Brand tarnished, Cardinals likely to avoid economic damage

ST. LOUIS -- The St. Louis Cardinals have been the toast of their Midwestern city for generations, a source of civic pride as one of baseball's most successful and cherished franchises.

Suddenly, they're in an embarassing situation, under federal investigation for allegedly hacking into the computer database of an opponent, the Houston Astros, whose general manager, Jeff Luhnow, is a former Cardinals executive.

Cardinals owner Bill DeWitt Jr. and general manager John Mozeliak have gone on the offensive since the story broke, twice meeting directly with reporters to say they were unaware of any wrongdoing and pledging full cooperation with the investigation.

"We don't want the brand of the St. Louis Cardinals tarnished for something like this," Mozeliak told reporters.

Experts said the brand has certainly been damaged -- just how much is yet to be determined. But they also agree that the bottom line of one of baseball's most profitable teams should be largely unaffected.

"If you look at the different sources of revenue, what's going to be impacted?" asked Patrick Rishe, director of the Sports Business Program at Washington University in St. Louis. "Fans are not going to stop coming. Is their local media revenue going to go down? That's highly unlikely. I don't see this having any effect on the team's revenue-generating ability."

Still, a team that has been among baseball's most consistent winners, held up as a model franchise, has become the butt of social media jokes, especially among fans of rival teams weary of talk about the "Cardinals Way" and their legions of confident red-clad fans.

"The internet has been waiting forever for an officially legitimate reason to hate the Cardinals. What a time to be alive!" one man wrote on Twitter.

Beyond the smarm, there's a lot at stake.

The Cardinals have drawn more than 3 million fans every year since 2002. Forbes estimates the value of the Cardinals at $1.4 billion, sixth highest in all of baseball behind five big-market teams -- the New York Yankees, Los Angeles Dodgers, Boston Red Sox, San Francisco Giants and Chicago Cubs. Their operating income last year, $73.6 million according to Forbes, was tops. The alleged victim, the Astros, ranked 26th among the 30 teams with an estimated value of $800 million, and their operating income was $21.6 million last year.

So far, there is no financial fallout for the Cardinals.

Geoffrey Goldman, spokesman for Fox Sports Midwest, said interest in the Cardinals "is as strong as ever, among viewers and sponsors." Fox Sports Midwest televises the vast majority of Cardinals games and viewership is up 25 percent so far this year for the team with the best record in baseball.

The long-term ramifications of the scandal won't be known until the investigation is complete. The Cardinals say no top executives will be found at fault and DeWitt has suggested "rogue" employees might be to blame. Also unclear is whether the effort was to gain a competitive advantage, or simple mischief.

Some critics aren't waiting, comparing the scandal to the Chicago White Sox throwing the 1919 World Series or the deflation of footballs used by the New England Patriots during the AFC championship game.

"This will certainly tarnish the brand, but the brand's pretty darn strong," said Keith Murnighan, who teaches crisis management at Northwestern University's Kellogg School of Management.

Reputation expert Daniel Diermeier, dean of the Harris School of Public Policy at the University of Chicago, said sports fans are generally forgiving of their team's misdeeds. He wasn't surprised that Cardinals fans are coming to the defense of the team, much like Patriots fans did after deflategate.

"This rallying-around effect you see here, this is very common when you look at sports teams for the local fan base," Diermeier said.

Regaining the respect of baseball fans beyond Cardinals Nation will be trickier. Diermeier said the Cardinals will have to prove that they have evaluated the organization with an eye toward fixing any problems, and show that they can create an environment "that makes playing by the rules the standard operating procedure within the franchise."

For many, whatever they do won't be good enough, Murnighan said.

"People who don't like the Cardinals are going to like them even less," he said.