Wednesday, March 23, 2011

What does the Astros valuation mean for the impending sale?

Short answer: Not a whole lot.

Longer answer: It doesn't matter what Forbes says the Astros are worth. It doesn't matter what price tag the Financial Experts place on the Astros. What matters is what one person/faceless conglomeration wants to pay to get into baseball. So Ken Williams thinks it's asinine to pay Albert Pujols $30m/year. All Albert needs is for one GM to think it's the greatest idea since putting a flagpole in center field.

Back in November it was rumored that Drayton was asking around $800 million for the franchise. So when Forbes said earlier today that the Astros were valued at $474m (a 4.6% increase over 2010), it likely made a lot of potential investors laugh even more at Drayton's asking price.

The Texas Rangers, according to Forbes, are worth $561 million - but sold for $590 million.

So if the investment group for the Rangers is willing to overpay (though if you're spending $561 million, what's another $29m?), who's to say that the future owner(s) won't do the same? That said, I find it quite hard to believe that anyone would be willing to pay $326m OVER Forbes' valuation.

The Astros operating income is put at $14.4m, or 18th in MLB, and the Astros rank 21st in television rankings (not counting the new network to come). Is this a team worth $800 million?

This reminds me of a buddy who has an old Corvette in pretty good/not great shape. His wife wanted him to get rid of it, so he put it in the driveway with a For Sale sign. When people called to ask about it, he said he was selling it for $70,000. Of course, he still has his car, but he's going through the motions. Kind of like the Astros. But all it takes is one Tom Hicks...

No comments: