. $50 million in state investment. Revenues from Cardinals to state up from $9 million average before new stadium to $18 million average since it opened.
Other than San Francisco, financed like St. Louis, the cost of most stadiums were at least 90 percent public assisted. St. Louis was about 10 percent.
The Cardinals borrowed about $300 million to build the stadium. They are able to service the debt annually, but carry a larger burden than other clubs.