Seeing more and more rumors that Crane is looking to sell soon. Seems like he’s seeing the writing on the wall with free agents coming up that the competitive window for this iteration of the Astros is closing soon. He’s trying to sell at peak value before the rebuild down the road. No surprise he’s refusing to spend and go over the “soft cap”. He’s a business man first and foremost.
It's more than just business Staying under the CBT gives the Astros better comp picks of Bregman and/or Altuve leave for FA after this year. For example, if they had been FA this year and signed somewhere else this offseason: The comp picks would be immediately after the first round in the 31-40 range. If the Astros go over the CBT this season, those picks fall to after the 4th rd in the 130-140 range. That's a huge talent difference when you lose a star and need to restock the minor league system.
I’m excited about it. Been at research for hours today as that pesky work thing ain’t happening for the next 3 weeks.
It’s not as bad as all that on worries about the carriage and the like. We will get into that tonight. It’s also not super awesome.
If he were looking to sell - from a valuation perspective- he would look to sign long term contracts he wouldn’t be here to pay for. The fact he’s giving indications that we will let Bregs walk is clearly indicative of a man looking to hold.
Oh trust me Dana Brown knows, I can guarantee you he don't want to sell off assets to help in 26, dude is trying to win a World Series Now, Crane and several CF posters are another story As Jim Bowden says, prospects are cool, parades are cooler
They’re currently guaranteed $50 million a year. They could make much more than the $76 million a year when it’s all said and done…. And that number was still middle of the pack compared to what most of their competing teams were getting (most with ownership stakes as well). The problem with CSN wasn’t the business model (which is the same as all RSN’s)… it’s that they didn’t have carriage contracts in place. Space City does have those, along with the infrastructure for streaming. Eventually they’ll have to negotiate extensions with those carriers when those deals are up. As far as negotiating ad deals/etc… most sports teams are pretty well versed in all of that as they’re already running things from the radio side and all those ads all over the ballpark didn’t get there by accident. And while there are technically less people paying for package TV deals (l.e. - cable/satellite), the number of broadband internet subscribers has never been higher… with most of those subscribers coming from or affiliated with said cable/satellite companies. The cut-cord replacement companies are also starting to charge rates higher and higher for their wireless “TV” services, and eventually will just be an updated version of the traditional model (while they’re also still paying fees to offer live sports channels to the owners of those networks). IOW - live sports is still the safest bet in all of subscription TV, and the Astros are actually one of the more safer/less impacted franchises compared to what may happen to all the teams in bed with the legacy providers (unless they soon buy out their contracts and get control over their channel).
They MIGHT make more revenue... but their expenses are now higher since they own the network and have to pay for production, etc.
They were still paying for a good amount of the production prior (staff, on air talent). They also basically got the entire network, with carriage agreements already negotiated, at a significant discount. Plenty of teams currently tied to iffy legacy network contracts would take ownership of a ready to go network in a second.
We just dropped a pod on the economics of baseball on breathing orange for that I’m pretty proud of. If you have any interest in how things work/ please give it a listen- I think it’s pretty good and I’d be very surprised if you didn’t learn something new/cool from listening. Breathing orange fire on Spotify/apple/whatever. I’m also going to be writing a series of posts based upon my research and the stuff I learned about how it all works.
Here is the problem as I see it. 2024 and 2025 seasons are likely the end of this window of being legit contenders. The negative impacts in terms of revenue, etc are happening now. This hurts the window. I don't care at this time if in the end owning the network ends up being a positive 3-5 years from now when this window is closed. Acquiring the level of talent it takes to make a run like this team has been on is so unbelievably difficult and also involves quite a bit of luck. Also, this article in the chronicle seems to go against your potential rosy outlook of the situation. I pulled some relative parts from the article below. The article also took a massive dump on the idea of streaming being able to fill the hole. https://www.houstonchronicle.com/te...os-navigating-new-order-regional-18497226.php "With the ownership change, however, comes a significant change in economics. The teams have lost their guaranteed rights fees of about $120 million per year ($73 million for the Astros, $47 million for the Rockets), and will take a significant revenue cut — initially, as much as $30 million — as they inherit what was a money-losing channel." “The pay TV bundles were a natural monopoly that gave you access to all economic classes. It was the greatest business in the history of this country,” said media consultant Patrick Crakes, a former Fox Sports executive. “The bundle now has dropped (to an estimated 60 million households as of June), and the industry now must adjust to flat revenues, maybe declining revenues in some cases. RSNs are the hothouse flowers of the pay TV bundle, and they are the first segment to see the effect of these changes.” "When AT&T SportsNet Southwest launched in 2014 after the bankruptcy of Comcast SportsNet Houston, Comcast, AT&T and DirecTV had about 1.5 million subscribers in the 20-county Houston designated market area. That number has plummeted to about 720,000 as of the third quarter of 2023, according to S&P Global Market Intelligence." "That, he said, would place Space City Home Network’s projected revenue at about $110 million. That’s already short of the $120 million that Warner Bros. Discovery was paying the Rockets and Astros, and it doesn’t take network operating costs into account. Analysts say the average production cost for an MLB or NBA game is about $40,000, which would result in about $9 million in production costs for the local telecasts of 150 MLB games and 72 games. Other operating expenses, analysts say, could total about $10 million, which would put net revenues at around $90 million, about $30 million short of the $120 million the teams were getting from WBD." "He said a standalone, direct to consumer subscription to an RSN such as Space City Sports likely would cost at least $20 per month, which is Bally Sports’ monthly charge. Others, such as NESN in the Boston area, charge up to $28 per month. At those rates, it would take tens of thousands of streaming subscribers to make a substantial dent in the lost rights fee revenue, and those numbers are hard to come by. Diamond Sports in June said its 19 RSNs had totaled only 203,000 streaming subscribers nationwide."
I don’t think anything you said or posted would be disagreed with by @Nick who has a pretty good grasp of what’s going on- and I think y’all are both right. yes- it’s going to take a hit now. Today. But, he mentioned we will do better relative to our peers as we had less of a height to fall from, and, owning the channel and content puts us in a better situation that’s lots of other people out there. btw- I think the $20 and $28 a month streaming option is way too light if you want to be revenue neutral. That number is way higher. All $20 a month does is (hopefully) maximize how much money you bring in- it doesn’t actually get you there. future though, they might end up better off than they were. There’s the argument that we are through with the cord cutting and unbundling and we could well be entering an era of consolidation. Also- I get what you are saying about caring now, but if they nail this, or at least end up as relative winners losing less than their competition, that will perhaps mean we can open the next window up quicker.
Was Diamond Sports offering standalone streaming services for their teams? If all they were offering is their RSNs as part of a larger service like Fubo then that’s probably not a good data point. I am fairly ignorant on the topic but it boggles my mind that teams can’t make damn good money offering a service for JUST streaming a customer’s favorite team’s games for like $150/yr. I pay 5x that for Fubo and the Astros RSN is the only reason I subscribe.
