MLB's Worst Team, Houston Astros, Is Reportedly the Sport's Most Profitable

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MLB's Worst Team, Houston Astros, Is Reportedly the Sport's Most Profitable

The Houston Astros are the best and the worst.

 

UPDATE: Monday, Aug. 26, at 7:45 p.m. ET by Gabe Zaldivar

Astros management is now responding to assertions made by the Forbes report, stating significant inaccuracies are presented. 

CBS Sports reports the franchise released the following statement in regard to the Forbes article:

We are very disappointed that, earlier today, Forbes released an article that includes significant inaccuracies relating to the Astros' finances. The Astros do not disclose financial information. However, as MLB will confirm, the information reported in the Forbes article relating to the Astros' revenues, the Astros media rights fee from CSN Houston, and CSN Houston's per subscriber rate are all significantly inaccurate. As a result, the conclusion about the Astros operational profit is significantly inaccurate.

The Astros will continue to operate the team in a fiscally responsible manner that will make the City of Houston proud. We are very excited about our accomplishments and we remain steadfast in our commitment to this rebuilding process. We have established a basis of young talent on our MLB roster that will continue to improve. And our minor league system is now one of the best in MLB. As our young prospects develop, we will move them up to the Major League roster and increase our payroll to a level that will allow the Astros to compete for World Championships. The success of CSN Houston is a vital piece of that process and we continue to work toward establishing full distribution.

The team didn't divulge any further information as far as the exact amount of deals or the profit it might generate in any specific year.

CBS Sports' Matt Snyder notes the Forbes report, while being allegedly inaccurate, may have also brought far too much publicity to a bottom-dwelling team that continues to turn a profit. 

We will continue to update this story with more details from either the team or Forbes

---End of update---

 

Before we delve into how things have been absolutely awful, let's concentrate on the peculiar manner in which the Astros have been extremely successful. According to Dan Alexander of Forbes, the franchise is the most profitable in MLB history.

We probably should have made sure you were sitting before that last sentence:

The Astros are on pace to rake in an estimated $99 million in operating income this season. That is nearly as much as the estimated operating income of the previous six World Series championship teams — combined.

The reason is quite simple: Owner Jim Crane has reduced cost dramatically as the club tries to rebuild and move forward in the American League.

Bob Levey/Getty Images

As noted by Alexander, the club will deliver about $21 million to its players in salary over the 2013 season, down significantly from the $56 million payroll  from 2011.

What is it they say about omelets and eggs again? Regardless, you can't restock the farm system without losing a whole bunch of games.

At least, that's what Crane touched upon when he promised the franchise would get back on track with what matters to fans (wins) just as soon as the farm system is all worked out.

Crane told ESPN The Magazine, "Once our minor league system is filled in, we’ll move up into the top five or 10 in payroll."

Astros fans can only hope the payroll rises from the depths of MLB. However, one might commend the owner for taking a bottom-up approach to the situation.

Deadspin reported the payrolls of each club entering the season. Of the top 10 teams, only five have any real shot of making the playoffs this year.

The Washington Nationals—12th on the list with a payroll of $112,431,770—have been mediocre this season, sit 13 games back of the Atlanta Braves in the National League East and own a meager 65-65 record.

Perhaps making sure all is well on the farm before you make it rain on free agents is a sensible thing to do, especially when you notice guys like Vernon Wells make as much all of the Astros combined. Horrible contracts abound.

Still, it's been rough to watch this year.

Alexander contextualized just how bad the Astros have been this season: "Of the 270 Major League Baseball teams who have taken the field since 2005, none have finished with a worse winning percentage than Houston’s."

The club heads into the week with an astounding negative-178 run differential and ranks last in ERA and WHIP and 24th or worse in runs, on-base percentage and slugging.

The Astros are 43-86, 31 and a half games in back of the AL West leading Texas Rangers.  

Scott Halleran/Getty Images

Alexander does state there is hope Crane will make good on his word to spend far more money on the open market in time.

The profit delivered this season goes a long way to pay down debt the owner procured in buying the team, and there is the deal with Comcast SportsNet Houston to consider.

According to the report, the network pays the Astros $80 million a year for broadcast rights. It's this point that should really drive optimism in the franchise.

The better the team, the higher the ratings for its broadcasts, making this particular deal a sign of what might come with a real winner on the field.

At first glance, it looks as if the Astros owner would be content to merely rake in profit from slashed payroll, but the thought of the television audience leaving is far too great to ignore.

In an odd turn, the Astros' profitability has come at an insane price—although Crane would like you to know he has the checkbook out to spend when the time is right.

That's the kind of sensible spending you don't normally see in sports.

 

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