Is Houston Astros Owner Jim Crane Selling Fans A Pipe Dream?
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Houston (CBS HOUSTON): “I heard a lot of comments about the payroll, the payroll, the payroll. We’ll spend the money when we’re ready to spend the money.”
Those are the words of Astros owner Jim Crane back in March 2013. Crane essentially asked fans to please be patient while his GM Jeff Luhnow remodels this franchise to be what he hopes will be a perennial contender, albeit on a shoestring budget.
Crane promises a brighter future ahead, however, one filled with star homegrown players and key free agents added in to be a winning team with a payroll reflecting the fact that Houston is the fourth largest city in America.
But after the Astros dropped 111 games this past season, their third straight with greater than 100 losses and third straight having the worst record in baseball, it wouldn’t be unfair to question exactly when, or if, this promised turnaround may come.
This isn’t necessarily about the ugliness that is the CSN Houston Bankruptcy case, although that case is getting uglier by the second. It’s not about the fact Crane himself has been the party blocking all the potential CSN Houston deals (and preventing the city from watching the Rockets), nor that irony that he’s been given the duty of working out a new deal for the network by the courts. It’s not about Crane, who portrays himself as one slick businessman, claiming he was hoodwinked by former Astros owner Drayton McLane (as well as the boys at Comcast and NBC Universal), whom he is now suing in court. It’s not even about his plethora of public relations nightmares last season that occurred essentially every time he spoke.
This is about Crane’s own words, his own vision, of the direction of the team, and its feasibility.
Specifically, it’s about two ideas he spoke about last week regarding his franchise.
1) Crane’s assertion he wants “a model like the Cardinals and Braves.
2) Crane’s statement that a TV deal would put them in the “medium income family”
These two statements are troubling, to say the least.
Crane wants to build models for his franchise, located in the 4th biggest city in the country, to that of Atlanta (40th) and St. Louis (58th).
On its face, it’s not such a terrible idea. Those teams have been consistently good for years and have fewer resources than the Astros would have.
However, St. Louis has had only 1 losing season this millennium, and hasn’t lost 100 games in over a century. The Braves have had 1 losing season since 1991, and only lost 100 games 2x since 1936. The Astros have been the worst team in baseball 3 years running. Neither of the other franchises has ever had to dive to the depths the Astros have.
So perhaps it stands to reason that shifting to their methodology of operation should be a positive for a team that can surely outgenerate Atlanta and St. Louis in revenue. If the Astros can develop that operation and use their superior earning power to augment their team, they really could be a consistent contender.
That’s what Crane would like you to think, at least.
The idea the Cardinals and Braves have a good amount of homegrown talent is true, but the idea their entire teams are homegrown young players certainly isn’t.
The Cardinals payroll to start the 2013 season was $117M. Good enough to be baseball’s 11th highest. The Braves payroll was $90M. 18th in MLB but right near the median payroll level. The Astros were a league low $24M, cut further down by player moves made during the year to the $14M range.
A team in the 4th biggest city is acting like a small market team, and wants to act like a mid market team. How can it step up to become a mid market team? With a new TV deal of course!
The Astros deal with CSN Houston was (I say was since CSN didnt pay Crane all his money, according to the bankruptcy case, due to carriage issues) to pay the team an average of about $80M per year for 20 years. According to Mike Ozanian of Forbes.com, that’s more than 3x what the team received from Fox Sports Southwest in 2012.
To break that backwards, that means the team was paid somewhere between $20-26M in rights fees in 2012 from FSS.
Now, before you say what a slovenly pittance that $20-26M is, keep in mind the Astros had a payroll north of $90M from 2006-2010, and were either within $5M or over the average league payroll every year from 2000-2010 (except 2001). They were able to afford such a payroll with a TV deal that only – ONLY – paid between $20-26M.
Clearly the Cardinals and the Braves get way more than that from their TV deals, right? Wrong.
The Cardinals, per a report from Derrick Goold of the St. Louis Post-Dispatch, are in a long term deal with Fox Sports Midwest that will run through 2017. The deal pays the team between $25-28M, with escalator clauses that can run the tag as high as $30M per year.
The Cardinals believe their payroll should be tied to ticket sales, not TV money.
“For us to stay a top-tier team we need to be in line to have really strong attendance, which we have been able to do,” Cardinals Chairman Bill DeWitt told Goold in December 2012. “ We’re never going to be a top TV-revenue team, that’s for sure. In our view, the goal is every year to get three million people and have a shot at the playoffs, a legitimate shot. If you have a legitimate shot at the playoffs, we’ll draw three million people.”
The Cardinals floated a $117M payroll last season (11th highest in MLB and $11M higher than the MLB average payroll) on a TV deal no greater, essentially, than what the Astros used to get from Fox Sports Southwest.
The Braves may have the worst TV in baseball. Almost inconceivable considering how they were once owned by a man who also owned the biggest Superstation in the country, Ted Turner and TBS.
The Braves are going on 7 years into a 20 year TV deal that actually puts the team at a disadvantage, according to a report from David O’Brien of the Atlanta Journal-Constitution. The Braves get less than $20M annually, with some putting the true number closer to $10M. According to O’Brien, that would be among the lowest in all of baseball.
The Braves payroll at the start of the 2013 was $90M, 18th in MLB and $16M below the MLB average (although only 10M below the 2012 average, as 2013’s numbers are inflated by the Yankees and Dodgers)
So how can the Cardinals fund $117M and the Braves fund $90M on TV deals that pay them under $30M and $20M, respectively, but the Astros need $80M to be a “medium income family”?
How did Drayton McLane have $90-100M payrolls with a TV deal under $30M that Crane considered to be untenable?
Crane has maintained that without the TV deal, the Astros cannot be a competitive franchise. Last week, the TV deal ($80M annually) would make them a ‘medium income family”. Essentially saying, without CSN Houston getting picked up, the Astros are a small market team, in the 4th biggest city in the country.
After a dismal 2013 campaign, he seems to have accepted that fans will not come to the park to support a team that blatantly has no attempt of even competing, as evidenced by the their woeful attendance of 1.6M (tickets sold, of course). For 2014, the team intends to increase its payroll by up to $30M, which would put it between $40-50M for the season. Sounds great, and it is for fans to see a more competitive team, but its still under what the bare bones Tampa Bay Rays payroll will be.
Clearly, the numbers don’t belie Crane’s assertions of how he wants to be like the Cardinals and Braves, two franchises in far smaller markets with far less revenue who are competitive annually for more than just their farm systems.
Does this mean Crane won’t deliver on his promises to push this team’s payroll towards the top of the league when they have a chance to win a championship in the future? Not at all. The jury is clearly out on that. Crane has a few more years to make good on his promises. That being said, so far it doesn’t look good for Astros fans.
Crane is still asking his team’s fans to trust him, but so far I don’t think he’s earned it. At this point, it’s more like hope. I hope he proves me wrong, but I’m not betting on it.
Patrick Creighton is the host of “Nate & Creight” with Nate Griffin, Sundays 2-5p on Sportsradio 610. Follow him on Twitter: @pcreighton1