Defensive? His team and business model is under attack. Would you rather he say nothing. Of course he knows where all the money is going, it is his responsibility! Not sure what you want or expect... Sounds like you just want to complain.
See the last post. I had an issue with one of the points in the "defense" that wasn't explicitly said in the other comments. And actually, I'd rather he specifically not say anything. I don't think it helps his image around the city.
Additionally, the Astros need to get on top of these sort of things BEFORE they hit the wire. Apparently Forbes tried to set up a dialogue to iron out the details and were rebuffed by the team. Forbes isn't the usual gossipy media trash...they usually are in the business of reporting on accurate valuations and facts. Of course the Astros left themselves open to this sort of criticism. They've been facing it all year. Whoever is in charge of making sure stories like these don't get printed without all the facts should be criticized. I expect the Astros to make a profit this year. It's not $99 million dollars... It's likely somewhere in the middle of what both sides are claiming. The story is already out there however, and they're going to have a hard time backtracking to get the mainstream to believe entirely their side of things.
Forbes' valuations have frequently been crap, and generally, their sports columns are trash designed to get hits.
Yup...you are right. I guess I just accepted that as truth from reading what others had said. Thanks for clarifying.
In the end, the players still need to deliver. And right now, they are not earning their paychecks. So the way I look at it, this team is getting paid for the level of play accurately. It's funny to me that in these economic times, the one business that is doing well, the best in history, is taking a licking by the media and fans, when the truth is, this guy is doing what we all should be doing, finding a way to make a profit. It's entirely possible he's saving the franchise. I don't know. But do I think he's got it right. I think so. If the teams improves, they will get paid.
Nice. I don't think crane and co. liked the fact that every major local and national media outlet picked up this story (I doubt they all bother to report the rebuttal in its full depth with the same fervor). Outdid most, if any, of the good pr the team had going for them. The country knows the Astros are bad... but now they're being portrayed as ultra cheap while profiting loads. It's not a good portrayal.. And if there was some way they could have mitigated the story BEFORE it came out, they'd probably be more at ease right now.
Looks like it really does boil down to CSN working out. (From Reid Ryan q&a) http://www.crawfishboxes.com/2013/8/25/4658068/astros-insights-from-reid-ryan He did say that he expects to be able to pay free agent salaries when the time is right regardless of whether CSN happens. The difference is, if there's no CSN we become the Rays or A's and have more of a revolving door focusing on more value-type guys. If CSN does happen we have the ability to become more like the '90s-'00s Astros with recognizable long term faces in the lineup (but with a better plan behind the scenes).
Right, and what are they supposed to have said or done? Forbes was going to write the story regardless. Further, discussing the teams finances with a reporter sets a bad future example. The fact is that the Astros will get negative attention regardless because they are one of the only teams, possibly the only since Connie Mack's A's to come out and essentially admit they are trying to be bad and tear it all down to rebuild it again. The Astros will have the #1 pick three straight seasons.. So negative stories are to be expected. If you want to rip Crane for the Postolos era, feel free. However, in the case of this article, there isn't much they did wrong.
Lots of interesting stuff on the internets if you're interested. Fans of the Astros may not know this, but as of today, your team is officially out of compliance with MLB’s debt rules. Of course the league knows this as it comes with a sale that now ranks as the second-highest in league history. Going into debt to make the deal happen was what Crane and his investors needed to do to seal the deal. In other words, the Astros now carry more than 10 times their annual revenues. In speaking with representatives of Major League Baseball, the debt service rule is designed to allow flexibility for sales transactions to be in violation of the rule, if only for a short period. As one league source said, “If we didn’t make an exception for the rule, no sales transactions would take place.” It’s how fast Crane and Co. can get back into compliance with the league’s self-imposed rule that will be key. According to the SportsBusiness Journal, Crane’s deal reportedly sees a $220 million debt component from Bank America. But, in a sign that financial institutions are looking more closely at how debt is collateralized, Crane and the investors have considerable capital in the deal. As the SBJ reports, the loan “is conservatively structured, with covenants, for example, requiring Crane to pre-fund expected losses. Some of the loan also is set aside for interest reserves, the sources said. “ The interest rate on the deal is 275 points over the London Interbank Offered Rate, or LIBOR, a floating rate index, according to the SBJ. The report goes on to say that the Astros already have borrowed approx. $55 million in debt from MLB’s league-facility fund. http://www.bizofbaseball.com/?catid...ros&Itemid=39&option=com_content&view=article Google "MLB debt service rule" for further info.
I suppose if you believe that, then there's nothing much else to say. I also don't think the Astros can completely deny the story... as they are going to turn a profit... thus they're gonna have to stick to the "numbers are not accurate" defense. The reason this story was written about the Astros vs. the Marlins (a team that should continue to be exposed for what they did to the community re: new taxpayer stadium) is because the CSN rights fees got reported as team income (even though we knew they didn't make all of it due to the losses from being a part owner of the network). They could have likely lessened the impact of the story by telling Forbes (or the Houston media) exactly how much they have lost in regards to the network. I don't think that sets a bad precedent... certainly no worse than what has already been done by the article in the first place. I'd also like to see the source of where the debt repayment issue came from... not sure I've read anybody in the organization flat-out say that's what they're doing. (EDIT: Thanks, BT).
Ok so I googled it and back then 1/3rd of the league was out of compliance with it. http://mlb.mlb.com/pa/pdf/cba_english.pdf There's the link to the CBA with the rule discussed on page 208 in attachment 22. It looks like being out of compliance isn't a major deal as long as the ownership works toward being compliant. A club isn't compliant with the debt service rule if their debt is 8x greater than their EBITDA. That number can increase to 12x EBITDA if the debt is related to a new stadium being built...if I read it correctly. There are also special considerations when a club fails to comply after it has been sold. Basically, the new ownership meets with the commissioner and presents a 2 to 5 year plan about how they plan to get back into compliance. What I did think was interesting was that the league can mandate that the ownership guarantees the debt. This was done in the sale of the Astros to Crane where Crane guaranteed the BofA loan and the existing debt. After reading this part of the CBA it does seem that Crane is kind of forced to pay down debt even though he has never stated it publicly. The other route to compliance is to make the club more profitable. It appears he is doing both. I'm pretty sure the club was not showing a profit the year Drayton sold it so any addition of debt would have made the Astros non-compliant with the debt service rule in my eyes. Also, I did some more googling and found that Fitch (the bond rating company) upgraded MLB debt about a month ago. http://www.businesswire.com/news/ho...tch-Upgrades-MLB-Club-Trust-Securitization-Sr. There were a couple interesting bits from this report... This would seem to mean that the MLB has plans from all the teams that were not complying with the debt service rule and they are projecting quick repayments of debt. And the other interesting thing... Just found that interesting since it states what is the max a team can borrow from the MLB. Report in spoiler for size Spoiler
I don't understand why folks are pissed at the Astros for paying down debt. Would you rather still be signing mediocre FAs and finish with 72 wins? I also think it's ridiculous to already throw around the "cheapskate" label when the current owner is doing exactly what he said he would so far. Spending significantly on minor league development and international scouting. Shouldn't we let the guy work his three-year plan before judging? But I know better. There will be those who will always call every owner cheap.
If I remember correctly, the Astros have increased their scouting presence in Asia and in Venezuela and in the Caribbean, and in Mexico. Minor league depth has been added as well as some of our big draft picks coming from the Caribbean. Last year they were able to overpay for Lance McCullers, luring him away from college. Dude is spending on development exceedingly more than the Astros did in the last five-ish years of Drayton's tenure.
Well, Drayton did build a new DR complex at the end of his tenure. Who knows how much the Astros spent on Harris and Amador. It is generally very expensive to obtain those rights.
Another fun fact - Of the Major League Baseball teams who have taken the field since 2005, none have finished with a worse combined winning percentage than Houston’s. L*Astros earn their star...
Obviously the Astros aren't going to show anyone their books, but here are two facts that are publicity known:1) the Astros have a ~20 million dollar Major League payroll this year and 2) their revenue is at least high enough to be in the top 66% of all MLB clubs (known by their being ineligible for the comp balance lottery). Through the comp balance lottery we also know that their revenue is large enough to not receive revenue sharing. Given these facts it's hard for me to believe that they are telling the truth about losing money. What's also concerning is the amount of amateur money the Astros have been leaving on the table lately. For the 2012 draft Luhnow said he was going to try and spend every penny of their allotted money to sign players. And they basically did. In contrast, for the 2013 draft they left over a million dollars of bonus money unused (about the equivalent of another 1st round pick). It also looks like they left a significant portion of their 12-13 international bonus money unused and are currently well under budget for the 13-14 period. Now maybe not using the full amount of their amateur signing allotments is due to strategic reasons or unrelated to budgetary concerns, but, when a team in the middle of a historic rebuild with a payroll in the teens starts skimping on draft and player development, it may be the canary in the coal mine.
