Chairman and CEO changed focus from acquiring players to Draft, farm system in '03
ST. LOUIS -- The task was ambitious, the timing perhaps unorthodox to those who were too shortsighted to see beyond the success.
It was 2003, the lone year within a seven-year window that the St. Louis Cardinals did not advance to the postseason. The team had won an average of 95 games the previous three seasons and saw a number of organizational prospects -- including J.D. Drew, Matt Morris, Rick Ankiel and Albert Pujols -- begin to bloom.
But that success was also very much built through trade acquisitions like Mark McGwire, Jim Edmonds, Darryl Kile, Dave Veres, Scott Rolen and Woody Williams. The Cardinals were bold in seeking outside talent to complement what was being developed in the system. It was a practice, though, that for varying reasons would not thrive in the long term.
Chairman and CEO Bill DeWitt Jr., who headed a group of investors that purchased the team from Anheuser-Busch for $150 million in 1996, believed it to be a flawed and unsustainable model. The Cards were on a path to depleting their farm system, which, with the free-agent prices swelling, would make it tough for a mid-market organization to remain a perennial contender.
His business background and baseball savvy convinced DeWitt that change was imperative.
"Bill was certainly a visionary," said John Mozeliak, who ascended from assistant general manager to GM as DeWitt initiated transformation. "He understood where the industry was going and, more importantly, where the company needed to go to remain competitive."
What the Cardinals are now is a byproduct of the makeover DeWitt began then. Baseball folks regularly point to the Cards as a model organization, an example of how development can trump dollars, how a mid-market team can overcome the financial disparity still present in a sport with no salary cap.
"For the Cardinals, it has proven to be a great model," DeWitt said on Friday. "It's pretty exciting to see the dynamic of this  team, because it's what we tried to accomplish. A lot of things have to go your way to be in this position. I think we have really had a good plan and great people, both at the Major League and Minor League level and in scouting and in player development."
Changing the blueprint
The work to mold the organization began a decade ago, when DeWitt was insistent on the need to invest in the First-Year Player Draft, retool their international approach and streamline the player development system. The key to long-term sustainability was to minimize the reliance on having to obtain talent from outside the organization.
DeWitt wasn't fundamentally against the organization's practices at the time. In fact, he had implemented that system. But its functionality had run its course.
Major League Baseball was fresh off a labor strike when DeWitt took ownership control. The Cardinals had missed the playoffs for eight straight seasons. Attendance was waning. Among DeWitt's first tasks was to re-energize the fan base, something he believed could only be done by fielding a winner.
DeWitt wanted to reverse the organization's trajectory ASAP, and he believed the most effective way to do that was in buying proven talent. Payroll jumped significantly as the Cards were opportunistic in acquiring players from teams that wanted to shed financial obligations or by taking on players nearing free agency.
"We thought if we kept having good clubs, that our fans would respond and it would get back to where it was in the '80s," DeWitt said. "Fortunately that strategy worked well and we had some good teams in that time frame through the world championship year in 2006."
Around '03, however, DeWitt began to evolve in his thinking. The model that had brought the organization back into prominence was not going to keep it there if it remained as it was. He made what at the time seemed a far-reaching hire in bringing Jeff Luhnow in as vice president for baseball development. Luhnow had no baseball background, but he did hold an accomplished resume in the technology and software sector.
Among DeWitt's first actions was to shut down the Cardinals' international operation. Mozeliak remembers that initiative as a "deep breath, a time out." The Cards had not been smart in their allocation of international dollars, and their academy in the Dominican Republic was falling apart. In a market where players are essentially wooed and recruited, the facility did nothing to attract.
Luhnow, now the Astros' GM, was sent to the Dominican Republic to single out which organizations had the best business practices. That research turned into planning, and the Cardinals opened a new Latin American academy in '05.
"We had to be more aggressive internationally," DeWitt said. "Since then, players like Carlos Martinez have come out of that process. Oscar Taveras, too."
Changes were made in the amateur scouting and drafting process, too, though they were not as drastic. Under DeWitt, the Cards had always been aggressive in procuring top talent in the Draft. Signing bonus demands did not scare the organization away from selecting Drew with their first-round pick in 1998. Drew eventually agreed to a $7 million signing bonus.
A year earlier, Ankiel, a second-round pick, signed for a $2.5 million bonus. At the time, it was the fifth-highest bonus ever given to an amateur player.
In particular, though, DeWitt believed two changes were necessary in order to maximize St. Louis' Draft strategy. One, he wanted to merge traditional scouting with analytics. That had an effect on how players lined up on the Draft board.
"I think when you think about the decision-making tree," Mozeliak said, "that evolved quite a bit from merely gut-feel-type picks."
Second, the Cardinals believed in the value of increasing their volume of picks. One way they did so was in becoming more aggressive in offering arbitration to departing free agents. That secured compensation-round Draft selections. And, of course, the more picks procured, the more opportunity there was for homegrown talent to emerge.
"Our Minor League system was suffering during that time, and I knew it myself, but third parties knew it as well just based on rankings," DeWitt said. "We were ranked 25th-30th for a number of years in a row. I knew that [the success in the Majors] wasn't going to last forever and that we needed to refocus on the Minor League system and the Draft."
With an emphasis on acquiring talent, the Cards then had to ensure that the player development system was built to maximize the return. Some personnel changes were needed in order to ensure a continuity of message and instruction up the Minor League ladder.
The organization also adopted some more modern strategies. Programs were tailored for player needs. Nutrition was emphasized. Strength training became widespread.
"I think our system was strong beforehand," Mozeliak said, "but I think it got stronger."
Conflict and resolution
As with change in any business model, DeWitt faced resistance and internal conflict in the early years of implementation. Then-GM Walt Jocketty was not as quick to accept the increasing dependence on analytics. Even more so, there was a perception that he felt threatened by Luhnow's rise.
Members of the baseball operations department took sides. One recently described the dynamic as "like the Democratic Party and the Republican Party. It just wasn't coexisting."
Jocketty was dismissed after the 2007 season, and DeWitt made Mozeliak the interim GM while he conducted a search for Jocketty's replacement. During that time, Mozeliak caught DeWitt's eye. While there was speculation that Mozeliak was not DeWitt's top choice initially, he proved the right man to unify.
"He did a really good job in making an effort to get everyone on the same page," DeWitt said. "It didn't happen overnight. It wasn't easy. But that was part of what led me to go with him."
Mozeliak was introduced as the franchise's 12th general manager nearly a month after Jocketty's departure. Under his leadership, the Cardinals have advanced to the postseason four times in six seasons and are three wins away from capturing their second World Series title.
"It was all about getting everyone to pull in the same direction," Mozeliak said. "As an owner, he can't do all of that. It was my responsibility to get people to accept the new message, to accept the new strategy, and fortunately, for me, we have a lot of quality people in our department that were receptive to it and really made it happen."
The execution has since been exceptional. Take the 2013 Cardinals, for example. Of the 25 players on the team's World Series roster, 20 reached the Majors through the Cards' farm system. That includes 17 draftees, one international signee (Martinez) and two players (Adam Wainwright and David Freese ) acquired in trades as Minor Leaguers.
Supplementing that homegrown group were two free-agent signings (Randy Choate, Carlos Beltran ) and three others who arrived via Major League trades (Matt Holliday, Edward Mujica, John Axford ).
"To their credit ... even in the glow of a couple of good runs, [they] made the changes that were not easy to make down through the system in terms of, you know, those key decision makers and those key staff folks that help us, not only in the player procurement area in terms of scouting and drafting, but in the player development area as you come in through the system," team president Bill DeWitt III said, speaking of Mozeliak and his father. "[We] needed to have every level of the organization all on the same page."
DeWitt now heads an organization that is the envy of many others, and his legacy will include all he did to revive the organization's reputation. Under his leadership, the Cardinals have advanced to the playoffs in 11 of 18 seasons. The organization has already raised two championship banners and now seeks to become the first team to capture a third since the turn of the century.
"You have to change your thinking as the dynamics of the industry change and see what's on the new frontier," DeWitt said. "It's not a static industry, and it really never has been. That's the great challenge of the future, to make sure we're aware of new ways of doing things and not content thinking we know it all."