Bill DeWitt Is Not Your Friend

One year ago next week, St. Louis sports fans had their hearts ripped out of them by a grotesque Thomas Nast cartoon of a team owner. Stan Kroenke, a wigged weirdo who’d lucked into his fortune as a tapeworm in the intestines of the Walton family, persuaded a roomful of equally talentless and vicious old men—silver-spooned dilettantes, gout-ridden oligarchs, adjudged fraudsters, Dan Snyder—to let him do it. They did it out of greed, they did it because they could, and they did it with a sociopathic disregard for the people they’d lied to, extorted, and spat on in the process.

Not long afterwards, the Blues played the Hurricanes, and before the game Bill DeWitt III, president of the Cardinals and son of majority owner Bill DeWitt Jr., joined Blues chairman Tom Stillman for a ceremonial puck drop. Fans cheered, but mostly they chanted: “Kroenke sucks, Kroenke sucks, Kroenke sucks.” It was a cool moment.

It was also the beginning of a deeply bizarre consequence of the civic trauma that Kroenke and his fellow NFL owners had put St. Louis through: a renewed, unconditional reverence for the men who owned the city’s two remaining franchises. Stillman and the DeWitts were suddenly “the Anti-Kroenkes.” Local media hailed their “show of solidarity,” their “St. Louis pride,” their “support for St. Louis and its fans.” On Twitter, the praise went on and on: “classy owners,” “class acts,” “pure class,” “world class,” “the definition of CLASS,” “more class in their toenail clippings than Stan Kroenke & Jerry Jones ever dreamed of having.”

Rather than come away from the Rams ordeal with a vivid understanding of the ugly truth about the relationship between fans and owners, many in St. Louis seemingly just wanted to feel good again—to believe that the experience revealed nothing at all, to be comforted by the idea that Kroenke was just an anomalous supervillain and that nothing bad would ever happen again. The Cardinals’ and Blues’ PR departments, along with plenty of local journalists, were happy to oblige. This went on all year, most notably throughout the announcement, promotion, and staging of last week’s Winter Classic; it will certainly last through Sunday’s closing-ceremonies event at Busch Stadium, and probably for a long time to come.

Even if this instinct is understandable, it’s also wrongheaded and dangerous. The unlikelihood that Bill DeWitt will ever do something as deceitful and as damaging as Stan Kroenke did doesn’t mean we shouldn’t hold him, and all other team owners, to a higher standard than simply not being Stan Kroenke. Whether it’s the Cardinals, the Blues, a future MLS team, or anything else, it’s our responsibility to assess individual owners on their own merits—to look at facts, data, and the historical record, and judge them on the evidence.

* * *

Major League Baseball was in rough shape in 1995. A quarter century of labor strife, set against the backdrop of widespread doomsaying prompted by the rise of the NFL, had culminated in the costliest work stoppage in the history of professional sports. Television networks, bitter over lost revenue, deserted the league. When play finally resumed, fans took their anger out on owners and players alike. Ratings and attendance plummeted.

The situation in St. Louis, one of the game’s traditional strongholds, was especially dire. The Cardinals hadn’t made the playoffs in eight years and, as a small-market team highly dependent on gate revenue, had been hit particularly hard by the post-strike attendance drop. In October, Anheuser-Busch shocked the city with the announcement that it planned to sell the team after more than forty years of ownership. The brewery, which claimed the Cardinals were losing tens of millions of dollars annually, pledged that it would sell only to buyers who were committed to keeping the team in St. Louis, but many fans weren’t convinced.

Within a few months, however, their fears were assuaged. A new ownership group with local roots swept in to purchase not only the team but also Busch Stadium II and its surrounding parking garages for a total of $150 million—a price tag that fell significantly below expectations, which had already been low given the league’s financial woes.

Perhaps quite purposefully, the ownership group was initially presented as a triumvirate of sorts, with Drew Baur, Bill DeWitt Jr., and Fred Hanser comprising the principals. Baur, a local bank executive, and Hanser, a partner at Armstrong Teasdale, were established members of St. Louis’ elite; DeWitt had been raised there but made his home (as he does to this day) in Cincinnati. His father had been an executive and owner of both the St. Louis Browns and Cincinnati Reds, and DeWitt fils had himself owned minority stakes in the Reds, Texas Rangers, and Baltimore Orioles, which he’d narrowly missed out on buying a few years before Anheuser-Busch put the Cardinals up for sale.

Even at a cut-rate price, many investors cast a skeptical eye towards the deal, citing baseball’s “downhill slide” and declining real estate values in downtown St. Louis. The new owners seemed to lean into this idea, declaring themselves “fans…interested in owning one of the great franchises in history,” rather than businessmen simply out to make money. “Each member of this group,” Hanser told the Post-Dispatch in January 1996, “could find a better economic investment than the St. Louis Cardinals.”

* * *

Whether or not Hanser was sincere, it wasn’t long before that sentiment began to look absurd. Less than a year after agreeing to terms with Anheuser-Busch, the team’s new owners struck a deal to sell the stadium’s four parking garages for just shy of $100 million, thereby recouping two-thirds of the group’s original investment.

Naturally, the new regime also went about looking for costs to cut. Heading into the 1997 season, that turned out to include a plan to force Busch Stadium’s cleaning staff to accept a huge reduction in their hourly pay; when the employees refused the new contract, they were fired. The Post-Dispatch’s Bill McClellan captured some of their stories:

“We’re out there in the rain, and at night, and even at our old wages, we were barely keeping our heads above water,” said Duane Garry. He is 33 years old and the father of 10-month-old twins.

“If I lose this job, I might have to go on welfare,” said Caroline Haywood. She’s 35 and the mother of two. “It isn’t like we had it easy. Sometimes the team is gone on a trip for two weeks, and we’ve got to stretch out money out.”

Florence Pulley seemed shellshocked. She’s been on the Cardinals’ cleaning crew since 1955. Her mother and sister, both now deceased, were on the cleaning crew before her. …

“This isn’t fair,” she said of the decision to terminate the cleaners.

After a public backlash and union intervention, negotiators eventually settled on a contract that included a less severe pay cut but slashed the employees’ benefits entirely.

That same spring, the club’s new owners signaled an abrupt about-face on their previously announced intentions to keep the Cardinals in the 30-year-old Busch Stadium II. “We were really novices at first,” Baur would later tell the Post-Dispatch. “We really didn’t realize how outmoded Busch Stadium was.”

A trip to Jefferson City in early 1997 began a five-year effort to secure public funding for a new stadium. The Cardinals entertained proposals from no shortage of communities in and around St. Louis, playing them against each other and threatening to leave the city for the first time in the club’s hundred-year history if its demands weren’t met—a move that, make no mistake, would have been devastating to downtown St. Louis and therefore, according to basic principles of urbanism and economic development, badly damaged the metro area as a whole. When a preliminary deal fell through in May 2002, city officials sounded desperate:

The Cardinals hope that they’ll benefit by a bidding war between area communities eager to be the site of the team’s planned new ballpark to replace 36-year-old Busch Stadium. …

[Mayor Francis] Slay and his aides fear that the Cardinals’ departure could touch off a new urban exodus that could derail already precarious efforts to resurrect downtown and rescue city neighborhoods. Losing the Cardinals “would be a terrible, terrible blow,” [Jeff] Rainford said.

Unable to contribute funding in a more direct manner, the city ultimately agreed to a massive concession: the full and permanent abatement of the five-percent amusement tax previously applied to Cardinals ticket sales. Assuming even a modest rate of growth in ticket prices over Busch Stadium III’s first few decades of operation, that’s a tax break on the order of several hundred million dollars. When added to a package of various other tax credits, abatements, and subsidies totaling about $107 million, that means the vast majority of the stadium’s cost was ultimately shouldered by the public—in spite of the team’s ludicrous insistence that it was 90% privately financed.

Support for public funding among city officials and the public hinged on ownership’s fulsome, repeated assurances that the new stadium would be accompanied by “Ballpark Village,” which the team described as “an entire residential, business and entertainment district that will help spur economic revitalization in downtown St. Louis.” Approval of the stadium deal, said the Post-Dispatch as the club and city continued to negotiate in 2002, “depends heavily on the prospects for Ballpark Village.”

After years of delays and downgrades, the first phase of Ballpark Village finally opened in 2014; a second phase, which will add residential and commercial developments but still fall short of the vision the team publicly touted during stadium negotiations, is scheduled to begin construction later this year. The Cardinals and their development partner, Baltimore-based Cordish Companies, obtained tens of millions of dollars in additional tax breaks for each phase.

But even as ownership has justified those tax breaks by emphasizing Ballpark Village’s positive economic effects on downtown St. Louis, some city leaders have criticized it for just the opposite. Phase One’s handful of dining and entertainment options, say critics, have done little more than funnel money that would otherwise be spent in surrounding bars and restaurants into the Cardinals’ pockets.

The team didn’t exactly help to counteract this perception when, late last year, it refused to waive a height restriction on the BPV-adjacent property owned by longtime Cards broadcaster Mike Shannon, blocking a rare potential new development in a city center that badly needs it. The feud has reportedly been resolved, but the message was clear: Cardinals ownership is happy to “help spur economic revitalization” downtown, as long as it’s on their terms, and in their interest.

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In the years following its acquisition of the Cardinals, the “Baur-DeWitt group,” as the Post-Dispatch had initially dubbed it in December 1995, began to take on a decidedly more singular shape. Hanser’s official role gradually diminished, first from chairman to vice chairman and then, in 2010, from vice chairman to director. Baur served as the club’s treasurer, but he, too, became a less visible part of the organization as the years went on; when he died in 2011, longtime St. Louis journalist Alvin Reid eulogized him as the co-owner who “fell silent” during stadium negotiations and “never got his due.”

DeWitt, meanwhile, quickly asserted himself as the managing partner and public face of the club. He appointed his son, Bill DeWitt III, the team’s Senior Vice President of Business Development, and in 2008 installed him as its President. While information about ownership shares and how they may have changed over the years is exceedingly scarce, news reports have identified DeWitt as majority owner since at least 2000.

Whatever the ownership group’s exact composition, the investment it made in 1996 has been an astoundingly successful one. The franchise DeWitt and company bought for a bargain price of $150 million—essentially reduced to $50 million by the sale of the parking garages—was last year estimated by Forbes to be worth more than $1.6 billion, good for an annualized return of nearly 19 percent.

Despite playing in a small market, the Cardinals, buoyed by stellar home attendance, regularly rake in some of the highest revenue totals in the league, according to independent estimates. When measured as a percentage of total metro area personal income, per figures released by the Census Bureau and the Bureau of Economic Analysis, the team’s average annual gate receipts are the highest in the league. Put another way: the people of St. Louis spend a higher proportion of their money on the local nine than any other fanbase in Major League Baseball.

gate-vs-total-income

Particularly in the last few years, however, the Cardinals’ virtually unrivaled levels of fan support haven’t been matched by ownership’s investment in the on-field product. In 2015, the team’s opening-day payroll represented only 41% of the previous year’s total revenue—a ratio that ranked 23rd in the league, a few spots above the Madoff-crippled Mets and a few more above Jeffrey Loria’s notoriously parsimonious Marlins. Figures released by Forbes and other sources may not be accurate to the dollar, but the broad-strokes picture they paint is of a Cardinals organization that has gotten cheaper and cheaper over the last decade or so—from a 56% payroll-to-revenue ratio in 2008 to barely above 40% heading into the 2017 season. That’s a far steeper decline than the league-wide ratio’s two- or three-point drop over the same period.

The gap between the Cards’ top-tier fan support and low- to mid-tier spending levels has made them one of the most profitable clubs in baseball. Their 2014 operating income of $73.6 million was the league’s highest; the paltry $59.8 million they made in 2015 ranked third. In those two years alone, then, the franchise earned DeWitt and his ownership group nearly three times the amount they had paid for it twenty years earlier. A few more years at that clip, and the team that claimed it needed several hundred million dollars in public assistance to finance the construction of a new stadium will have turned a profit equal to that sum in all of a half-decade.

Cardinals ownership is swimming in cash, and the pool is only going to get deeper. Not only will a new broadcast-rights deal that begins next year raise TV revenues to an annual average of $67 million over its 15-year term—more than double the figure the team received in the last few years of its current deal—it also gives the team a 30% ownership stake in Fox Sports Midwest, income from which isn’t subject to MLB revenue-sharing system. DeWitt, who is influential among his fellow owners and close to commissioner Rob Manfred, also stands to make further truckloads of money via his share in MLB Advanced Media and its spinoff BAMTech, which landed a billion-dollar investment from Disney last year.

The Cardinals are, in short, an outrageously lucrative business venture—a fact that seems to be an open secret everywhere but in St. Louis, where great care is taken to present an image of the club as a plucky underdog that can only succeed on the field by avoiding high-dollar free agents and only remain viable off the field with ample amounts of public funding.

* * *

Bill DeWitt is not your friend. You may, having read some flattering profiles of him over the years or seen him wave smilingly in your direction at a World Series parade, feel a certain friendly affection for him, but he is not your friend. Your interests and his are rarely aligned, and they are often entirely at odds with one another.

It’s probably true that you would both like the Cardinals to win baseball games, but that’s pretty much where it ends. You’d like to buy tickets, concessions, merchandise, and TV subscriptions at the lowest possible prices and enjoy the highest-quality possible products in return; DeWitt and his ownership group would like to turn the largest possible profit by maximizing revenues and minimizing expenses, a goal that is materially, fundamentally, definitionally contradictory to your goals as a fan.

None of this is to say that Bill DeWitt is a bad person, or even that he’s a bad owner; it’s simply to accurately describe the fan-owner relationship, which is far more adversarial than it is collaborative. That’s fine—at least, fine insofar as this is the system to which we as a society have consented—as long as this reality is clearly understood.

To obfuscate that reality, though—to lionize Bill DeWitt as the Anti-Kroenke, an omnibenevolent caretaker motivated only by a desire to bestow good baseball upon St. Louis and reinvest all the money we give him in the team and community, in the face of so much evidence to the contrary—is not fine. And while it’s natural to expect that the Cardinals themselves would want to advance that narrative, when you see anyone else do it, it’s worth asking yourself whose side they’re really on.