Matheny’s Financial Woes Could Cause Problems for the Cardinals

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Mike Matheny and his current financial troubles are an example in wondering what athletes are thinking when they choose to invest money or buy “stuff” in an effort to “diversify” or “make their money work for them.”

The Cardinals manager’s issues came to light over the past few days as a court ruling went against him, potentially wiping out his entire net worth. According to this piece on StLToday.com, Matheny’s goal of making a post-career living in real estate fell flat to the tune of owing $4.4 million and not having the cash or assets to pay it off. We saw Curt Schilling go through a larger-scale nightmare last year and it’s still ongoing as he’s selling his bloody sock among other memorabilia.

The reasoning behind people making unwise financial decisions that could compromise them for years if not for the rest of their lives is presented as preparing for the future. They can happen to anyone and are not a reason to ridicule. Matheny gave a viable explanation with the following (from the above-linked post):

Matheny’s interest in real estate started before he joined the Cardinals in 2000 to be their catcher.

He had been released by Milwaukee and, then, quickly thereafter, Toronto. He was 29.

“I stunk, and saw a bad trend happening in my career,” he said.

Matheny, however, nursed a long interest in real estate, and he started taking correspondence courses while playing ball. “Guys used to give me grief. I was doing homework while we were on the flights.

“I had four kids at the time, and I knew I hadn’t really done enough in the game to just sit back and do nothing,” he said.

Fair enough. He was finding other avenues to earn a living. But the same logic that stated that he needed to take real estate courses and find a post-baseball career should have said to him that the house he built with the amenities listed in the piece were unnecessary. The house had:

  • 17 rooms
  • Indoor batting cage
  • Home theater
  • Pool with a water slide and a private lake with a floating golf green in the middle

Most of the money he made in baseball was earned in the last five years of his career. With the Cardinals, he surpassed $1 million in salary for the first time in 2002 when he made $2.5 million. Over the next two seasons—his final years with the Cardinals—he made $7.25 million.

Matheny signed a 3-year, $10 million contract with the Giants after the 2004 season. He retired after the second of the three years due to post-concussion syndrome and his 2007 salary isn’t listed on his Baseball-Reference page, but because his career ended due to injury and he retired, presumably he got paid for the final year. His career earnings are probably higher than the listed amount of $18.729 million to the tune of another $4.65 million.

That would make over $23 million.

Also, a Major League player has ancillary income from their road per diem—AKA meal money. Clubs aren’t checking to see what players spend it on; they could go to McDonald’s for breakfast and lunch and pocket the leftover cash; plus they’re fed from an elaborate post-game spread after each game, leaving dinner a luxury and not a necessity.

They receive post-season shares, which Matheny got in 2001, 2004 and 2005; there are rights fees for images and other lesser-known streams of money coming in. Usually, the amount of money is negligible in comparison to their salaries, but for younger players or journeymen as Matheny was before he got to the Cardinals, it’s not.

In short, if a player wants to be frugal and save what will eventually come to a lot of money, he can do it.

And here’s a little known fact about MLB pensions clipped from BusinessInsider.com:

MLB players must play 43 days in the majors to earn a minimum $34,000 annual pension plan.  Just one day in the majors gets them lifetime healthcare coverage.  After 10 years in the big leagues, benefits grow to $100,000 annually.

Matheny spent 13 years in the big leagues.

So here’s the question I have to ask of Matheny and Schilling and any other player who blew a massive amount of money on business schemes: How much is enough? Could he not live on the amount of money he made in his career and the $100,000 per year he receives as a pension with free healthcare and the cachet that comes from living in St. Louis and having been a former Cardinals’ player? From the juice that the words, “I played in the big leagues,” have everywhere?

This isn’t simply a personal issue for Matheny. The Cardinals knew about this when they hired him as a surprise choice to replace Tony LaRussa. The players’ comments regarding this coming out were supportive, but that’s not guaranteed to last if the team starts playing poorly.

Matheny had on-field success in 2012, reaching game 7 of the NLCS before being eliminated. By standard assessment, he did a good job because the team won. But in reality, Matheny was functioning with LaRussa’s players; with the freedom of diminished expectations after the departure of the future Hall of Fame manager LaRussa; the best pitching coach of this generation, Dave Duncan; and the best hitter in baseball, Albert Pujols. His rookie strategic gaffes were expected and understandable for a first time manager at any level and could easily be glossed over by the bottom line fact that the team won and came within a game from a second straight pennant.

But how long is the player support going to last? How long will the mistakes be taken as learning on the job when Matheny has to actually do something other than stand in the corner of the dugout, look managerial and let the players play?

If the team is struggling, will his financial missteps be referenced as sapping his concentration and commitment to the team? Knowing how players are, if a pitcher is unhappy with being pulled from a game, will he turn around and whisper to his teammates, “Maybe if I pay off his debts, he’ll leave me in.” Will there be resentment from Matheny himself at the lofty salaries the players, who are essentially his underlings, are making? Will he roll his eyes and think about a hitter batting .220 and being paid $5 million? It’s a human reaction that can set the charges to blow the place up.

The Cardinals are transitioning from LaRussa’s team to something else. They won’t function on cruise control forever and it’s when Matheny has to manage that his evolution will be clearer. He might learn on the job, but he might get swallowed up by its magnitude and what has to be done post-LaRussa/Duncan/Pujols—things he might not be capable of doing.

Matheny’s own statement that it was the money he owed which spurred his return to baseball is also a potential issue. Whether it was what he intended or not, it sounds as if he’s implying that he’s doing the Cardinals a favor by managing the team and if his real estate goals didn’t go bust, he’d have left baseball in the rear view mirror on his way to becoming a real estate titan.

There are a number of ways for this to go and a lot of the “if then, then that” can lead to a dark place for the Cardinals. It might wind up amounting to a personal financial situation that’s being handled legally, but ends up permeating the job he’s trying to do now, festering negatively, and turning in a direction that few will be willing to openly discuss, but is there nonetheless and isn’t going to go away.

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The Pujols Departure Makes Like Easier for Matheny

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No manager—especially one who’s brand new and has never done it before—wants to have to come to an agreement on the clubhouse power structure upon walking in the door.

Mike Matheny, whom Albert Pujols was said to like and respect when the two were teammates with the Cardinals, was going to be in just such a situation taking over for Tony LaRussa as the Cardinals new manager. Pujols was said to prefer Jose Oquendo as the new manager. Undoubtedly that will be referenced as part of the list of reasons why Pujols left; this is twisting the issue away from what really was the motivating factor—money—into something other.

If the Cardinals had given Pujols a similar contract as what the Angels gave him, he would’ve stayed. They didn’t and he didn’t.

Already we’re hearing whispers from the netherworld of rumor and innuendo that may or may not be accurate.

“I thought Albert didn’t seem happy.”

“There was something off.”

Blah, blah, blah.

This is just the beginning as an explanation is sought.

Here’s the answer: the Angels paid him a lot more money than the Cardinals were going to.

Period.

This affects Matheny because he doesn’t have to cater to anyone in that clubhouse; that’s immensely valuable to a new manager. The only player on the current Cardinals roster that he played with as a teammate is Chris Carpenter.

That’s not a small thing.

Joe Girardi walked into a similar situation with the Yankees when he took over for Joe Torre, was managing a large segment of contemporaries and former teammates. What made it worse was dealing with a bunch of bratty superstars who’d grown accustomed to Torre and the known rift between Girardi and Jorge Posada that was never adequately repaired.

Matheny has a clean slate.

It’s doubtful any of the remaining stars—Matt Holliday, Lance Berkman, Carpenter, Adam Wainwright, Yadier Molina—are going to give him a problem; nor do they have the cachet that Pujols had to try and exert their will over a rookie manager. Pujols isn’t the type to bully and take over the room as a Josh Beckett would, but that doesn’t mean he’d be a perfectly good soldier if the two disagreed about something, anything.

Is it easier to run a team on the field without a weapon like Pujols? Of course not. The Cardinals just lost the best player of this generation and one of the best players ever, but to think they can’t function without him is absurd; the Cardinals will absolutely be better off in the long run without that gigantic contract for a player reaching his mid-to-late-30s clogging up their payroll. That they wouldn’t have the DH position to stash him when he can’t play the field anymore and the contract and his stature would make him untradeable would make the situation exponentially worse.

Right now it’s remarkably simple for them: they move Berkman to first base and find a right fielder. They’ll have a ton of cash left over to keep Wainwright and Molina and possibly lock up David Freese through his arbitration years and have the foundation for a good team without that one Hall of Famer stalking the middle of the lineup and paying him $25 million a year during his inevitable decline.

The Cardinals didn’t want to lose Pujols, but the fallout will be muted by the World Series they just won and that they’re going to acquire a name player to fill the gaping hole in the lineup.

There are outfielders available and Carlos Beltran on a 3-year contract is a perfect addition; the offense won’t be diminished all that much and with Wainwright returning, the pitching will be the strength of the team.

Much like the Stephen Strasburg injury where, I’m convinced, there were numerous people within the Nationals organization who were somewhat relieved that he got hurt and there was no one to hold accountable for it, there will be people with the Cardinals who aren’t all that bothered to see Pujols go. They’ll never admit it publicly, but it’s the truth.There was going to be a transition from LaRussa to Matheny and now it’s made much easier without Pujols to run interference on what the new manager wants to do.

The Cardinals will survive.

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