Public funding for Busch Stadium upgrades? Too soon to tell, says Cards ownership

ST. LOUIS – Big decisions loom for the future of Busch Stadium III. The St. Louis Cardinals envision some major upgrades to help the ballpark live long. 

When and how those upgrades move forward remain to be determined. And in light of recent rumblings, there’s an emphasis on the how. 

Last month, the Riverfront Times published an article suggesting that the Cardinals ownership group might push for public funding to support long-term renovations. 

Cardinals president Bill DeWitt III doesn’t particularly agree with that assessment.

DeWitt joined FOX 2 Sports Director Martin Kilcoyne for a conversation on 550 KTRS earlier this week. He offered the following remarks in relation to plans for stadium upgrades and the Riverfront Times report.

“We really don’t have a [long-term renovation] plan, and that’s probably why this conversation is probably a few years premature,” said DeWitt. “Because the RFT did this article titled ‘Cardinals seeking public funding,’ which is just a lie. We’re not seeking anything. I don’t even know what the full project is going to look like. We’re just embarking on that process of determining those big items, the sequence of those items, and then the next step would be how we would finance it. So all of that’s a little premature.”

DeWitt tells Kilcoyne he hopes to build a plan by next year, one that’s structured to help Busch Stadium stand the test of time for decades to come.

“We just want to make sure we do our responsible duty of making sure this facility doesn’t fall behind,” said DeWitt. “That it stays one of the top facilities in the league, and that we view it as an investment in the long-term viability of the Cardinals and Downtown [St. Louis].”

DeWitt discussed a variety of topics on Tuesday, including the state of Busch Stadium and Cardinal fan frustration, as part of his appearance on The Kilcoyne Conversation. These were among the top talking points…

Some background. This interview was about stadium renovations. I did ask about fan frustration and the team’s awareness. BD3 is in charge of business. Mozeliak is in charge of baseball. I need to talk to Bill DeWitt, Jr about the state of the franchise/declining product. https://t.co/zqtpdvMUkr

— Martin Kilcoyne (@martinkilcoyne2) May 11, 2024

Stadium Health

Martin: “The stadium renovations… Give us a timeline here… Year 19 of Busch Stadium III. It has flown by. But what is the timeline right now in terms of things you need to fix at somepoint?”

DeWitt: “First of all, our philosophy is, we want to make sure that this stadium is around indefinitely. Every year, we put $8-10 million in capital into it and a few million additional into operating expense-type items. We don’t ever want to have to replace it, at least in my lifetime. So that’s the premise.”

“When you get up on 20 years, every situation is different, but it starts to get to where there’s some big things that need to happen. Things like replacing all of the seats. Things like HVAC systems, chillers. We have a big office renovation that has to happen, although that’s kind of maybe not fan-facing. And then our concessions probably need a full overhaul. We’ve got some advancements in technology we need to work on. WiFi systems need upgrades. I mean, you get the idea, I can keep going on and on. But there are a lot of things that are big-ticket, and when you got a building that’s a million and a half square feet, just replacing the light bulbs can be a million-dollar proposition.”

Martin: “You’re doing stuff every year. What’s the current health of the building, would you say?”

DeWitt: “I’d say the current health [of Busch Stadium] is good. We’re certainly better than the average stadium at 18 and a half years, for sure. Because, like I’ve said, it’s our own house. You keep your house in good shape when you own it. When you rent it, maybe you don’t as much. So we really believe in the long-term need to keep ahead of that curve. We don’t want to fall behind on anything so much that the cost to repair it gets out of control. That’s the theory. We believe it’s a great configuration. It can do what we need it to do. It’s in the right place, Downtown St. Louis. Plus, you got Ballpark Village. We want to continue to invest in that. So yeah, we’re not going anywhere, but we got to be cognizant of these timelines.”

Initial Funding of Busch III

Martin: “I think we all sort of became lease experts with the Dome and the Rams. You guys own it. Is the math: When will it be paid off? Or what are the bonds? With the Dome it was always, ’30 years. 30 years.’ Is there any math similar to that for you guys?

DeWitt: “Yeah, but there are a few things that are kind of moving parts related to that.”

“The city’s primary contribution, pretty much their only contribution to the stadium financing for us, back 20 years ago, was the abatement of the admissions tax. We pay sales tax just like everybody else on all of our transactions, but then there’s that additional five percent that was tacked on, which was pretty egregious. I don’t know when that first started, but I think back in the 60s, before all this competition on stadiums around the country.”

“Anyway, the city abated that for a long period of time, and that helped us finance [the stadium] privately. And what happened was, the taxes grew so much because of the new revenues and the good teams and everything. The city actually receives more direct tax revenue now, by a lot, than they did before they abated that tax.”

“The city’s [contribution] was that tax abatement. The state did some infrastructure work for us, and the county gave us a loan that came through the LCRA, which is accruing interest, and we owe that back to them. That was it in terms of the financing, and that’s why I say confidently that we’ve financed it 90 percent privately, which we did.”

To reiterate the math, DeWitt acknowledged that Busch Stadium was 90 percent privately financed, with the other 10 percent coming from government arrangements, agreements, and programs in its initial funding plan.

Martin: “Was it a difficult process to get it done? The agreement that does exist.”

DeWitt: “Any time you’re doing public financing stuff, public-private partnerships, there’s a lot of brain damage. There’s a lot of work that’s unpleasant from the perspective of going out there and trying to get these deals done.”

“I just think that fans should recognize that in this case, and I know that studies are out there that public funding of stadiums on a net basis is just moving around, or it’s not additive, or whatever the case may be. There’s a lot of academic work out there. But when you look at that in aggregate, you have to look at the teams themselves, the actual deals. When you look at the deal we did, it ended up that the direct tax revenues, and I’m not talking about multiplier effects and spinoff effects and whatever else could happen, or even Ballpark Village for that matter.

“The direct taxes that the city receives now are more than what they were before the new ballpark, and the same is true of the state by even a wider margin. And that’s because revenues grew, salaries and payrolls grew. You know, players pay the earnings tax. Even when Shohei Ohtani comes here for three games, he pays a little fraction of that $70 million a year to the city to that one-percent earnings tax. I don’t think people realize that. So the Cardinals being downtown is a very important economic driver for a direct tax revenue to the city, and those have grown over the years, even with their contributions of the admissions tax abatement.”

Modifications

Martin: “What are the stadium trends? Are less seats becoming a thing? You guys have done more amenities, even the right field foul pole, where there’s more casual standing around. What are the trends with fans that you’ve had to sort of adapt to?”

DeWitt: “Over the years, we’ve modified this ballpark a lot. In some respects, I wish we had made it out of clay so we could just keep moving things around a lot easier. Year one is an example. We put a giant escalator down the right field line. We overshot on party rooms year one in ’06. And by ’07, we created the Champions Club instead by ripping out some walls and creating a new space.”

“Fan interests and tastes are constantly evolving. This year, we’ve added another all-inclusive space called the Budweiser 703 Club. It’s a wonderful space because fans in St. Louis love all-inclusives. There’s just been a number of things, almost like a project a year at least, to cater to the changing fan needs and things. We’ll continue to look really hard at that. We talked about, this stuff is no fun to do, but [upgrades} are definitely part of this whole process. We’re going to come up with some projects that will definitely be fan-facing and that basic fans will really enjoy.”

Attendance

After speaking on modifications, DeWitt recircled to Kilcoyne’s inquiry on “less seats,” addressing Busch Stadium capacity and attendance trends.

DeWitt: “To your point about capacity, we are sort of larger than a lot of ballparks in this era that I’ve been talking about.” There were discussions on Milwaukee’s American Family Field and Baltimore’s Camden Yards before this comment.

“I’d say the typical number is around 40,000. Some smaller, some larger. We’re around 45 [thousand] and we can get it all the way to 46 [thousand] with standing room. Our attendance is the bread and butter of the Cardinals franchise. It’s what allows us to compete with the big boys, and we’re very fortunate because of our great fans. We think that having a little bit more of seating capacity is beneficial. We drive a lot of discounting and a lot of things to get butts in the seats. We believe that’s a really critical part of what makes the environment better and exposure to all generations of Cardinals fans, regardless of their ability to pay for high-priced tickets. We don’t take the philosophy that you have to make it super exclusive, because we think, just the way the good seats are closer to the action tends to generate that high per cap, whereas further-up seats are right for discounting and getting people into the ballpark to enjoy the game.”

Martin: “Bill, a question about attendance because some of the number lately will say, it’s the lowest-attended game in the history of the ballpark for a weekday game. But then I’ll see 31,200 or 31,500. Your low, or all-time low, is still a very high number, but what do you make of that right now? And those are tickets sold, correct?”

DeWitt: “Yeah, they’re always sold. So the actual number drops by no-shows, but goes up by comps. That’s the other thing people don’t realize. So the turnstile tends to be a little less than the announced number, but not by much. But the industry’s used that ‘tickets sold’ number forever. You can see, on a really nice day and a good team in town, the number they announce is the number [of fans present].”

Martin: “When you hear these stats that come out for everything, but the stat lately has been ‘the lowest-attended weekday game in the history of Busch Stadium III” and the number was 31,200, I’m saying that’s a pretty high low compared to most teams. But how do you view it? You don’t want to hit any kind of low, so how do you view that?”

DeWitt: “It’s never good to read that, but the reality is that we’ve had competitive teams, I mean that’s how crazy it is, for 18-plus years. A couple of down years, but that’s how consistently competitive we’ve been, that we’re only reaching lows 18-plus years into this thing.”

“You can look at both sides of that coin. And you’re right. If sort of our over-under this year is three million tickets sold, there’s a chance we may not hit that number, and we’ll get close if we don’t. But at the end of the day, when you look at attendance across the league this year, that’ll still be in the Top 7 or 8, or 6 to 8, somewhere in that range. It’s all relative. We have an incredible fan base, and my job is to not take that for granted and to give people a great gameday experience and a winning ball club.”

DeWitt later confirmed that the Cardinals sell around 70 percent of their tickets before Opening Day. “And that last 30 [percent] is a function of how the team plays, and maybe your schedule, your promotional work you do, and various things that play out during the season. There’s a swing factor based on how the team plays that also comes into play.”

Fan Frustrations

CONTEXT: At the time of this story’s publication, the Cardinals are 15-24 in the 2024 season and dropped their season-worse seventh straight game on Saturday. They sit last in the National League Central division, and they’re record is the sixth-worst in Major League Baseball in terms of winning percentage. This comes on the heels of a 71-91 season that ended up as the team’s worst finish in decades.

Martin: “What are you hearing right now? I feel like the White Sox season certainly amplified it because they’re having a rough year and you guys lose two of three. The angst, the frustration, it’s been building, I think. We went through last year with the last-place finish. What’s your sense of fan frustration as we sit here now?”

DeWitt: “It’s definitely high. We’re in last place in the central. We all believe, and even I think our fans believe, that this is a better team than this. When you just look at it, there’s some bright spots on the team.”

“I think the approach to our offseason pitching issues, which were the key problem last year, largely have worked out. I like our bullpen. There’s some positives there. It’s just, early on, a lot of the guys aren’t hitting at the same time. We’ve lost some close games and weird games. I remain optimistic, but concerned. It wouldn’t be fair to say, you know, I don’t think it’s panic button right now, but it’s like ‘Come on guys. We’re better than this.'” We should be able to climb into this race.”

Martin: “Are you sort of balancing, ‘Hey, we’ve had a great run.’ If you point to all of the moments in the last 20 years, there’s a lot of winning that took place. But a lot of fans are, ‘Well, I don’t care about that. I care about tonight. I care about tomorrow.’ How do you balance that as an organization that loves its past, and celebrates it, yet has to deliver today and tomorrow?”

DeWitt: “I think it’s just the reality of pro sports. It’s, “What have you done for me lately?’ for most part. If you look at any given season, that’s the most important one. Not last season, not next season. It’s this season. The most important season is right now. If you’re not in a great competitive situation, you’re going to hear it. I don’t have any problem with that. I try not to look at all of it, but I try to be aware of it. And we all are. It’s no fun when you’re getting mostly negative comments or ‘You should’ve done this’ or ‘This is what you should do,’ rather than ‘Hey, I love how you’re doing your job.’ We much prefer that. When the teams win, even the process on the business side gets easier with selling tickets, driving enthusiasm and promotional responses, and all kinds of stuff like that. We are where we are. We’re going to make the best of it and get this thing turned around.”

Martin: “And from last year’s last-place finish, it seems that ticket sales, coming into this year, were still relatively good. Was that the same corporate-wise too? Was there much of a drop off?”

DeWitt: “There was definitely a drop off. I think, you know, you start to realize really who your hard-core loyal fans are. And even become even more appreciative of that support when the team isn’t playing well. But I think the casual fans who are looking for that experience just based on performance on the field, they’re the ones that maybe are on a wait-and-see basis.”

“The thing I chuckle about is when I see sometimes comments [like], ‘Well, we got to not show up to send a message that this isn’t acceptable to the owners.’ I find that one somewhat [to be] illogical reasoning, because we just turned this revenue machine into a payroll machine. That’s what this business is. We try to drive as much revenue as we can, and then it gets put on the field for the most part. We have to obviously put on all sorts of other expenses. We’ve talked about the stadium earlier and all kinds of other things, but you know what I’m getting at.”

After pausing for a few moments in between thoughts, DeWitt highlights the impact of driving revenue in efforts to maintain a competitive ballclub, also linking revenue generation to payroll.

“I’ll just give you another way of saying the same thing. If you look at the revenue rankings in MLB, for the most part, with a few rare exceptions, your ranking in revenue translates into your ranking in payroll. And that’s been true of the Cardinals for many, many years. We have been sort of around 10th of 30th, plus or minus 8-9-10-11, and that’s where our payroll’s been. It matches for a reason, so we try to drive additional revenue in every way we can so that we can climb the rankings of payroll, because we know there’s a correlation between payroll and winning, not direct. We also have to [keep in mind] there are low-market teams that have performed very well. And it depends on where you are in the cycle of competing, right?”

“We don’t want to have to tank for five years to get good draft picks and do it the way the Astros did it, or the Cubs did it, or whomever. We’d like to be competitive every year. We’ve shown that it can work if we make good decisions and go from there.”

Cardinals Ownership

Addressed midway through the one-on-one conversation, Kilcoyne asks DeWitt about his family’s future intentions of owning the St. Louis Cardinals.

Martin: “How about, you said you wanted to be downtown for a long time? Just long-term, you know, your dad [Bill DeWitt II] has owned the team for a long time. Is there sort of an idea of the DeWitt family keeping this forever? I feel like this topic, you and I have talked about for 30 years. But is the long-term plan to keep it in the family?”

DeWitt: “Yeah, it’s status quo. My dad’s in good health. He’s 82. He’s as annoyed by the way we’re playing now as he’s ever been. You know, trying to figure out a way how to get better.”

“We’re excited about holding long-term and turning this ship back around. We think we have a plan to do it. We remain very excited and enthusiastic about Cardinals baseball and, in particular, this great franchise.”


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