The Financial Cost Of Losing Adam Wainwright

When news broke this morning about Adam Wainwright‘s “significant” arm injury, Cardinals fans quickly realized that their odds of winning the 2011 National League Central took a big hit. However, Wainwright’s loss will be felt beyond the standings, and if he is indeed out for the season, this injury could end up costing the Cardinals tens of millions of dollars.

Over at ESPN Insider today, Dan Szymobrski noted that losing Wainwright adjusted the Cardinals ZIPS projection down from 87 wins to 83 wins. That four win swing is enough to cut the Cardinals chances of winning their division from 35 percent down to 20 percent. When you factor in that they’ve also taken a similar hit in their chances of winning the wild card, it becomes clear that St. Louis will lose nearly half of their playoff expectation if Wainwright is indeed shelved for the season.

Beyond just being a bummer, this also has real financial ramifications for the Cardinals. In Baseball Between The Numbers, Nate Silver estimated the marginal revenue created by each additional win, and also by earning a playoff berth. While the revenue from average regular season win was estimated at about $650,000, that number is dragged down significantly by the low marginal value of wins that have little to no effect on a team’s playoff chances. Since no one makes the playoffs with fewer than 75 wins and every team that wins more than 105 games gets to play in October, the bulk of the value of a regular season win is tied up in the 75-105 range, and more precisely, the spike is really between wins 84-94.

This Cardinals team was directly in that sweetspot. The wins that the Cardinals are forfeiting by losing Wainwright are more accurately valued at about $2.5 million each. If we accept the four win drop that ZIPS projects, that would mean the Cardinals are going to lose out on approximately $10 million in revenue from regular season gate receipts, concessions, and merchandise sales. Considering that the book was published in 2006 (meaning that the analysis was probably done in 2004 or 2005), the totals are probably a bit higher now, but we’ll go with these for ease of use, and perhaps look at updating the study later this year.

It gets worse, however. Silver also estimates that, above and beyond the value of those individual wins, a playoff appearance is worth something like $25 million in revenue to a Major League team. If the Cardinals had a 50 percent chance of making the playoffs with Wainwright, they could have expected $12.5 million in potential revenue from their status as a contender. With just a 25 percent chance of making the playoffs, that expected potential revenue is now just $6.25 million.

That puts the financial loss of Wainwright’s injury at a total of $16 million in revenues that are now likely to be unrealized. For a team that is already struggling with the decision on how much they can afford to pay Albert Pujols, a $16 million drop in revenue is a really big problem.

Given the Cardinals tenuous standing in a tough division, as well as their need to find a lot of cash to pay their franchise superstar, the Cardinals could not afford this injury. The ramifications of this loss will likely be felt for years in St. Louis. It’s a huge blow to an organization that was in need of a boost, but instead, got punched in the face.




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Dave is a co-founder of USSMariner.com and contributes to the Wall Street Journal.


67 Responses to “The Financial Cost Of Losing Adam Wainwright”

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    • Terrifying to think that there is some possibility that Waino’s injury cost the Cards not only this season, but also the revenue needed to sign Pujols.

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    • Telo says:

      This gets a +1 and a sad face… unless you are a Brewers/Reds fan…

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      • Lion of the Senate says:

        I’m a Brewer fan and I’m not happy. I enjoy watching Wainwright and I look forward to competition. I’d much rather win a competitive race than back into the playoffs due to a weak division. This isn’t supposed to be the NFL where playoff slots are just given away to the undeserving.

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  1. Dan says:

    “Given the Cardinals tenuous standing in a tough division”

    Since when is the NL Central a tough division?

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    • Telo says:

      Just by virtue of having 6 teams makes it tough. But to really look at it – there’s a young, very solid all the way around Reds team only getting better, a Brewers team who clearly feels this their year to contend for all the marbles, a Cubs team who won’t embarrass themselves. The Pirates and Stros won’t make any noise, but they’re young and on the up and up (compared to where they were last year…)

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    • Joel says:

      I think it is not as much a tough division as it is a balanced division. The Brewers/ Cards/ Reds are all fairly equal and the Cubs, while not a playoff team, are probably an 80 win team. Pitsburg is bad…but not as bad as last year……and Houston while bad is probaly a 76 win team.

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    • TK says:

      When I read that, I knew it would take no more than 5 posts for someone to point this out. The NL Central is not a tough division by any standard other than “all divisions in MLB are tough divisions.”

      Someone said they had six teams, but I only count 5 MLB teams.

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      • os2011champs says:

        You’re kidding right?
        Astros
        Brewers
        Cardinals
        Cubs
        Pirates
        Reds

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      • highrent says:

        Then you need to recount
        Cubs
        Reds
        Cardinals
        Brewers
        Pirates
        Astros

        Unless you just ignore the Pirates on principal. It is indeed a 6 team league with at least 3 teams who could take it. Cards took a big shot in the face if Waino is out but who knows.

        http://mlb.mlb.com/mlb/standings/?tcid=nav_mlb_standings

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      • mhad says:

        I think Cameron meant that it is a tough division to win for the teams involved. With the Reds, Cardinals, and Brewers, you have three teams that can legitimately contend for the World Series, and that makes the Central a difficult division to win. It doesn’t necessarily mean that the bar is set higher, or that they are top long-term franchises. It simply means that there is no obvious top dog for which winning the division would be assumed.

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      • highrent says:

        sorry mean division not league.

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      • mhad says:

        Also, to os2011champs and highrent, I think the “5 mlb teams” was just a dig at the pirates. Or possibly the Astros, of whom many could argue are in worse shape.

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      • Adamsternum says:

        I’m still not convinced. I think Dave Cameron needs to break down the stats to prove how many teams there are in the NL Central.

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      • TK says:

        or maybe explain what happened to make the division that by far had the worst run differential in 2010 “tough” in 2011. mhad, I like your advocacy skills defending the authur, but the fact that no team in the Central is a clear favorite doesn’t make it tough. If two six-year-old girls got in a fight, you might not know who would win, but that doesn’t make them “tough”

        and yes, that was a dig at the Pirates, though maybe it would have been better if I said 4 teams as you are right, the Astros are in pretty rough shape right now (but the Pirates are long lasting losers)

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      • mhad says:

        It might not make the girls tough, but it will still be a tough fight to win. A six year old girl and Manny Pacao, on the other hand, would not be a tough fight.

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      • B N says:

        “If two six-year-old girls got in a fight, you might not know who would win, but that doesn’t make them “tough””

        This is true. It is their penchant for going directly for the hair and eyes that makes them tough- much like chimps.

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      • Pat G says:

        5 Teams definitely includes pirates, sorry to all the ‘Stros fans out there, but your team is a joke right now… i dont think i could name your starting 8/roational 5… and the only reliever i know is lindstrom because he was my closer for fantasy last season…. not an MLB quality club…. and not much help on the horizon either

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      • adohaj says:

        Made my day when people thought you believed there was only 5 teams in the NL central

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    • chuckb says:

      by “tough”, he means competitive.

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    • Tomas says:

      The Reds, Brewers and Cardinals aren’t tough teams to face? Please take a look at their rosters before talking nonsense. This isn’t five years ago.

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  2. Kevin says:

    Cardinals will make money no matter what. People go to games record regardless and spend money. I wouldn’t be to worried about losing 10 million. Got a feeling it will be a lot less.

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    • phoenix2042 says:

      yes, i suppose you could just ignore the entire article and go on the assumption that winning and losing has no impact on revenue.

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      • Nick says:

        Wasn’t Silver the guy who basically predicted exactly how each state voted in the presidential election?

        While it might not be scientifically rigorous, I wouldn’t dismiss the point of this article. If you’re, say, a Twins fan, and the Twins are playing meaningful games in the 2nd half of the year, you might choose to go to a game when Liriano is starting, but that choice is probably subordinate to your decision to go to a game. Any game. If you’re indifferent (otherwise) between two games and Liriano is pitching one of the games, you probably go to the Liriano game.

        I completely believe that revenue is altered like this. Who wants to buy a baseball to give to their kid when the team is 68-80 at a game in the last weeks of the season? Some people, but less than if the team was 85-63 and in the play-off hunt. Seattle probably sold more Felix Hernandez jerseys last year than the jerseys of any other player, but how many more jerseys would have been sold if he had been 19-5 and leading Seattle into the play-offs.

        You always have your die-hards, and you always have people who aren’t going to go to the games, and you always have people who never buy any merchandise, but I think a lot of people fall into the “fair weather” category where they might go to the game when the team is at the top of the standings or in the hunt. And, at the game, they might splurge for more merchandise and have an extra beer when the team is winning.

        Except at Wrigley. It doesn’t matter how the Cubs perform, the bleachers have basically become a really cool outdoor bar where you get to pay $7 for a glass of Old Style.

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      • fredsbank says:

        especially since liriano is apt to get hurt any second of the day, going to see any one of his starts could be going to see his last, and everyone wants a bit of history

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      • Barkey Walker says:

        Nick, checkout what the Nats did with Strasburg. To see him, you had to purchase four tickets. Because of this, and the fact that there was finally something to see, he actually brought people to the stadium, not just adjusting around to see his games instead of the duds you usually went to.

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    • sgolder06 says:

      I’m pretty sure whether or not they’ll be in the black isn’t the issue here. You’re going to get a lot more casual fans on day-of-game sales when Wainwright is starting, as opposed to McClellan or any of the other goomba’s they might be forced to start.

      And your “feeling” seems to lack some of the support and evidence that was produced in this article. Maybe you could elaborate on this feeling? Maybe it was just gas?

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      • hunterfan says:

        Do truly “casual” fans say, “Hey, Wainwright’s pitching, let’s go to the ballpark!” or do they say, “Hey, boss let me off of work early, let’s go to the game,” or “It’s a wonderful Saturday, let’s take the kids to the ballpark today!”

        My guess would be the former, but I suppose there’s no way to prove it.

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      • JH says:

        I don’t think specific players drive the box office nearly as much as being in the playoff hunt does. If a team has a chance to make the playoffs, more people come. It’s exciting. The games mean something. When teams are out of it, stadiums start to look like ghost towns. If you accept the basic premise of the article (that downgrading from Wainwright to his replacement takes a huge chunk out of the Cards’ playoff chances), you pretty much have to accept that they’ll be losing a lot of revenue as well.

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  3. PWH says:

    The Cardinals will get some insurance money, no? If they don’t squander it, it could mitigate some loss of revenue they’ll incur due to Wainwright’s injury.

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    • patrick says:

      very few pitchers contracts are able to be insured….so, more than likely, no

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      • PWH says:

        very few pitchers contracts are able to be insured

        There’s nothing I can bring to the table–empirical or anecdotal (at least not easily put together)–to refute this claim, but I don’t believe you.

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  4. Tito Landrum says:

    Cardinals fans are extremely loyal (borderline sheep). Although not making the playoffs would create a revenue dent, I don’t buy the premise that Waino’s injury and a less competitive team will hurt them tremendously at the gate or in terms of merchandise sales.

    You mention the Pujols issue as another cloud for the organization, but if anything, it’ll help push more fans to Busch this summer and prevent the Waino $$ decline. This could be Cards’ fans last chance to see Albert in a Cards uniform. Even if the team is 10 games out by August, fans will still come to see #5, possibly for the final time.

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    • Mike Savino says:

      I’m kind of on the same side here. I think Cardinals fans are probably much more likely to continue to support the team despite a few extra losses. More so, at least, than a team like the Pirates/Athletics/Astros/Nationals etc…I don’t have the data in front of me but everything I’ve heard about St. Louis is that its a baseball town through and through.

      I’m not sure that they’ll lose all the extra revenue from those wins. Shouldn’t it be mentioned that the Cardinals have recent playoff seasons and a world series victory? I’m’ pretty sure that affects fan attendance as well…I think the Cards have more wiggle room than just assuming they’re an average MLB draw.

      The playoff appearance, well, that’s obviously different. But it wasn’t clear that they would be a playoff team anyway…

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  5. Garrett says:

    Value based on marginal wins and playoff probability? True love.

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  6. Old randy says:

    I have a question; per Cots, waino’s options won’t vest if he is on the dl at the end of the season, which he apparently will be. Even if he’s injured, his options still seem like a bargain (though clearly a riskier one now). My question is, should/can the cardinals pick up his option(s) at the end of the year if he is indeed still rehabbing?

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    • DL80 says:

      Interesting point. It’s 9m for 2012 and 12m for 2013, but the team has to exercise them both at the same time. That’s $21 million of risk in the hopes he comes back strong. Since the first year after TJ is usually a mediocre one (or worse), you can’t assume much out of him then. Still, he’d only have to be a 2-win pitcher in 2012 and 2 or so in 2013 (or 4 over both years). Four wins total over both years seems totally attainable to me. He’s been worth almost 12 wins over the last 2 years.

      The real question is whether the team wants to make a $21 million gamble on a guy that may or may not ever even be a 2 WAR per year player again. He’ll turn 30 this year.

      Plus, if the Cards need every last penny to keep Pujols, they may not be able to keep a risky Wainwright. If Pujols leaves, what’s the point? If Pujols and Carpenter leave (both possible), the Cards need to go into immediate rebuild mode, in my opinion.

      On the other hand, the Cards may want to offer some kind of compromise deal to Wainwright sometime this season. Offer him 2 years for say $10-15 million total. Wainwright gets some security despite a serious arm injury; the Cards get a more reasonable gamble.

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  7. Christian says:

    The killer is in perception… suddenly, they’re not seen as a playoff contender. This, combined with the Pujols situation blowing up, could cause a serious backlash.

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  8. mike reese says:

    I think the Cardinals were prepared to let Carpenter go at the end of his contract knowing that they had a new number 1 guy in Wainwright. Now with Wainright’s return in question they may be forced to have to try to sign both Carp….making it all the harder to find the money for Albert

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  9. mhad says:

    If the Cardinals can’t sign Pujols, there will have to be bigger problems than Adam Wainwright.

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  10. Xeifrank says:

    Of course the Cardinals can always improve themselves in a trade, but those have costs too.

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    • Jason B says:

      Very true…but with their “stars and scrubs” roster its hard to find value that (a) other teams would want or value, and (b) isn’t a huge factor in their immediate plans.

      (Admittedly I’m not sure what their minor league system looks like.)

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  11. winwin07 says:

    If we’re talking about the Cardinals overall bottom line don’t forget that they’ll see a boost with U2 bringing their stadium show to Busch. Also, Wainwright’s option will not vest if he’s on the DL at the end of the season. You can almost certainly bet that that deal will be restructure.

    The effects are obviously still a concern but there are some not so obvious effects that will balance things out at least a little bit.

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  12. Lloyd mclendon says:

    The potential playoff revenue is really an all or nothing proposition… Either they get the 25 million or they don’t, you can’t halve or quarter that number to calculate the loss

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    • bluejaysstatsgeek says:

      What he was doing was computing the expected value of the loss.

      E(Value)=Sum of[(Pi)(Vi)], where Pi is the Probability of Event i and Vi is the Value of Event i. If the Cards had a 50% chance of making the playoffs, then 50% of the time they’d get a value of $25MM and 50% of the time they’d get zero. The expected value of this gamble if $12.5MM.

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    • Aaron says:

      This is false. The expected value is the amount times the probability of occurrence. The point here is the Cardinals’ probability of reaching the post-season decreased by 50%, so their expected income from the playoffs also decreased by 50%.

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  13. Anthony says:

    sign an “attraction” like Yu Darvish. Long shot. Really reeeeeeaaaaaaallllllllyyyy long shot. But still, he should be better than other options and the exposure the first month would be a gigantic boost.

    I’m not sure why everyone points to attendance as revenue. I get that it’s where they make most of their money. However, lots of money is made on broadcast rights and merchandise too. The Cards will still have a higher average attendance than probably 20 teams even if they’re 80-82, but less people will watch on TV and less people will buy jerseys. The Cardinals, much like the Yankees, Sox, Dodgers, and other traditionally great teams that haven’t been killed by 20 years of losing season always draw.

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  14. CircleChange11 says:

    The Cards will still be playing meaningful games late in the summer, since it’s doubtful any team in the NLC is going to run away with the division.

    I don’t see StL falling more than 6-8 games off the pace.

    Now, what will be interesting is what affect a monster year by Pujols keeping them in the division race will do for contract negotiations. If he slugs them in the division race, well there could be no greater argument in his favor.

    This just sucks for Wain, he is everything Matt Morris was supposed to be. His injury is most curious given the timing and severity.

    Cardinal fans will still attend games. From August on the push will be “Show Albert the Love” in hopes that he stays … And StL will likely be “mathmatically alive” in the September race. They won’t be the only team to experience injuries in the season.

    While it is certainly a huge obstacle, their demise, at this point, may be greatly exaggerated.

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  15. pft says:

    The prognosis for TJ surgery is very good, much better than for shoulder surgeries. He may even come back throwing 1-2 mph harder like many pitchers do.

    If Wainright was healthy, he makes 21 million for 2012 and 2013. If the Cardinals do not pick up the 9 million option for 2012, Wainright becomes a FA.

    He could end up making more money with a team like the Yankees than those two options would pay him. He will only be 30 in his comeback year in 2012 (say by ASB), so not so much risk offering him a 2 year deal for 21 million with a mutual option for a 3rd year at his market value (pre-injury). The expectation would be that Wainright pitches close to the pre-TJS Wainright in 2013 and 2014, with 2012 being pretty much a lost season or least a lost 1/2 season).

    So do the Cards pick up both options hoping for a pre-TJS Wainright in 2013. If so the total cost would be about what Wainrights market value is (pre-TJS). If not, I bet Wainright gets signed by the Red Sox or Yankees and Cards fans can watch Pujols and Wainright play in the 2013 ALCS, and maybe the World Series. LOL.

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  16. MC says:

    Why doesn’t Fangraphs post on their website an explanation of all the B.S. fancy shmancy stats that it uses (like ZIPS, WAR)…no one knows how these things are calculated yet their parotted mindlessly 500 times an hour.

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  17. Double D says:

    The timing of the injury is not so troubling once you consider that he had elbow issues at the end of last year that didn’t go away completely in the offseason.

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  18. frug says:

    One other cost not incorporated; the cost of whomever they acquire to replace Wainwright PLUS the cost of however much (if any) of Wainwright’s salary is not covered by insurance (I assume the team has a policy).

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  19. CircleChange11 says:

    That’s what I was thinking … That is was an injury that originated in 2010, but went undiagnosed in the offseason.

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