Thursday, August 29, 2013

YAY! The Astros aren't all that profitable!

There's an odd sentiment here. "Hooray!" "Knew it!" "Thank God!" are thoughts that have run through my head as I read Maury Brown's rebuttal of the Forbes piece that claimed the 2013 Astros were the most profitable team in Major League Baseball history.

Brown points out (as we did) that the basis for the Forbes piece was how lucrative CSN Houston is for the Astros without mentioning that 60% of the market can't get CSN Houston. Furthermore, even the $80m "annual revenue" for the Astros isn't right, and doesn't account for the cost of starting the network in the first place.

There are a host of other points that Brown makes, so go read the article, and keep in mind that he's not exactly a fan of Jim Crane.

This can best be summed up by "Jeff Blogwell:"


Anonymous said...

"The premise by which Crane and General Manager Jeff Luhnow are operating works like this: the minor league system was rated one of the worst when Crane purchased the Astros, and player contracts at the Major League level were inefficient in terms of gaining wins for the salary being spent. In a case of “pulling the Band-Aid off quickly”, MLB player payroll has been stripped to the axels and emphasis has been placed on building up the minor league system."

The premise that this is the premise is flawed. Building up through the minors is quite normal. In the recent case of the Astros, it started prior to Crane when Wade traded parts and Drayton started to sign picks. Almost every team in the league emphasizes "building up the minor league system."

If building the minors caused reduced payroll, then almost every team would have a low payroll.

The truth is that they are both building up the minors AND dramatically reducing expenses, presumably in a effort to pay down the debt. Both conscious choices. Maury Brown conflating these two independent choices is as sloppy as the writing in the first article.

MoleBoy said...

They may be separate decisions, but they don’t have to be mutually exclusive. They can be seen as separate parts of one plan. It seems to me that in order to be successful, it doesn’t make sense to do one without the other.

The Astros neglected their minor league roster for several years in order to bolster the major league roster. I’m talking scorched earth. When the team decided it was time to rebuild the minor leagues, the first thing they needed to do was keep all of their draft picks and make sure they got the majority signed. In order to keep their draft picks, they couldn’t sign any Type A free agents.

Some picks won’t sign and most won’t pan out. Rebuilding the farm is a slow process. In order to accelerate it, the team needed to trade away their more established players in order to add extra prospects. Additionally, they could net compensation picks by not re-signing some of their own free agents.

So at this point you have a depleted major league roster. If you want the Astros to increase payroll, they have to sign some free agents. Signing those free agents costs them draft picks, which is what got them in trouble in the first place. But ignoring that, let’s say the Astros did decide to sign some free agents and beef up the roster and payroll. If the Astros had gone for the top free agent pitcher and position player in 2012 and matched their highest offers, do you think there is any way that Pujols and C.J Wilson would have chosen to sign with the Astros over the Angels? Absolutely not. The Astros were basically a minor league team. But, if for some strange reason they had, would it have improved the team? Not really. With Pujols on the roster, there would be no need to sign Chris Carter. So how much WAR would the team gain? A whopping .2! And if they were to replace Harrell (their worst starter) with Wilson, they would gain 3.4 WAR.

So going into this year the Astros would have increased their payroll from (IIRC) $23M to roughly $60M in order to gain less than 4 wins. And it would have cost them some very valuable picks to do so. So I think it is wrong to act like the two decisions are not intertwined. Give Crane and Luhnow some time. I think they are doing this the right way and it will make future success much more sustainable, which is ultimately how Crane will make his money.