Astros owner says he may sell team if no labor deal OK'd By RICHARD JUSTICE Copyright 2002 Houston Chronicle Astros owner Drayton McLane Jr. said Tuesday he will sell the team and leave baseball if the labor dispute between the game's players and owners doesn't result in a system more equitable to mid- and small-market franchises such as his. McLane said he has lost about $105 million in cash since buying the franchise from John McMullen for $115 million in 1993 and is projecting losses of $5 million or more this season. "I have clearly said that there has to be a solution when we sign the new agreement -- whether it's signed in two months or two years," he said. "There has to be a new system. Otherwise, there's no point in me staying in." Asked specifically if he intended to sell the franchise if he wasn't happy with the new labor agreement, he said: "Absolutely. There's no point. What makes it no fun are the financial losses. Here we are trying to beat the Arizona Diamondbacks, the Los Angeles Dodgers, the New York Mets and the Atlanta Braves, and all those teams have payrolls of $90 million or better. We've got a $64.7 million payroll. And based on that $64.7 million payroll, we're going to lose about $14.5 million this season (after depreciation and amortization are figured, the actual cash loss will be around $5 million)." However, McLane made it clear he hopes to remain in the game and he believes that, unlike previous negotiations, the owners are unified enough to gain concessions from the Major League Players Association as negotiations enter a critical phase. "I'm an optimist by nature," he said. "When you have 30 owners, you have people with a lot of different interests, but the commissioner has the power to make a deal." McLane's comments are the latest salvo fired by management in recent days. Last week, commissioner Bud Selig said two teams have such severe financial problems that they were in danger of not finishing the season. One team, he said, might not even make its next payroll. That team, the Detroit Tigers, did pay its players Monday, but Selig insisted the problems he described were real. Since allowing owners to speak publicly on labor matters, they've come forward to detail their losses and the need for significant changes in the labor agreement. "Drayton tells me precisely the same thing he has told you in almost every telephone conversation," Selig said. "There's rarely a conversation in which he doesn't give me that message. I'm not only not surprised, but I hear it from a lot of other owners. I hear it all day long. I know the kind of money Drayton has lost. I know certain people will dispute the numbers, but they're real. When people without an agenda examine the numbers, they come to the same conclusion." At issue is the disparity that developed during the 1990s as construction of new ballparks and signing of lucrative cable television contracts created a gulf between teams at the top like the Yankees and Mets and teams at the bottom like the Twins and Royals. "When we first got here," McLane said, "the top teams were the Yankees and Mets at around $110-$130 million in revenues. I thought, `Man, if I can get $130 million in revenues, we're going to run with the big boys.' We moved into the new stadium, and all of a sudden, we had revenues of $135 million. Unfortunately, our expenses, especially our salaries, also went up." The current labor agreement expired after last season, but in the wake of the Sept. 11 attacks, owners and players put their differences aside and agreed to play one more year under the old system. Now, they're girded for another war. With eight work stoppages -- either an owner lockout or a player strike -- since 1972, they seem headed down a familiar path. At issue is revenue sharing and a luxury tax. Teams share about 20 percent of their local revenues. Owners would like to increase that amount to 50 percent. Players, fearing a drag on salaries now averaging $2.4 million per year, have offered to increase shared revenues to 22.5 percent. Owners also are insisting on a 50-percent luxury tax on payrolls above $98 million. Players have said they're flatly against a luxury tax. Other issues, like a worldwide draft and steroid testing, are on the table, but revenue sharing and the luxury tax are the primary issues. The players are considering a late-season strike, probably in the last two weeks of August, because they believe the owners will attempt to unilaterally impose their system during the offseason. By striking late in the season, they believe they have the most leverage to force the owners to make concessions. By that time, they've collected most of their salaries. Meanwhile, the owners still have a huge chunk of their revenues on the table in the form of ticket and television money from the World Series and playoffs. Because there historically has been such bitterness in the negotiations, some in the game believe a strike could once more wipe out the playoffs and World Series, just as a 1994 walkout did. Donald Fehr, executive director of the players union, declined to comment on McLane's statements.
At issue is revenue sharing and a luxury tax. Teams share about 20 percent of their local revenues. Owners would like to increase that amount to 50 percent. Players, fearing a drag on salaries now averaging $2.4 million per year, have offered to increase shared revenues to 22.5 percent. This tells you how serious the players are about negotiating. After 6 months, they've agreed to share an extra 2.5% of team revenues. WOOOHOO. Go on strike. Break the union. Get it over with and fix baseball.
This is the best news I've heard as an Astros fan in a long time. Sell the team Drayton!!! My only question, is why he would sell the team while MLB is on strike. That could only kill the franchise value. What's funny is that moneybags is b****ing about how much money he lost, but what moneybags doesn't realize is that he can recoup his loss, as well as make a profit from selling the team. He bought the Stros for around 130 million in 1992 or 1993. If he sold the team right now, he'd probably get anywhere from 350 to 400 million. McLane will be wiping his tears with 100 dollar bills.
kidrock-- Why should Drayton (or anybody else) be expected to lose money in a venture? Sounds like sour grapes because he has been successful and made a lot of money earlier in life. Drayton is by far the best owner this team has ever had. Anybody who has followed the team since the 1980s knows that. Major-- I agree with you completely. Couldn't have said it better myself.
You cant actually believe he has lost money. When talking about losing money he means that he expected to gain 20 million dollars this year. Instead, he gained 15 million. That comes out to a loss of 5 million. The guy is not actually losing money out of his wallet, he is just getting less than he hopes. SELL SELL SELL!!!! WOOOHOOO!!! Drayton, get your ass out!!!
You cant actually believe he has lost money. When talking about losing money he means that he expected to gain 20 million dollars this year. Instead, he gained 15 million. That comes out to a loss of 5 million. And you base this on what, exactly?
Its just my interpretation of it. Not really based on anything. I just refuse to believe that he is actually losing money. Its ridiculous, IMO.
Break the union! Break the union! Break the union! Blow it all up, start from scratch, and see if they(owners and players) can keep from f#$@ing it up again!
You actually think baseball owners lose money?? C'mon man. Have you seen the revenues they get?? With over 3 million fans that attended Astros games and bought cokes, hot dogs, beer, etc..., you really think McLane lost millions?? Also, my friend's dad does advertising work with Drayton. The guy does not lose money.
Aramark gets the concession revenue. They pay Drayton an annual fee to be able to control that line of business. When your friend's dad is Drayton's accountant, then I'll be more inclined to give it credence.
You've given me no reason to believe otherwise. Oh yeah, I forgot that your friend's dad is an ad man. My father in law is a doctor, but I don't want him planning my retirement fund.
He is an ad man for Coca Cola. He is very close to Drayton. The money that Drayton makes is enough to cover his costs. He does not lose money.
Drayton should sell the team...Did you hear what he pulled with our picks this year...."I dont have enough money to sign our first, third, fifth, eighth or ninth round picks this year." They were mocking us on Baseball Tonight saying how pathetic Drayton is.I Agree.
Wasn't there a clause in the stadium deal stipulated that Drayton would agree to keep the team in Houston for 30 years? If he did end up selling the team, would the new owner be bound to the same agreement, or could he sell to anyone he wanted?
And apparently let their ad guys know the financial skinny on their clients. With there about to be a major change in the collective bargaining agreement, he'd be a fool to sign them under the current rules when he can sign them later much cheaper. It's called prudent business. Any owner would be bound. That agreement is with the Houston Astros, not just Drayton McLane.
