Cardinals Q & A with Chairman Bill DeWitt Jr.

Feb. 16--JUPITER, Fla. --As Cardinals pitchers and catchers took the field for their first official workouts of spring training, so too did their chairman.

Bill DeWitt Jr., the club's chief executive officer since he joined an ownership group that purchased the team in 1996, had some young lefties to see, first-round pick Marco Gonzales and rising prospect Tim Cooney. He wanted to have faces and arm angles to go with the reports he gets during their season on their every inning. DeWitt thinks of the team three years and five years from now, and those two pitchers fit in that forecast.

The recent past has been particularly rewarding for DeWitt -- four trips to the World Series, three consecutive postseason appearances, Ballpark Village's progress, more wins than any other National League team this century, and manager Tony La Russa's Hall of Fame induction -- but the future is always getting closer. In a wide-ranging interview Saturday at his Roger Dean Stadium office with the Post-Dispatch, DeWitt discussed the present team but also the future -- of the club's payroll, its broadcast revenue, its expansion into new talent pools, and its home for spring training.

Even as he watches what is happening now, DeWitt asks what's next.

P-D: Your team arrives here for spring training almost universally considered a contender to return to the World Series or win the pennant again, and I imagine you do this with a team that five years ago you'd hope to have. (Albert Pujols) isn't here, but the youth is. Is this one of the better positioned teams you've had entering spring?

DeWitt: It's a team that has fewer question marks than a lot of the teams we've had. Having said that, there is competition at various positions, which is always good. We have a lot of pitching depth. We have new players, which is always fun to see. More youth. More speed and defense. I think that was part of the theme. But in general the core and the young players who have come through the organization is something that we've strived to have for a long time. We're fortunate to have that group with us now.

P-D: The team this year, because of the youth and some expiring contracts and retirements, has a smaller payroll than last year. That comes at the same time as increased revenue throughout baseball from the national television broadcast rights. I know the plan wasn't to scale-back payroll like this, but can you reconcile these two things and do you see payroll closing that gap?

DeWitt: Well, we certainly have flexibility. One thing to think about when you compare last year's payroll to this year is that we had a number of injured players that were insured. We're a club that insures players on multi-year contracts of significance. A lot of teams don't do that. It's an expensive proposition, but we feel it's important because a starting pitcher like Chris Carpenter when he wasn't able to pitch it allowed us to go out and pick up other players. It's a way of evening out the payroll and gives us flexibility.

The team that we played with, if you look at the payroll, that team compared to the gross payroll ...

P-D: At one point, almost a third of the payroll was on the disabled list.

DeWitt: Of the dollars, yes. In that sense, the team on the field that we'll start this season with will have a payroll in excess of the team that ended the season year.

P-D: The premiums you pay for that insurance doesn't show up in payroll figures.

DeWitt: We have an ever-growing insurance expense on an annual basis. I think last year it was $4 million or $5 million -- in that general range. That's not factored into (public) payroll numbers. Now, if someone is injured and we get recovery from that, well, that offsets the cost of the insurance and offsets the cost of the player. But it's getting more expensive to insure players. And you don't get full coverage. Generally, what we have is a 90- or 180-day deductible. That's either missing half a season or a whole season. If someone is out six weeks, there's no recovery. When you have long-term, high-cost contracts we think it makes sense to cover ourselves. If you lose a key player making millions of dollars and you don't have the resources to replace him, that puts you in a tough spot.

P-D: But do you expect actual payroll to grow? I mean, in the sense these young pitchers are going to hit a market that seems to get richer by the day. Can you take what's saved from 2014 and apply to 2016? 2017?

DeWitt: Yes. We always have a three- to five-year forecast of what our budget might look like. It's very fluid because particularly with a group of young players it's going to depend on performance. But we have a sense of what the payroll in the out years -- three years, five years out -- will look like, and it will certainly be higher than it is today.

P-D: We see the high revenues now from broadcast rights fees and how that's market-driven. Is this a front-burner question for you: How in a marketplace where the Dodgers exist and the Yankees have their own network can you maximize your market?

DeWitt: That's an area we look at for sure. And it's one that we think has upside for us given the current rights fees that we get (from Fox Sports Midwest). There has been a general escalation of all markets, not just the big markets but all markets in rights fees because the content to the RSNs (regional sports networks) or the cable distributors has so much value. Baseball has tremendous ratings. And the Cardinals have always been right at the top of baseball in terms of ratings. ...

St. Louis is not a particularly highly penetrated cable market. Compared to a lot of cities that draw nowhere close to what we draw (in attendance) there are not as many households.

(But) it's an area that we definitely think we can do better with.

P-D: Do you see that happening in the short-term?

DeWitt: We have four years left, counting 2014, (on the rights deal). The first time we would have an opportunity to do anything different would be 2018.

P-D: Is the benefit of owning the highest affiliates in your minor-leagues mostly in development and having control over the culture and facilities at an affiliate, or is there a branding element that comes from planting a flag and saying this our territory? Do you see a branding bounce?

DeWitt: It does. It really is all of that. We want first-rate facilities for our players and that's our No. 1 goal. Then we want it to be in a Cardinal market, which (Class AAA) Memphis is and (Class AA) Springfield is. We do extend our brand there. From a financial standpoint, these are not pure investments in that sense. They are more strategic investments. They don't financially contribute significant amounts to the operations, but they do stand on their own and pay for themselves, which is what we really care about. It's a strategic acquisition that extends our brand, provides great facilities for our players, and keeps us within Cardinal country.

P-D: What do you see as the future of this east coast Florida region for spring training and what that could mean for the Cardinals' place here?

DeWitt: I think it's critical that we get at least another team and hopefully two new teams in the area. I was disappointed that Palm Beach Gardens, Fla., did not approve the new ballpark there. I thought it was a win-win when you bring two teams like Houston and Toronto into an area. They're both big markets. The tourism dollars coming into the area would be tremendous. I was surprised it hasn't worked there. I don't know if it's totally dead. I'm hoping it still gets accomplished. If it doesn't it jeopardizes the long-term viability of the east coast.

P-D: If one of the (four teams) leave this corridor, you have an out in your lease, so would you have to consider your options? Would you have to look toward Arizona?

DeWitt: I think Florida is more suitable for our fan base. But if this doesn't continue to be as viable as it has been then you have to look at all of your options.

P-D: What did you need to hear from (general manager John "Mo" Mozeliak) or from Jhonny Peralta? ... His is the largest contract you've given a free agent from outside the organization. To make this investment, what did you need to hear?

DeWitt: First of all, we checked around. He hadn't played here so we didn't know him personally, but it's not to say that some of the group here didn't know about him. We all did a fair amount of due diligence on what kind of person he was and what may have driven him to make the mistake that he did. ... He was very well thought of by the Tigers. In general, throughout baseball he is highly regarded. He made a mistake. He paid the price. He happened to be available at a time and at a position that suited our needs.

P-D: During October the theme developed ... the culture of this franchise, the "Cardinal Way," was not just the players you wanted on the field but the type of person the club tries to attract. Did you have any concerns that this being the first player signed after suspension (for the Biogenesis investigation) and that theme didn't line up?

DeWitt: What we found out and learned was that he's a highly regarded person, not just a player. He's got all of the attributes of a Cardinal. But he made a significant mistake. I think for everyone who has made the mistake if you don't consider them then you do a disservice to the franchise. You have to look at all of the available talent.

I thought some of the (active) players who were critical of his contract was interesting because it's a competition out there. It was almost as if the teams should not pay certain players money. How does that happen? ... We had a sense that the market was very strong. A lot of teams were interested. I can't tell you what other teams offered. If it didn't reach the level we offered, it certainly approached it.

P-D: And the contract is front-loaded so it pays him his highest salary when he's at the premium position.

DeWitt: That's a good point. Since we had the flexibility in the payroll this year and next, we did front load the contract and that gives us more (payroll room) down the road.

P-D: The biggest change to the market this winter was the new posting rules for Asian players, and now that's capped as opposed to the unrestrained auction. Does that play into your approach and is that why the organization is now positioning itself to be more active in these emerging markets? It's no longer a straight bidding war.

DeWitt: We were going to look at that market anyway. This has been a long process for us. We prioritized the amateur draft first and foremost and international -- meaning Latin American -- as where the most of the top players come from. We haven't developed enough expertise with the Japanese players and the Asian players to go out on a limb for a major signing. But that's an area we're focused on, we're concentrating on because as time goes on I think more and more players will be coming over. ... Down the road, (Cuba) is going to open up more so than it is today.

P-D: There are few clubs that can claim the history the Cardinals have. You have Ballpark Village opening and the Hall of Fame there, so how much of connecting with that history has been a guiding purpose for you?

DeWitt: Well, we want to continue to build it. At this point and ever since buying the team it's been our goal to build on the legacy and improve it and enhance it.

P-D: How do you view then owning the Cardinals long-term? You have the World Series trophies, Ballpark Village, a new ballpark -- is it your goal to have this business become something you'd like to remain with your family for a long time?

DeWitt: Our family is interested in a long, continuous association with the Cardinals. We've done a lot in terms of facilities and minor-league franchises and the team and now the Hall of Fame and Ballpark Village. But in this game, you can't stand still. You have to always look to the next frontier. What can we do now? What is the next challenge?

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