Offseason Outlook: Payroll

It seems like every time there’s a question about the St. Louis Cardinals making a big signing or a big trade that inevitably it gets asked whether the club can afford to make it. Call it having a small market mindset. While the Cardinals are a small market, they get incredible fan support. And because of that fan support, the club is generally able to spend like a top level team according to Team President Bill DeWitt III.

So here we are talking about the potential acquisition of Giancarlo Stanton and his potential 10 year, $295 million commitment coming to town and someone always chimes in asking, “Can the Cardinals afford it?” If you want the tl/dr (too long/didn’t read) summary, yes. In fact, a whole-hearted, yes.

Assuming that the Cardinals were to make no changes to their roster and fill all their needs from within, the Cardinals can expect to have an Opening Day 25 roster plus other money of just a tick over $125 million. And that’s without a single change from the roster today.

How does this compare to previous seasons? Last year at the beginning of Spring Training, using the same methodology, the Cardinals had a projected Opening Day payroll of $143 million. Which was the same as it was before the 2016 season as well. So the Cardinals could add $18 million in payroll for next season without spending more than they did the past two seasons.

With three major needs to fill the question then becomes just how far are the Cardinals willing to push their payroll?

One of the places I look is that 2015-16 MLB offseason. The Cardinals were prepared to sign both David Price and Jason Heyward. Those deals combined would have cost roughly $50 million in average annual value. Figure that they would not have signed Mike Leake in that scenario ($16 million AAV), and you have a club that seemed prepared to handle a payroll around $175 million.

Beyond that, the club recently signed a new television rights deal with FOX Sports Midwest that is expected to pay them $50 million this season and up to $86 million a season over the next 20 years. From 2017 to 2018, the payout is expected be a roughly $20 million increase.

Now, you can make the case that perhaps the club was comfortable going beyond their limits for a year or two until that new television deal kicked in and they’d recoup that investment on the back end. But I think it’s fair to say that a payroll of about $185 million is not out of the realm of possibility.

That would suggest that the Cardinals could add $60 million of commitments to the payroll. That leaves plenty of space for Giancarlo Stanton’s $29.5 million AAV contract, bullpen help, and a starting pitcher.

Edit: I was asked on Twitter by @C70 about how the luxury tax might play a factor in how much the club is willing to spend. For 2018, the luxury tax threshold will be $197 million.

Now, I assume there will be differing methodologies between how I compute payroll and how MLB does for luxury tax considerations, but it is far enough away from where I believe the Cardinals can maintain their payroll that I don’t think it will play a factor.

However, they certainly will have no interest in going above the luxury tax threshold at all. Or putting themselves in a situation where they may want to exceed it going forward.

The Cardinals do have Adam Wainwright‘s $19.5 million coming off the books at the end of the year and then Yadier Molina‘s $20 million off the books after 2020 as Stanton’s contract begins to increase. So there is some flexibility with big contracts coming off the books to absorb payroll growth due to Stanton’s deal and arbitration.