**SIGH** Since no one else posted this...

[Tiger Wench]

I don't even have words for this beside FUCK YOU, Crane.

2013 Houston Astros: Baseball's Worst Team Is The Most Profitable In History

Almost no one in the Houston Astros organization is making big league money. The highest-paid player is pitcher Erik Bedard, who is playing on a one-year, $1.15 million contract. No one else is pulling in over $1 million a year. That is, no one besides Jim Crane, who owns the worst team in the majors and is quietly making more money than any baseball owner in history.

The Astros are on pace to rake in an estimated $99 million in operating income (earnings before interest, taxes, depreciation and amortization) this season. That is nearly as much as the estimated operating income of the previous six World Series championship teams — combined.

Yet the Astros are 43-86, worst in the majors. Of the 270 Major League Baseball teams who have taken the field since 2005, none have finished with a worse winning percentage than Houston’s.

They have become so profitable thanks to slashed payroll expenses and soaring television revenues.

Since becoming the Astros’ owner in 2011, Crane has gutted the team of its most expensive players while building up the farm system. Over the course of this season, the team will pay its players an estimated $21 million in salary and bonuses. That is down $56 million from 2011, when Crane bought the team.

The Astros opened this season with a league-low $26 million active payroll and have since cut it to under $13 million, according to the Houston Chronicle. Houston traded or released four of its five players making over $1 million.

The Astros did not respond to repeated requests to discuss the team’s finances and rebuilding strategy.

But Crane told ESPN The Magazine, “Once our minor league system is filled in, we’ll move up into the top five or 10 in payroll.”   

Other teams have said the same thing, only to keep payroll low year after year. But the Astros might actually mean it. Crane doesn’t appear to be gouging fans for profit. Since becoming the owner, he has introduced fan-friendly policies like allowing food and drinks into the ballpark.   

But he will likely use some of the cash flow to pay down the reported $275 million debt he took on when buying the team. He financed the purchase with a $220 million loan from Bank of America and assumed $55 million of debt from a previous loan with Major League Baseball, according to the Sports Business Journal.

If the Astros were to use their current gains to pay for future players, $99 million could make a huge difference. The Astros could have taken on the contracts of the entire starting lineup for the National League all-star team this year for just $84 million.

Sixty-four major leaguers make more individually than the Astros’ current 25-man active payroll makes collectively. The New York Yankees pay nine players more than the Astros payroll. Twenty other teams pay at least one player more. And Jason Bay, who is not even on a team, earns more than the all of the Astros, thanks to an old contract with the New York Mets.   

Crane has dropped payroll despite raking in revenue from one of the biggest television deals in all of baseball. 

The regional sports network Comcast SportsNet Houston pays the Astros $80 million a year to show their games — about $50 million more than the Astros got under their previous deal.

The massive boost in revenue means that the Astros have plenty of spare money. They could pay for their current payroll six times over with money from their local television deal alone. And they bring in nearly $40 million from other television and radio deals.   

In an age when DVR and Netflix allow people to watch TV without commercials, live sports remain one of the few types of programming that advertisers consider DVR-proof. No one wants to miss a play, and everyone has to see it live — and is therefore stuck with the commercials too. Just 19% of television households owned DVR in 2008, but 44% do today, according to Nielsen. Sports programming has never been so valuable.

Owners like Crane are getting in on the action.

The Astros own 45% of CSN Houston, the Rockets own 33%, and NBC Universal owns the rest. It is becoming increasingly common for sports teams to take equity stakes in the networks who buy their rights.

“Sports rights are escalating astronomically, so ideally, on a team you want to be benefiting from anybody who is in there trying to take a piece of margin out of it,” said Derek Baine, an analyst at SNL Kagan who covers sports media. “It’s a way you can generate big fees while still capturing some of the upside if they ever get sold. Because when they get sold, they go for pretty big valuation also.”

But CSN Houston has run into problems. Since launching last fall, the network has had trouble signing deals with local satellite and cable providers who do not want to pay their pricey rate per subscriber — $3.03, 38 cents above the average for regional sports networks, according to SNL Kagan. CSN Houston is shown in just 40% of the TV households in Houston, according to the Houston Chronicle. As a result, the network lost $63 million last year, according to SNL Kagan, which analyzes the business of television.

As the largest stakeholder in CSN Houston, the Astros absorbed the brunt of those losses. FORBES considers regional sports networks separate businesses and does not include their losses or gains in its operating income estimations. But even if the Astros’ roughly $23 million loss were included, they would still have an estimated operating income of $71 million, higher than any team in history.

From Crane’s perspective, it does not much matter whether the revenue is coming from the Astros proper or from the regional sports network partially owned by the Astros. And fortunately for Crane, CSN Houston should make more money as basketball season nears. With Dwight Howard in town, ratings for Rockets games will likely soar. TV providers may be more likely to sign on with CSN Houston once Rockets games start. If that happens, both the Rockets and the Astros will cash in.

As teams take stakes in regional sports networks, owners now have a new formula for making teams profitable. No longer can they rake in huge gains by filling stadiums with as many people as possible and keeping player payrolls low — regardless of wins and losses. Now on-field performance, and the buzz it creates in town, make TV ratings soar or plummet — and owners’ profits go with them.

“That’s the bottom line here is that the operators who haven’t carried CSN Houston yet think it’s overpriced given how the teams are performing,” Baine said. “If they did better, then they would probably be more likely to be picked up by DirecTV and others, so that would definitely help.”

That is good news for Astros fans. Although Crane is making money off of the old formula now, he could make even more if he ups payroll and fields a team good enough to draw fans back to the ballpark — and more importantly, back to their television sets.

And of course, Crane and the Disasstros fire back:  NUH UH!!  We ain't making money!  You take that back!!

Jim Crane has said he would spend money on the Astros when the time is right, but it sure looks like he has the money to spend now.
 
Forbes magazine reports the Astros, who have the worst record in the major leagues, are on track to make $99 million in operating income this season, more than the last eight World Series champions combined.
 
The Astros did not respond to Forbes’ request to discuss the team’s finances but team president Reid Ryan took issue with the numbers.
 
While not offering a figure to counter the report, Ryan said,  “We’re going to have expenses that are higher than our revenues, and that doesn’t make (the team) profitable.”

He added, “There is no doubt that the numbers are wrong in the Forbes article. If they were right, I’d look like the guy who had done the best job in three months ever (since taking the job in May). The fact is that the numbers are wrong.”
 
The formula, according to Forbes was simple, and has been well reported.  Forbes does give Crane credit for not gouging fans by introducing fan-friendly policies at Minute Maid.
 
The report speculates that Crane could use the money to pay down $275 million of debt he used to acquire the team in 2011.
 
Forbes does not count the Astros’ profits (or losses this year) in its 45 percent stake in CSN Houston but notes:  As the largest stakeholder in CSN Houston, the Astros absorbed the brunt of those losses.
 
Crane was not available for comment Monday. However, several hours after Ryan’s comments, the team issued a statement that it was “disappointed” by the “significant inaccuracies” in the Forbes.com story but would not disclose information on the Astros’ finances:
 

As MLB will confirm, the information reported in the Forbes article relating to the Astros’ revenues, the Astros’ media rights fee from CSN Houston, and CSN Houston’s per subscriber rate are all significantly inaccurate. As a result, the conclusion about the Astros’ operational profit is significantly inaccurate.
 
The Astros will continue to operate the team in a fiscally responsible manner   that will make the City of Houston proud. We are very excited about our accomplishments and we remain steadfast in our commitment to this rebuilding process  . We have established a basis of young talent on our MLB roster   that will continue to improve. And our minor league system is now one of the best in MLB.    As our young prospects develop, we will move them up to the Major League roster and increase our payroll to a level that will allow the Astros to compete for World Championships. 

MLB spokesman Patrick Courtney said, “We concur with the Astros’ statement.”

FML.   

[Snaggletiger]

tl;dr but got enough out of it to know that MLB should not allow him to own a franchise.  If you refuse to pay the players, much less even try to put a competitive product on the field, all the while making tons of $$$...you deserve to have it taken away from you.  It seems that pro sports in general have implemented numerous rules to bring about parity among the teams. The NFL is a prime example as "dynasties" are a thing of the past with all the free agency rules and salary cap restrictions.  But to allow this is reedonkulus.  Houston, or any town for that matter, deserves better.     

[Buzz Killington]

With Theo doing the same in Chicago, we should expect to see a Cubs/Astros matchup in the WS by 2015 3000

[GH2001]

Is the point of fielding a team to win games or to make a profit?

[Buzz Killington]

Is the point of fielding a team to win games or to make a profit?

yes

[dallaswareagle]

With Theo doing the same in Chicago, we should expect to see a Cubs/Astros/Marlins matchup in the WS by 2015 3000

Adjusted it.

[Tiger Wench]

tl;dr but got enough out of it to know that MLB should not allow him to own a franchise.  If you refuse to pay the players, much less even try to put a competitive product on the field, all the while making tons of $$$...you deserve to have it taken away from you.  It seems that pro sports in general have implemented numerous rules to bring about parity among the teams. The NFL is a prime example as "dynasties" are a thing of the past with all the free agency rules and salary cap restrictions.  But to allow this is reedonkulus.  Houston, or any town for that matter, deserves better.   

Sorry, I know - Forbes is definitely long winded.  That's why I highlighted the relevant parts.  The big take away was that Crane claims he is banking the bucks while he stocks the farm league pond with little baby fish making shit for pay.  Then, see, he will invest in the payroll when those little shiners grow up to be big mac daddy catfish.  Get it?  Get it?  Long term investment in the future, ya see?  Planning ahead, get it?  Never mind the shitty product on the field for oh, say, the next fucking decade.  We gonna make it back to the top, baby.  Just hang in there and keep paying me to let you watch the absolutely fucking hideous product I am fielding now, and one day you'll thank me. 

And don't forget to buy your brand new jersey in the godawful nasty color scheme so you will be wearing the latest in team apparel!!

Jim Crane can take his $100 MILLION FUCKING DOLLARS and his fucking awful baseball team in their fucking horrific uniforms and their fucking cheapskate payroll and their shitty management staff and their bad news bears goat farm league, and, to quote the illustrious and definitely infamous Uncle Sani - they can all go take a flying fuck at a rolling doughnut. 

I'M OUT, MOTHERFUCKER.

GO RANGERS!!!!!!!!!!!!!!!!!

[AUJarhead]

Wench, I bet you look good in Cardinal Red.

[CCTAU]

Uh. MONEYBALL BABY!

[Tiger Wench]

Wench, I bet you look good in Cardinal Red.

Fuck you. I will not root for the Deadbirds (unless they play the Yankees and thenit is more of a "meh") and I NEVER wear red.  Ever.  EVER.  Not for any reason.  And neither should you.  Traitor.

Our school district colors are red and black.  Don't care.  I have a Go Cougars! tshirt in black.  (Yes, the irony does not escape me...) 

[AUJarhead]

Fuck you. I will not root for the Deadbirds (unless they play the Yankees and thenit is more of a "meh") and I NEVER wear red.  Ever.  EVER.  Not for any reason.  And neither should you.  Traitor.

Our school district colors are red and black.  Don't care.  I have a Go Cougars! tshirt in black.  (Yes, the irony does not escape me...)

Red <> Crimson

[Buzz Killington]

Fuck you. I will not root for the Deadbirds (unless they play the Yankees and thenit is more of a "meh") and I NEVER wear red.  Ever.  EVER.  Not for any reason.  And neither should you.  Traitor.

Our school district colors are red and black.  Don't care.  I have a Go Cougars! tshirt in black.  (Yes, the irony does not escape me...)

I heart you soooooo much!

[Tiger Wench]

Red <> Crimson

Semantics, you Deadbird motherfucker.

Per teh innerwebs:

Crimson is a strong, bright, deep red color. It originally meant the color of the Kermes dye produced from a scale insect, Kermes vermilio, but the name is now also used as a generic term for slightly reddish-blue colors that are between red and rose; besides crimson itself, these colors include carmine, raspberry, ruddy, ruby, amaranth, cardinal, and cerise.

BOO.  YAH.

[AUJarhead]

I don't see the Astros with an Auburn guy's number hanging up in the stadium.

So fuck you.

[Tiger Wench]

I don't see the Astros with an Auburn guy's number hanging up in the stadium.

And this is supposed to disappoint me?  I'M GRATEFUL FOR THIS.

[AUTiger1]

The O's could always use another fan to bitch about Angelos.  Just sayin'.

[Tiger Wench]

The O's could always use another fan to bitch about Angelos.  Just sayin'.

Even I'm not THAT desperate.

[AUTiger1]

Even I'm not THAT desperate.

Says the Astros fan........

[Tiger Wench]

Says the Astros fan........

Kind of my point.  Even an Astros fan is not that desperate.

It's just not funny if you have to explain it. 

[GH2001]

I heart you soooooo much!

I seen it first!!