Interview with Cards VP Jeff Luhnow - Part 1

A new, exclusive three-part interview series with St. Louis Cardinals Vice President of Baseball Development Jeff Luhnow. Year Three - Part One

For the third consecutive year, Cardinals Vice President of Baseball Development Jeff Luhnow has granted an exclusive, in-depth interview to This time, responses to two dozen questions were completed on Friday morning, just prior to the Juan Encarnacion and Junior Spivey signings.


In this new three-part series, Luhnow first discusses the 2005-2006 off-season to date, then in Part Two, the investments in the international program and top prospects no one has yet heard of, followed in Part Three with a review of the 2005 Amateur and Rule 5 drafts, a player valuation update and much, much more.


Parts Two and Three will appear each of the next two days right here at



Jeff, overall how do you feel the off-season has gone so far for the team?  There have been some lows, such as the inability to sign A.J. Burnett and Brian Giles.


This is my third off-season with the Cardinals, and every one has been different.  In 2004, much of the activity occurred at the Winter Meetings when we traded for Marquis, King and Wainwright and signed Suppan and Sanders.  Last year, most of the activity occurred after the meetings, with the Mulder trade and signing the middle infielders.  I know that this off-season has been frustrating for many fans so far, but there are a few things that merit mention to keep it all in perspective.


First, without doing anything, we are starting off with three of the top position players in baseball, including the MVP of the National League.  Then you add a Cy Young winner to the top of the rotation and one of the game's most effective closers. 


Those five players form a core that just about every other team in baseball would love to have.  Then you add to that one of the game's best defensive catchers, an everyday shortstop and leadoff guy who gets the job done, and three proven starters who have been durable and effective on our team.  Not a bad core.


Second, it's always difficult to judge an off-season while it is still in progress.  Until opening day, the roster is continuously in flux.  I think more mistakes are made in reaction to the "pressure" of doing something rather than sitting still.  I truly believe in today's environment often the deals that are not done are the best deals for the team - especially anything that involves multiple years and tens of millions of dollars.


That hints at my third point, which is about the market for free agents.  In my opinion, it's best to think about players in the same way an investor would think about stocks or a private equity shop or venture firm would think about companies to fund.  The market for talent in our industry is not very efficient for various reasons, and as a result it's easy to get burned, but on the flip side it's also possible to find bargains due to the inefficiencies.  We've been able to avoid the former and take advantage of the later in recent years and that has helped our team be successful. 


Most anyone would agree that in the merry-go-round of shortstops last year, we ended up in the most favorable position.  That doesn't mean I think Eckstein is more valuable than Renteria or Cabrera, but it does mean that the value we received relative to the risk and capital invested so far has been better and probably will be by a large margin when all is said and done.


So back to your question... how have things gone so far?  Well, we haven't done any "bad" deals, which is a good place to start.  We've picked up several role players in Bigbie, Looper, Rincon, Ponson, Cruz, Bennett and Miles. 


And we aren't done - in fact you may hear something very soon, even before your readers see this piece.  So I'd say we've done OK for now, and we should revisit this question on opening day when we know who the 25 players will be on the big league roster.


But, it has to be doubly disappointing in Burnett's case since you thought the deal was almost done…


Burnett is a great pitcher (much better than his career won-loss record) and we all would have loved to have him up there with Carpenter and Mulder.  It's important to keep in mind that big money long-term pitching deals are a huge risk for any organization... just ask Texas and Los Angeles.  One bad deal can keep an organization down for years. 


Now, what makes a deal bad?  The biggest risk is injury, ala Dreifort, Brown and others.  But sometimes the player just doesn't perform like he has or is expected to (ala Neagle and Park) and that can be even more frustrating.  A.J. is not without risk, as he has been injured in the past.  I don't think his stuff will deteriorate if he is not injured, but the longer the contract, the more that becomes a consideration.


Everyone knew A.J. was the top free agent starting pitcher in this year's class, so any team who thought they could easily sign him was probably being overly optimistic.  Toronto wanted him and was willing to risk more than any other club to sign him, so hats off to them. 


I personally do not think that type of deal would have made sense for our club.  Too much risk, considering we have such a good core and don't need major surgery, but rather sensible moves to surround the core we have in place.


How do you respond to those who are critical of ownership for not increasing the player payroll budget? This is probably the #1 fan concern right now, based on input that I have received.


This is a difficult question, primarily because it's impossible for fans and/or the media to have the best perspective without knowing all the details of how the business operates.  Since these are not publicly traded companies, information is less readily available and it's easy to assume the worst. 


The idea that our ownership group is greedy and are "lining their pockets" at the expense of helping the team be competitive is simply ludicrous, in my opinion.  We are fortunate to have this ownership group in place, because they are smart business people and they want to win.  


If you analyze market size, revenue base, and payroll the Cardinals are in a very good position from a fan's perspective compared to most other clubs.  Our owners have done everything they can to increase revenue in a mid size market, which allows us to spend more money on payroll and other critical areas.  The recent criticism they have received is unjustified.


When you run a club like a business, you plan looking forward for many years.  You don't react to short term fluctuations otherwise you are constantly chasing your tail.  You have revenue and cost forecasts which you are constantly updating.  Much of what I've read assumes that the good year last year and the revenue projected for the new ballpark are unexpected and a bonus, so we should take that bonus and spend it on players now.  That doesn't make sense, if you think about it. 


Yes, 2005 was a good year, for the Cardinals and for many other teams in the industry.  But our ownership group, as sensible business people, had forecasts that were fairly accurate... so much of the "bonus" was actually already baked into the business plan.  Plus, the payroll has increased faster than the projected level that was in the plans over the past few years. 


Our organization has demonstrated many times that given the right opportunity, the investments will be made.  I bet that if you look at team payroll from the year prior to this ownership group taking control until today, the Cardinals have had one of the biggest percentage increases (and gross figures as well) in the industry during that time period.


Every team faces this issue because fans always want the team to spend more and improve the chances of winning.  This is natural!  To keep it in perspective, though, think about whether or not you, as a fan, would switch places with the fans from other clubs.  I'm sure there are a few situations that we would prefer to have (like the Yankees!), but in almost all other cases we'd rather have our environment than that of another club.


Talk to me about team investments in non-major league player areas such as the radio station, the new ballpark and the Caribbean academies. Do they impact the amount of the 2006 major league payroll?


Every one of those investments is expected to generate returns to the club that ultimately should help us remain competitive.  That's the point of making them.  Without the new ballpark, we probably would have a lower payroll now and definitely in the future.  The radio deal I don't know much about, so I can't comment. 


The investment in Latin America is more like a R&D investment and those types of investments tend to increase short term costs but have medium and long-term returns.  It's the same as the investment in the amateur draft.  These are necessary but they do cost money, so they have to impact current payroll in some way.  How many of us would choose to have another $3 million in payroll for this year and skip the draft altogether?  I'm sure some would, but most would not.  It would lead to short term gain but long term pain.


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