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UPDATE: Astros deny Forbes report about team’s profit

Aug 26, 2013, 7:57 PM EDT

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UPDATE: According to the Houston Chronicle, the Astros have issued the following statement denying the report from Forbes about the team’s record profit:

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.

3:30 p.m. ET: Get a big TV contract while you’re slashing payroll in a monster rebuild that is past the “ugh, we can’t look” stage and into the “hey, moral victories are great!” stage and you’re gonna be profitable. But this is kinda nuts. From Forbes:

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.

I imagine some people will have a problem with this, arguing that Houston should up its payroll more, but really, I’m not sure why they should. They’re not a couple of highly-priced players away from contention. Why throw $20-30 million in the toilet unless it will do something meaningful on the field? They’re going to finish 30-40 games out of first place. Should they try to finish 20 games out? Will that really make fans any happier? Indeed, given the kinds of players that money would likely bring in — veterans who have used up their last chances to play for a winner — it would probably be more depressing than what the Astros have now. At least young unknowns can serve as a canvass on which fans can paint their hopes and dreams, even if that kind of painting tends to be somewhat unrealistic.

The Astros wouldn’t have such a low payroll now if their previous ownership hadn’t put off the hard work of rebuilding for so long. But this is where they are. If they are still cutting payroll and raking in profits when some additional expenditures could reasonably mean the difference between being in or out of the playoffs, fine, let’s go after them then.

  1. misterj167 - Aug 26, 2013 at 3:40 PM

    If they were smart they’d pour money into scouting and player development, while having a big name free agent can fill a spot you need, player development seems to be the key to continued success in baseball.

    Then again, there’s the Yankees…and now, the Dodgers…

    • paperlions - Aug 26, 2013 at 3:46 PM

      That is exactly what they are doing.

      Sustained success is what teams are after, it remains to be seen if the Dodgers approach will be sustainable or lead to a long period of competition. The model has changed since the Yankees were effective at spending money and winning, that isn’t working anymore as teams now lock up most of their young players through their peak years.

      • koufaxmitzvah - Aug 26, 2013 at 4:26 PM

        The current Dodger way is much better than the former Dodger way. Is it sustainable? They lead the league in both home and road attendance, so there is something to be said about putting a high priced object on the field.

        The secret to success isn’t the amount of investment but the quality of player. That clubhouse has a great work ethic, and they are a dangerous team.

    • jeffa43 - Aug 26, 2013 at 5:57 PM

      The Stros have 6 first place minor league teams, and rank #1 with most prospects in the top 50.

      Example, the halos have 6 last place teams and you can make an all star team out of all the rookies/2nd yr players they have gave away…Harvey, Segura, Corbin etc.

      Many are laughing at the Stros, not realizing they will be one of the best teams in ball over the next few years. With plenty of depth in the minors and money in the pocket.

      • jdouble777 - Aug 26, 2013 at 7:26 PM

        Correra and Springer? ARZ, MIN, and BAL have two in the top 25.

      • lordfletcher - Aug 26, 2013 at 11:59 PM

        for the sake of stating the obvious… and its the only thing us Twins fans have…

        we have two prospects in the top 3

      • lordfletcher - Aug 27, 2013 at 12:46 AM


        “Many are laughing at the Stros” … I am for not taking Buxton (cough) not willing to pay him, which this article is kind of talking about.

  2. blabidibla - Aug 26, 2013 at 3:42 PM

    Keep developing the farm, and wait on the big FA signing a couple years from now. No one expects them to contend for a few years so take advantage of the time to build from within.

  3. sabatimus - Aug 26, 2013 at 3:44 PM

    1) Eliminate revenue sharing.
    2) Introduce a salary floor.

    • paperlions - Aug 26, 2013 at 3:59 PM

      Why in the world would you eliminate revenue sharing? Is the goal to have a 6 team league? Or to have 5 teams in NY, Chi, and LA?

      • sabatimus - Aug 26, 2013 at 4:47 PM

        Because revenue sharing allows owners who aren’t interested in baseball (i.e. who are only in it for a profit) to make money without having to be competitive. There’s something seriously wrong when the Astros, the worst team in baseball, make MUCH more money than the last SIX WS winners.

        The goal is competitiveness, not merely making a profitable investment. As a baseball fan I don’t want dilution of the product, and revenue sharing helps enable that to happen. As does a floor.

      • paperlions - Aug 26, 2013 at 4:57 PM

        Yes, and if there is no revenue sharing then there will be no way for teams in small markets to compete. May as well close up shop in Cinci, StL, Milwaukee, Pittsburgh, Tampa, etc….because without revenue sharing, there is no way those teams can compete with the monopolies in NY, Chi, and LA.

        Houston didn’t do what they did to make money, they did it because it was the best course of action to become a competitive team….and it would be best to rather ignore alleged profits. Teams make far more money than they claim, owners just pay it out to themselves and family members as “salary”.

      • sabatimus - Aug 26, 2013 at 4:48 PM

        erm the lack of a floor

      • sabatimus - Aug 26, 2013 at 5:44 PM

        If there’s no way for small markets to compete, then why bother buying a small market team if you want to compete instead of simply turning a profit? There’s too many teams anyway.

    • TheMorningStar - Aug 26, 2013 at 4:01 PM


    • djpostl - Aug 26, 2013 at 4:50 PM

      If you have a salary cap and a salary floor then yes, 86 the revenue sharing.

      For all the incessant whining from small and mid-market team’s fans this is indeed proof of what’s wrong with baseball (here’s a hint: it’s not the Dodgers or the Yankees)

      Every time Fortune or Forbes ranks the wealthiest owners the Steinbrenners don’t even crack the top ten yet the owners of the stingiest teams (Pirates, A’s & Twins) do.

      Miami is like a caricature of this too. They don’t put a product worth watching on the field (other than Oakland) and they rake in record profits because they’re getting money kicked back at them via revenue sharing and the separate luxury tax funds.

      Then said owners whine in from of any camera they can about how “we can’t compete”, “it’s not a level playing field”.

      Once someone brings up the idea of a salary cap THEY kill it (not the wealthy teams) because they are well aware of how every league with one also has a salary MINIMUM.

      Let’s say, in some alternate reality, MLB owners and players actually did agree on a salary cap. With it would come the normal provisions one sees in EVERY league with a cap: a salary floor at around 75-85 percent of the cap, and a guaranteed percentage of total industry revenues for the players.

      The last time I saw someone crunch numbers on this was in 2009 but it showed that around 9 teams would have had to add between 13 and 28 Million to their payroll to meet the minimum.

      Imagine being a GM who is trying to rebuild your team and plan for the long-term when you’re suddenly confronted with this? Not only would the team have to take a big loss, but the long-term strategy would be sabotaged, since the team would have to sign a number of veterans just to meet the minimum payroll.

      That’s why it’s easy to talk out their ass about how unfair it is as they roll in the money. And the sad fact is the fans of these pathetic teams keep falling for it and blaming everyone except the ones who should be shouldering the blame.

      • sabatimus - Aug 26, 2013 at 5:45 PM

        You said it much better than I did.

    • stlouis1baseball - Aug 27, 2013 at 6:09 PM

      But…don’t most people run a business to make money? Specifically, isn’t that why they do so to begin with? Again…I stated “most” people.

  4. mybrunoblog - Aug 26, 2013 at 3:44 PM

    Great retro uniforms/logo in 2014 and a huge profit? Coincidence?

    • johnnysoda - Aug 26, 2013 at 3:47 PM

      Those uniforms (except for the Sunday home ones) are extremely ugly IMO. I miss the old white and maroon scheme.

      • jeffa43 - Aug 26, 2013 at 6:00 PM

        Bro… The Sunday ones are ugly, the white and orange are awesome. Refer to the 18 thumbs down on your take.

  5. Joe - Aug 26, 2013 at 3:48 PM

    Operating Income Profit.

    • Joe - Aug 26, 2013 at 3:50 PM

      Oh, crap, I forgot my HTML lesson from a couple months back.

      “Operating Income does not equal profit.” It doesn’t include debt service costs for one thing, which are pretty high for a leveraged purchase like Crane made.

  6. sabathiawouldbegoodattheeighthtoo - Aug 26, 2013 at 3:59 PM

    Are there any financial repercussions for this from the league or player’s association?

    It seems like some sort of sanction should be in order for underspending if sanctions are in place for overspending. After all, the overspenders are certainly demonstrating a desire to field a competitive team. Underspending seems to undermine competitive balance more while allowing 1/30th of MLB to be treated as a personal piggy bank for its owner.

    • raysfan1 - Aug 26, 2013 at 4:13 PM

      The penalty for Jeff Loria making a habit of underspending and not putting a competitive product on the field appears to be a stern look and a finger wag from the MLB front office.

  7. scoutsaysweitersisabust - Aug 26, 2013 at 4:10 PM

    Jeff Loria is furious and want’s his cut of the pie.

  8. areyesrn - Aug 26, 2013 at 4:22 PM

    Ed Wade says you’re welcome

  9. hk62 - Aug 26, 2013 at 4:37 PM

    Based on opening day Payroll (Cots for the data):
    Next season, their whole starting staff and their starting OF will all be on club quote salaries too –

    Team OD Payroll Games Pct ToDate Wins $/win
    HOU $26,105,600 129 $20,787,793 43 $483,437
    TB $61,928,975 128 $48,931,536 74 $661,237
    OAK $61,964,500 129 $49,342,102 72 $685,307
    PIT $66,805,000 130 $53,608,951 76 $705,381
    MIA $50,526,900 129 $40,234,383 49 $821,110
    CLE $80,605,733 130 $64,683,613 71 $911,037
    ATL $90,039,583 130 $72,253,986 78 $926,333
    SD $68,333,600 130 $54,835,605 59 $929,417
    COL $73,949,071 132 $60,254,799 61 $987,784
    KC $81,871,725 129 $65,194,151 65 $1,002,987
    ARZ $86,300,500 129 $68,720,769 66 $1,041,224
    BAL $92,238,333 129 $73,449,043 70 $1,049,272
    SEA $84,199,643 129 $67,047,864 59 $1,136,404
    MIN $82,010,000 129 $65,304,259 57 $1,145,689
    CIN $106,855,533 129 $85,088,665 74 $1,149,847
    STL $116,790,787 130 $93,721,002 76 $1,233,171
    MIL $88,828,333 130 $71,281,996 57 $1,250,561
    NYM $93,684,590 128 $74,022,392 58 $1,276,248
    TEX $125,340,100 130 $100,581,562 75 $1,341,087
    WAS $118,289,679 130 $94,923,816 65 $1,460,366
    DET $148,693,600 130 $119,322,025 77 $1,549,637
    CHC $106,837,810 130 $85,734,045 55 $1,558,801
    BOS $154,555,500 132 $125,934,111 77 $1,635,508
    TOR $119,277,800 131 $96,453,036 58 $1,662,983
    CWS $118,914,500 129 $94,691,176 54 $1,753,540
    LAA $137,271,250 129 $109,308,588 58 $1,884,631
    SF $136,908,777 130 $109,865,068 58 $1,894,225
    PHI $159,585,714 130 $128,062,610 59 $2,170,553
    LAD $216,753,286 130 $173,937,822 76 $2,288,656
    NYY $228,106,125 130 $183,048,125 69 $2,652,871

    • hk62 - Aug 26, 2013 at 4:40 PM

      OK that didn’t work – looked fine in the box before I sent it – Numbers after the last dollar sign are dollars per win based on opening day payroll adjusted for games played. Sorry for the mess.

    • hk62 - Aug 26, 2013 at 4:41 PM

      Sorry about the mess – just look at the last dollar sign forward – that’s dollars per win. It looked great before I hit submit?

    • jwbiii - Aug 26, 2013 at 8:46 PM
      Team OD Payroll Games Pct ToDate Wins $/win
      HOU $26,105,600  129  $20,787,793 43  $483,437
      TB  $61,928,975  128  $48,931,536 74  $661,237
      OAK $61,964,500  129  $49,342,102 72  $685,307
      PIT $66,805,000  130  $53,608,951 76  $705,381
      MIA $50,526,900  129  $40,234,383 49  $821,110
      CLE $80,605,733  130  $64,683,613 71  $911,037
      ATL $90,039,583  130  $72,253,986 78  $926,333
      SD  $68,333,600  130  $54,835,605 59  $929,417
      COL $73,949,071  132  $60,254,799 61  $987,784
      KC  $81,871,725  129  $65,194,151 65 $1,002,987
      ARZ $86,300,500  129  $68,720,769 66 $1,041,224
      BAL $92,238,333  129  $73,449,043 70 $1,049,272
      SEA $84,199,643  129  $67,047,864 59 $1,136,404
      MIN $82,010,000  129  $65,304,259 57 $1,145,689
      CIN $106,855,533 129  $85,088,665 74 $1,149,847
      STL $116,790,787 130  $93,721,002 76 $1,233,171
      MIL $88,828,333  130  $71,281,996 57 $1,250,561
      NYM $93,684,590  128  $74,022,392 58 $1,276,248
      TEX $125,340,100 130 $100,581,562 75 $1,341,087
      WAS $118,289,679 130  $94,923,816 65 $1,460,366
      DET $148,693,600 130 $119,322,025 77 $1,549,637
      CHC $106,837,810 130  $85,734,045 55 $1,558,801
      BOS $154,555,500 132 $125,934,111 77 $1,635,508
      TOR $119,277,800 131  $96,453,036 58 $1,662,983
      CWS $118,914,500 129  $94,691,176 54 $1,753,540
      LAA $137,271,250 129 $109,308,588 58 $1,884,631
      SF  $136,908,777 130 $109,865,068 58 $1,894,225
      PHI $159,585,714 130 $128,062,610 59 $2,170,553
      LAD $216,753,286 130 $173,937,822 76 $2,288,656
      NYY $228,106,125 130 $183,048,125 69 $2,652,871

      The <pre> tag is your friend

  10. danaking - Aug 26, 2013 at 4:41 PM

    Is there something that prohibits a team in the Astros’ position from banking some of that money so, when the time comes they may only be a player away, or need to keep a home-grown guy, they have it?

    • Reflex - Aug 26, 2013 at 5:30 PM

      No, and lots of teams do this. The Jays financed their offseason binge this way, and the Mariners also claim that is what they are doing as they wait for their farm system to mature. Its smart and keeps GM’s from making dumb signings from the ‘use it or lose it’ perspective.

  11. righthandofjustice - Aug 26, 2013 at 4:44 PM

    Crane assumed ownership of the Astros through an LBO. He has to cut the $275 million in debt first. He has no obligation to sport a competitive team now. Wisely he should just trim most of the debt, buy low on prospects who should be ready in no less than 2 years, and sell high on their veterans.

    • djpostl - Aug 26, 2013 at 4:53 PM

      “He has no obligation to sport a competitive team now”

      Bullshit. The entire point of revenue sharing and luxury tax payments is to “maintain a competitive balance”, not “pay off one’s credit cards”.

      • sabatimus - Aug 26, 2013 at 6:01 PM

        Crane may not be able to sport a competitive team right now. But it’s the abuse of the revenue sharing system that allows teams to intentionally not compete.

      • righthandofjustice - Aug 26, 2013 at 7:44 PM

        When you are in debt you don’t share revenue and have no luxury tax to pay.

        Crane bought the Astros as an investor, not as a hobbyist.The primary goal of all investors is to make money.

      • djpostl - Aug 27, 2013 at 2:17 PM

        And the primary goal of revenue sharing/luxury tax rules is to not give two shits about that. It is SOLELY there to maintain a competitive balance.

        You actually think the other 29 owners want to subsidize his profits as he puts a joke of a team on the field?

    • jwbiii - Aug 26, 2013 at 9:15 PM

      No. In this economy, interest rates are very low. They were lower two years ago when Crane bought the team. He can make more investing that money than what he would save paying down his debt.

  12. bh192012 - Aug 26, 2013 at 7:52 PM

    Of course they could field a competitive team with 100 million. If they had thought to get decent FA pitching, say Colon, Lohse and Feldman they’d have a decent pitching staff for not a ton of money. There were other options as well, some more expensive some less so… all with varying degrees of success.

    On the offenseve side they certainly could have tried to land Napoli for 1st base. They should have kept Jed Lowrie. They could have picked up some combination of veteran 3B/DH types.

    For an extra 30 million they could also have fielded a competitive team.

  13. creek0512 - Aug 26, 2013 at 8:44 PM

    Yes, lets axe revenue sharing and introduce a salary cap/floor so baseball can end up like the NBA and NHL with a lockout/strike every 5 years when the CBA runs out.

  14. alexo0 - Aug 26, 2013 at 9:04 PM

    Of course they deny it. The last thing MLB owners want to do is give the players and local taxpayers the impression that they make money.

  15. jayquintana - Aug 26, 2013 at 10:29 PM

    Not very moral, but this is good business. Cry poverty, threaten to move, then have the taxpayers buy you a new stadium.

  16. eightyraw - Aug 26, 2013 at 10:51 PM

    A Forbes report on sports finances is inaccurate? Well I’ll be damned

    • jwbiii - Aug 26, 2013 at 11:14 PM

      Yeah, based on recent sales, their franchise valuations tend to be about 20% low.

  17. chill1184 - Aug 26, 2013 at 11:55 PM

    How about instead of the salary cap/floor why not introduce some actual auditing of teams. Doesn’t the league have an official thats supposed to keep teams in line? Why cant there be an independent comptroller that is assigned to each team and makes sure that revenues are actually put into the team for player development, organization expenses, etc?

    I think it would go a long way to filter out scumbag owners like Fred Wilpon and Jeff Loria but then again there is the Bud factor

    • jwbiii - Aug 27, 2013 at 12:26 PM

      Who would advocate for that? The owners like playing their financial games and crying poor when they need a few hundred million in welfare to build a new stadium. The owners hire, and can fire, the commissioner. The owners hold all of the power in MLB (except in matters related to the Players’ Association) and you think that they’re going to vote to be honest and accountable?

  18. rbj1 - Aug 27, 2013 at 8:34 AM

    Of course the Astros are going to deny. And with creative accounting it’s hard to tell who’s right.

  19. worstoftheworst - Aug 27, 2013 at 10:26 AM

    For any team to succeed consistently, it needs quality management. Gerry Hunsicker was the only guy the Astros had in the last 20 years who knew how to win. Drayton McClain thought anyone could do be a successful GM and here we are. Thanks Drayton.

  20. hansob - Aug 27, 2013 at 11:00 AM

    “The Astros will continue to operate the team in a fiscally responsible manner that will make the City of Houston proud”

    Because if there’s anything that makes a city proud of its baseball team, its fiscal responsibility.

  21. term3186 - Aug 27, 2013 at 11:21 AM

    This article seems pretty bogus. I’d love to see an actual breakdown off all the numbers Forbes used. Highest paid player is $1.15M? Maybe. But we still owe Wandy $5M. You can’t ignore other commitments when talking about $$$. Are they counting the entire $80M from Comcast? Because the Astros OWN half of Comcast. You can’t pay yourself $80M and pretend you just made a profit of $80M! Not to mention they’re LOSING tens of millions on the TV deal! Seems like creative accounting was used to create a shocking headline and clicks. One kinda expects better from Forbes.

    • stex52 - Aug 27, 2013 at 2:32 PM

      Agreed. I wouldn’t count the 80 MM$ from Comcast in the bank, because that joint venture may go bankrupt if they don’t get more coverage. That makes the overall analysis a little suspicious to me.

      Not like I’d expect a team to tell the truth anyway.

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