This looks at talent acquisition via trades and free agency, not draft-and-develop
Earlier in the off-season, I published a study of how teams acquire players and how those acquisition strategies correlate with success. The original impetus of the study was to determine if “draft and development” was the best strategy. That study was published HERE. I include this link for two reasons 1) in case you missed it and might be interested, and 2) I will likely make some assertions (ie. rules of thumb) in this article and I don’t want to have to re-establish those observations. So, if you find yourself going “Huh?” at one of my statements or observations or rules of thumb, gander back to the original article and see if you agree with my original thesis. Feel free to discuss or challenge in the comments. I try to respond to challenges and questions. If nothing else, it helps me gauge where I could have done better in the original article. And really, with baseball, the discussion and debate is half the fun.
While “draft and develop” is a very good strategy and definitely a cost-efficient way to acquire talent, it has its drawbacks. Notably, the long lead times and the high level of uncertainty (7-10 years before you really know if you drafted well). And it is a lot better strategy if one is actually good at it. Trades and free agency signings tend to have shorter “response times” and some more certainty, as seen by the higher correlation of each team’s non-drafted WAR to actual wins.
Earlier articles have demonstrated that the Cardinals are very strong in the draft-and-develop world. Top 20%, arguably elite. Even with the latest draft classes that can reasonably evaluated, and even with the lost 2017 draft year. This article will explore how the Cardinals have done on the other side of the equation – acquiring talent through other means than draft-and-develop. What they call “the chase mode”.
Spending vs. Talent
My unproven theory is that most payroll spending is driven by the contracts of acquired talent, either via trade (Arenado), free agency (Contreras) or extension (Goldschmidt). Molina, Wainwright and Pujols (all draft by STL) would be the obvious exceptions to this, so it’s not an absolute. Even in those cases, I even wonder if those contract extensions are valid to leave in the “draft and develop” bucket, or if they should be treated as just another free agent signing. I digress…
If I go ahead and take payroll as a proxy for what they Cardinals invested in acquiring talent from the outside, I compare payroll spending to the actual delivered talent (acquired WAR) over the 25-year period 2000-2024 (with 2020 excluded). As shown below:
The X-axis is total acquired WAR, the Y axis is how the Cardinals season starting payroll compared to league average and the points represent the results of each season, with color indicating playoffs (or not).
• They experience a mild correlation (.38) between how much they spend each year and how much WAR they acquire via non-drafting routes (ie. free agency and trades). FYI … the league wide correlation is .34. So, not bad.
• The early years 2000-2005 had much higher acquired WAR total (the Jocketty era). The later years (the Mo era) have much lower acquired WAR totals.
• Notice the downward progression of acquired WAR from 2021-2023. Funny how the trend seems obvious now, huh?
Where does the talent come from?
If we zoom in a bit, we can see some other stuff. I looked at average WAR over the 25-year period, then over the last 10 years, along with spending and wins and losses. These numbers are the average for each season in that period (25 years or last 10).
What we can see is that over the last 10 years, Cardinal drafted WAR is just slightly higher than the entire 25-year period. The acquired WAR has dropped about 10% off the 25-year average (by 2.3 WAR), which you can see translated directly to wins-losses (2 less wins on average). It is interesting how a regression of 2 wins (average) ends up with a sense of increasing mediocrity. Also interesting is that Cardinal’s payroll (against league average) has declined in the last 10 years. There is a mild correlation between payroll spending and talent level both across the league and in St. Louis, so it stands to reason if they spend less (on average) they will win less (on average). And that is what has happened. Unfortunately, the correlation is mild enough that “spend more” wouldn’t be the high probability solution.
I do wonder about what happened around 2014. Check out the second to last column (Payroll Factor). Why the abrupt downward shift in spending? It looks like something more than normal oscillation. FYI – payroll factor is one of those things explained in the prior article.
This may be subtle, but I see that the gap between drafted WAR and acquired WAR has trended closer to 1:1 ratio. That is 15% closer than the whole period. This appears to have allowed them to reduce payroll by ~5% of league average. But the ratio change was all in reduced acquired WAR, not matched with increased drafted WAR.
If I were to factor a 5% salary increase to get them back to historical norms, that would translate to something like $8.5m in increased spending (of course, they are decreasing payroll, but that is another matter). Would $8.5m in increased spending bring them back the 2 WAR they’ve shed and the 2 wins they’ve lost in the standings? Doubtful. Both because $8.5 would likely be around 1 WAR and the correlation factor of .34 would make even that an uncertain investment. Since they lopped off $8.5m in payroll, I’d expect they should lose about 1 WAR, not 2. They were not as wise in their cuts as they could have been. Let’s see if I can measure that.
Spend, but spend wisely
I created a new metric called “payroll efficiency”. In this I divided the acquired WAR value for a year into the payroll factor for that year. The intent is to measure “bang for the buck”, using the normalized payroll factor, so I can compare to the rest of the league over long time frames. A high payroll factor and a low WAR would produce a poor payroll efficiency number. Let’s check.
In 2023, the Cardinals were at 110% of league average in payroll and got a paltry 16.2 acquired WAR for their spending. That produces a payroll efficiency factor of .15. Apparently, that’s not good in this model. In 2004, the Cardinals were yet again at 110% of league average in payroll and got a robust 38.9 acquired WAR, for a payroll efficiency of .35. That is really good in this model. Quick reasonableness check bears out and a range is established at .15 (bad), .20 (acceptable) to .35 (really good). Let’s play that out over the entire 25 years, dividing the results up between playoff and non-playoff years. I also included the last two years for visual comparison.
What do we see? Well, the talent difference between a typical Cardinal playoff and non-playoff season is about 5 WAR. The majority of the difference is defined at how well they acquire WAR (except for the last 2 years), as drafted WAR is pretty steady across all seasons good and bad. Interestingly, the Cardinals spent more on playoff teams and the efficiency factor is .03 higher in those good years. That’s about 15% better. On average, they spent more AND they spent wiser on the playoff teams. Cause or effect?
Compare this to their most recent outcomes (2023 and 2024). Their payroll efficiency was below the non-playoff team average, indicating they are getting worse in the “spending wiser” category. This was true across both years, one year in which they undercut league average (ie. went cheap) and another year where they were right back at their 110% of league average mark. Also, I note that drafted WAR results have been below par the last two years. I guess both avenues going sideways simultaneously leads to poor outcomes.
I wonder how many view the last two years under-performance in drafted WAR as a blip and how many wonder if it is the first two points on a downward trendline.
The problems
I see two inefficiencies. One, that the draft-and-develop program hasn’t replaced the lost WAR they aren’t acquiring (either because of reduced spending or inefficient spending). I will openly question if they can improve drafting. The Cardinals are already in the top 3 in the last 10 years. How much better can they really expect to get? Two, they are spending inefficiently. I will show that more below in “How do the Cardinals compare” section. I would say the inefficiency of spending is at least an equal factor in declining WAR than the reduction in total spending.
If I were to profile how you’d build a typical playoff team (the light red row in the above chart), I’d say you’d aim for 40 WAR in projected performance. If you’re the Cardinals, you’d expect about 18-ish to come from drafted players, and you need to fill the other 22-ish from acquired talent. Such a team might get you in the 88-90 projected win range, and you’d want to spend about 110% of league average in payroll, and spend it wisely, so you get the 22-ish WAR you need to round out the roster.
If I look at next year, given the 14.6 drafted WAR figure from 2024, I’d be willing to take the over on a drafted WAR projection of 18, but not by much. I have a hard time seeing an acquired WAR of 22, though. Hard to say where they will be in payroll relative to the rest of the league. The Cardinals have cut a lot, but others have too. They might end up right back between 100-110% of league average after all the smoke has cleared (that is a fire fighters term of art).
How do the Cardinals compare?
I bet you were wondering when I’d get around to this. If you buy my payroll efficiency metric, I can apply it to the rest of league and see how the Cardinals stack up. Let’s see.
In this boxplot, the boxes are league wide payroll efficiency measurements. As you can see, the middle quadrants range from ~.15 to .27. A pretty narrow range for 50 percent of the results to fit in. Note the break point at 2007, where the Cardinals start to consistently fall below the 50th percentile in payroll efficiency. Only two seasons in the last 20 have been above 50th percentile (2021 and 2016). When Goldy and Arenado were producing at high levels, the payroll efficiency was pretty good. Suffice it to say, the Cardinals end up in the lowest quadrant too many times.
What about all those blue dots (the outliers). Care to guess which 2 teams make up the most recent outlier points? Milwaukie and Tampa Bay. I find it fascinating that absolutely none of the elite draft-and-develop teams have even a single entry in the payroll efficiency outliers. I guess you can be good at one or the other, but not both. Just as an irrelevant side note: The outlier at the very bottom, you ask? The Angels are horrible at payroll efficiency. But you probably knew that, already.
Conclusion
The Cardinal’s draft-and-develop strategy is a strong one that performs well. It has done so well that it looks like an uncertain, at best, proposition to double down on this strategy as the primary means of acquiring additional talent. It makes sense that they’d (re-)invest in maintaining a steady flow of talent, but unsure that they will see much improvement from the steady 17-18 WAR a year average. I mean, based on what even the best draft-and-develop organizations do, getting over 17-18 WAR/year would be a tall feat. It would likely require being more successful in the international free agent space, particularly Japan, but they are naturally constrained there. And that takes money, and wise spending acumen.
Likewise, no matter how good they are at draft-and-develop, the Cardinals along with every other team in baseball must expect to round out their talent in the free-agent and trade markets. If they wish to be competitive more than occasionally. In this area, spending wisely is as great a concern as spending a lot. This, I think, is where they could stand the most improvement. On the surface, it looks like some incremental improvements could be the difference between also-ran and annual playoff contenders. They can clearly be perennial playoff contenders at 110% of league average payroll. There is little in the data that suggests they need to compete, spending wise, with the big-spenders. The trick is to allocate that payroll wisely.
To me, on the theory that it would be easier to improve on the mediocre outcomes (trades/free agency talent acquisition) than improve on the already elite (draft-and-develop), I’d propose this is where the most improvement should be sought.
Thoughts?