Do the Cardinals Deserve a Competitive-Balance Pick?

If you haven’t heard the news, the St. Louis Cardinals received their punishment from Major League Baseball this week in response to the actions of former director of amateur scouting, Chris Correa. Correa hacked the database of the Houston Astros using some variation of the password Eckstein. As Jeff Sullivan explained, the Cardinals are expected both to pay the Astros $2 million and give them two draft picks, numbers 56 and 75. The consensus seems to be that the Cardinals got off light.

As Grant Brisbee noted, the second of the Cardinals’ picks has actually been given to them in the form of a competitive-balance pick, which provides convenient timing to discuss whether the Cardinals should even have that extra pick to begin with.

Per the recently established CBA, 14 teams will receive competitive-balance picks every year. Teams qualify for these picks by placing among the bottom 10 of major-league teams either by (a) revenue or (b) market size. According to Forbes, the Cardinals actually place among the top 10 of all clubs when it comes to revenue. They rank 24th, however, by market size. Therefore, they qualify for an extra pick.

While there seems to be much consternation about the Cardinals’ hacking penalty right now, wait 18 months. If the club loses Lance Lynn to free agency and then receives a better comp in addition to their own normal pick, they’ll possess three picks among the top-40 selections.

Question of the hacking scandal aside, there are questions about whether the Cards deserve any comp picks in the first place. By one definition, they certainly do: they meet the criteria agreed upon by the league.

There are plausible arguments against the characterization of the club as a “small-market” franchise, however. Most of them begin with a discussion of fanbase. Consider: here are the annual attendance averages per team over the last five years, with data collected from Baseball-Reference.

For the most part, teams that receive compensatory picks appear in the bottom half of this chart. The few teams in the bottom half of the chart not receiving compensatory picks have either been tanking or been bad, but not necessarily on purpose. Seattle’s attendance has improved over the past few years as the team has put up better records. Milwaukee’s competitive teams in the early part of the decade have led to good attendance. Colorado has a lovely ballpark. The Cardinals, though, are way up there, ahead of some of the monsters of revenue. Given that attendance, the Cardinals have been able to spend at a pretty high level compared to the rest of the league, as the following graph shows.

Again, we see mostly teams carrying low payrolls towards the bottom (or right side) of the chart, most of them receiving a competitive-balance pick. Only the Astros and Braves, who have been rebuilding in recent years, join them. The Cardinals rank 11th overall. Perhaps that mark isn’t totally representative: the Cubs have surpassed them in payroll recently and the Mets would surpass them if not for ownership difficulties. Even placing those two clubs ahead of St. Louis, though, the Cardinals would still appear comfortably in the top half of teams. Baltimore is up there, too, although that franchise has benefited from receiving the revenues not only of their only television broadcasts but some of the Nationals’, too, which provides additional revenue.

So, in the Cardinals, we have a team that has a ton of fans. The money that comes with those fans enables the Cardinals to spend in the upper half, nearly the upper-third, of baseball. As a result, giving the club an additional pick for competitive balance seems kind of foolish. However, the Cardinals do operate at the shallow end of the pool when it comes to their market size. The graph below shows every team except for Toronto, who broadcast in all of Canada, and their television market size.

The bottom-10 teams on this list all automatically qualify for a compensatory pick, so even though Baltimore is still reaping dividends from the Nationals’ television situation and even though the Cardinals draw three million fans per year, they automatically receive a pick. The Arizona, Minnesota, Oakland, and Tampa Bay Rays are all among the bottom-10 teams in terms of revenue. Oakland and Tampa Bay suffer due to stadium issues with the former also sharing their market with a more popular team. Minnesota, meanwhile, is right on the edge in terms of market size, while Arizona just started a better television contract.

We could argue that the Cardinals’ market size should actually be bigger given their regional history and the blackouts that occure in neighboring states, though that isn’t really reflected in their television contract, as shown in the graph below taken from this piece last year.

The Cardinals are starting a new television deal in 2018, and it will provide more money than they’re receiving now, but it still won’t place them in the upper echelon of teams. The last two graphs illustrate how the Cardinals are a lot like most of the small-market teams when it comes to some local disadvantages, while the first two graphs show how they differ from those same clubs. So how should we reconcile the two?

On the one hand, the Cardinals don’t need a lot of help. Yes, some of their revenues are the product merely of winning — which, presumably, is the product of being a well-run organization. Some of those revenues are also due to Cardinals’ longevity as a franchise, though — and were, for a long time, the only team west of the Mississippi (if only by a few hundred yards). Assuming you think competitive-balance picks should exist at all, if you think they should be revenue based, the Cardinals don’t deserve a pick. If you think they should be market based, then they probably do. If you think it should be a combination of revenue and market, this is what a simple average of the rankings looks like (after somewhat randomly placing Toronto in the 11th spot, owing to reports that there are around 14 million television households in Canada):

The revenue numbers here are from the 2015 season, so the Royals’ figures are due for a World Series spike. That caveat noted, this table provides an idea of how one might assess competitive-balance picks based on a combination of market size and revenue together. The bottom 14 teams, theoretically, would be those receiving extra picks. The Cardinals appear at the top of this particular group.

Perhaps this scenario isn’t appealing. If so, you could limit extra picks to teams in the bottom 10 of both revenue and market, leaving just the Brewers, Marlins, Orioles, Reds, and Rockies. But that excludes some teams that appear pretty deserving, like the A’s, Royals, and Twins.

Perhaps one solution would be to reclassify the clubs each year, but that would only encourage creative bookkeeping and other hassles with which MLB might not want to deal. If you’re going to have a system that compensates for smaller markets and lower revenues, there’s an equal argument to keep the Cardinals in as there is to leave them out. What we do know is that not enough owners cared enough to devise a system to keep them out.