Thursday, December 13, 2012

"The Astros don't have enough money..."

Here's your daily WTF from the rumor mill regarding the Astros.

Via SB Nation Chicago, we get this Danny Knobler tweet from yesterday afternoon, when I was boycotting Twitter because nobody could shut up about OMG121212.

Cubs also shopped Soriano to Astros as a possible DH, but Astros don't have enough money (even with Cubs contributing a lot). 

Let's think about this for a second. The SB Nation Chicago post mentions reports that the Cubs were willing to eat approximately $26m of the $36m currently owed Soriano (which Jon Heyman confirmed). If that report is accurate, it means that over the next two years, the Astros would be responsible for $5m per season to get Alfonso Soriano.

Barring some other deal, Jed Lowrie will be the highest-paid Astro in 2013...making around $2m, depending on arbitration. Wesley Wright and Bud Norris are also arbitration-eligible, but aren't exactly going to command Lincecum-style arbitration numbers. Baseball-Reference throws an educated guess at the combined salaries of Lowrie, Norris, and Wright at a combined $5.7m. Baseball-Reference also lists 25 players who will be making league-minimum.

Let's say - for math's sake - that Baseball-Reference is under by a few hundred thousand dollars, and those three will make right at $6m. Let's also just say the Astros aren't going to make any moves that would add players at more than $1m/year (since that's been their trend lately). The payroll would break down as such:

Three Arb-Eligibles: $6m
Philip Humber: $800K
21 players at League Minimum ($480K each): $10,080,000
Total payroll: $16,880,000

Even if the Astros get a hair in their pee-hole and sign Lance Berkman to a contract in the $5m range, that puts TOTAL PAYROLL at around $22m. Also, keep in mind that, if they don't sign Soriano or Berkman, the highest-paid player for the Astros in 2013 would be...the Pirates, who are receiving $5m of Wandy's 2013 salary.

Now, I dislike Alfonso Soriano as much as the next guy, but over the past three seasons, he posted an .801 OPS (113 OPS+), averaging 557 PAs in each season. The 2012 Astros didn't have anybody crack .800 in OPS. The closest to it was Matt Dominguez, who had a .787 OPS (111 OPS+), but did in 113 PAs.

I'm not saying that Soriano is the answer. If I'm hoping for things, first and foremost I'm hoping the report just isn't true. Should the report be true, I'm hoping that the Astros said they didn't have enough money to add Soriano because he's just not the type of player they're looking for, and felt like lying about it.

There are a few ways that I can see the Astros not having enough money for a $30m payroll:

1. The Astros are planning on tens of people in the stands every night in 2013.
2. They're not optimistic about CSN Houston reaching a deal with cable providers that people, you know, watch. On November 30, David Barron said 40% of the viewing area could get CSN Houston.If the new network doesn't make a deal with DirecTV, Dish Network, or AT&T Uverse, might that mean that the Astros would only get 40% of the $80m the Astros were to receive from CSN Houston (which would be $32m)?
3. I realize that Opening Day payroll is not the last line of expenses for a franchise's operations. The last-linked article in Item 2, the Astros are apparently going to invest $20m in the franchise next season. But we aren't taking into account any revenue-sharing.

There are a ton - LITERALLY 2000 POUNDS WORTH - of factors that we aren't considering. But given that payroll has fallen from $102m on Opening Day 2009, the Astros are either in financial trouble, or are unbending in their commitment to keep punting for field position until their prospects are ready.


OremLK said...

Every free agent added is an opportunity cost in that it robs a young player from his chance to show his stuff at the ML level. From the baseball perspective, it is strictly speaking the right move not to spend any money in free agency, especially if that money can be saved and re-invested later when the team is an actual contender. From the PR perspective, yes, it looks bad.

Anonymous said...

I totally agree with your comment. I think Lunhow looks at $ through the idea of production and value in the present. The only reason they would consider Berkman is because he does produce but even more, it means something to the fans in Houston. Soriano doesn't mean anything and they would rathar have prospects for Norris that will be good in 2 years when their other prospects that are really good begin to pour in.

On the Norris issue. It would be better to wait for the season to be 2 months in and Norris hopefully having a breakout year and then trade him. His value needs to be higher for a good return.

Anonymous said...

People say $80 million but is that somehow tax free? If the Astros receive $80 million in revenue then they pay at least the corporate tax rate which is around 40% which means they only bring in around $48 million or so right? Not sure of the tax structure of mlb teams but I'd guess that's about the minimum they'd be paying.

MaroonedTexan said...

As far as the second possibility goes Comcast made the agreement with the Astros to pay on average $80 million a year simply for the right to broadcast the games. That amount can not change. What can change is any additional revenue the Astros could bring in from their share in the ownership of the network, so if there is a smaller audience ad revenue will be down but that just goes on top of the $80 mil.