added 8/31/2013 by Bob Hulsey
If you follow the Astros (and who could blame you if you don't), you've probably heard and possibly read the Forbes.com article by Dan Alexander accusing (if that's the right word) the 2013 Astros of being the most profitable team in big league history - more than the last six Worlds Champions combined.
The Astros' front office and ownership leapt to deny the claim while Forbes.com ran two columns (one by legendary Jim Crane hatchet man Maury Brown and the other by Alexander himself) claiming the conclusion, if not the numbers, were incorrect.
As Saturday Night Live's Emily Litella used to say after her editorial response about presidential erections, "Never mind".
The charge was laughable on its face despite the Astros shrinking their payroll to a slave-wagish $13 million. Their attendance is the worst of any big league club not located in Florida and their sports channel can't get on any carrier that counts besides their own so how could they be making money period, much less the most of all time?
If you're Alexander, you count the projected money earned by the regional channel ($80 million) without factoring in the 46% ownership of the channel by the Astros and then add in the 1/30th of national rights and licensing fees all MLB clubs make and subtract player salaries but nothing more. Got it? And this from an alleged financial publication.
The key word in that last sentence was "projected". Overlooking that word was the first and most glaring mistake. The figure is what is the estimated annual revenue for the life of the contract but that figure was made on the assumption that the Astros could name their price while being added to carriers like DirectTV, Dish, U-Verse, Time Warner, et al which they have failed to do. If it happens at all, it seems it will now come at a discount to the carriers who refused to bite on the price Comcast and the Astros wanted. My guess is that many of the ad sponsors are also cancelling or demanding make-goods which will cost Comcast still more.
Television rights fees are the 800-pound gorilla of the modern major league baseball team's income and the Astros are probably making less than anyone. At least the Miami Marlins waited until the taxpayers had built them a new stadium and the ink had dried on all the carriage deals before they went for a salary dump (If one can even compare Miami's $50 million payroll to Houston's $13 million). The Astros dumped first and then wondered why nobody wanted to buy their tv deal.
You could almost see the fist pumping on Texas and Crawford when Forbes began walking back Alexander's story. The Astros weren't greedy profiteers after all! Still, it makes you wonder just who is running the show over there and what type of business sense they have to let it get this bad. They not only celebrate 100-loss seasons, they seem thrilled to learn they aren't making any money either.
Whatever profits the Astros are making are likely being sunk into retiring the estimated $250-$300 million debt Crane and his partners leveraged to overpay for the ballclub and its accessories back in 2011. It's the right thing to do and I applaud them for doing so. Even if they made the $99 million Alexander claims, they would be satisfying anxious creditors with it, not lining their own pockets.
Right now, Crane and GM Jeff Luhnow have succeeded in turning the old "wait until next year" mantra into "wait until the year after next year or maybe the year after that". They seem dedicated to becoming the Dollar Tree of baseball franchises (psst - there's a marketing tie-in worth considering).
The one remaining player making over $1 million (Erik Bedard at 1.15 million), languishes in the bullpen with a 3-10 record. Next to him in the bullpen is Philip Humber (0-8) who is the only other player on the roster aged 30 or above.
Their last two player transactions - trading away relievers Wesley Wright and Travis Blackley - were in exchange for "cash considerations", not minor league players. That's a clear sign the Astros don't think they have enough revenue.
As if to blunt criticism that they are cheap, the front office recently gave a multi-year extension to Jose Altuve, the Littlest Astro. The cynic in me sees this less as a reward for Mighty Mouse (who has been in a noticeable hitting slump ever since) but a ready excuse for when fans ask why the Astros don't pursue Robinson Cano in free agency this winter.
Minimum wage players playing minimum results baseball while the organization crows about the success of their minor leaguers. That's not a very compelling sales pitch to Joe Fan, nor to cable and satellite providers.
Once the players on the farm begin to blossom in Houston, we will find out how well this grand plan has worked or whether it was a ruse to string along fans until the debtors have been paid. Will the Astros invest again in the parent club or will they feed their fans more excuses? We'll know when the next true Astros star tests free agency.