Financial Crunch
Houston Astros confront tough decisions as revenue takes a hit
Dec 19, 2023, 2:43 pm
Financial Crunch
So why is a baseball team in America’s fourth-largest city, with the local economy booming, that plays in a clean, comfortable stadium with lots of parking, that charges the 5th-highest prices for tickets, beer and hot dogs, the value of the team has nearly quadrupled, and is riding a dynasty of success on the field … singing the blues over money problems and the general manager was practically wearing a barrel and suspenders at baseball’s winter meetings?
It all comes down to local TV revenue, where the Astros are closer to the small market Brewers and Marlins than they are to the Yankees and Dodgers. Because the Astros had to create a new TV network – Space City Home Network — in partnership with the Houston Rockets due to the demise of AT&T SportsNet SW, the team’s broadcast revenue is expected to drop by tens of millions of dollars. Make that many tens of millions of dollars.
With revenue taking a hit like that, something has to give, and it will be the Astros payroll. That’s why the Astros have all but admitted they will say goodbye to Alex Bregman when his contract expires at the end of the next season, and No. 2 starter Framber Valdez could reportedly be available in a trade.
The Astros payroll currently sits at just above the MLB luxury tax threshold of $273 million, with Kyle Tucker’s big-ticket future with the Astros looming. The Astros have busted the luxury tax paywall only once since Jim Crane bought the Astros in 2011.
According to Forbes, the value of the Astros stands at $2.25 billion, almost four times what Crane paid for the team. Big Macs and homes in West University Place haven’t gone up that much.
We know the numbers by heart: since 2017 the Astros have won six American League West titles, seven ALCS appearances, four World Series appearances, two championships. The Astros drew more than 3 million fans paying premium prices to root, root, root for the home team.
I used to tell my Little League teams, you guys are so lucky to be born when you did. You get to watch an incredibly talented baseball team with great players who do nothing except win the past seven seasons.
There are less fortunate kids who live in cities where the team plays like Bizarro Astros. Imagine if you had to watch the Kansas City Royals or Detroit Tigers those same seven years. Both are riding seven-year streaks of losing records. And their best players get the hell out of Dodge the minute they can.
Yes, the Astros have lost a bundle of top stars in recent years without making a sincere effort to keep them. Carlos Correa, Justin Verlander, Gerrit Cole, George Springer, Charlie Morton and others left Houston for greener – as in money – pastures. But somehow the Astros found new stars to replace them and kept winning.
We still have Jose Altuve, Tucker, Verlander, Valdez, Bregman, Pena, Pressly, McCormick and more. We, the Astros, should be all right for 2024. To infinity and beyond? That’s another question.
One prediction guaranteed to come true next season: if you attend an Astros game and get a hankering for a beer and a dog … check your credit card limit first.
There's no denying that this year's World Series champs (LA Dodgers) have some serious firepower on their roster. And one of the ways they were able to assemble such a talented team involved players like Shohei Ohtani being willing to differ their money.
Just this week, there was some speculation that the Yankees could do something similar when restructuring Gerrit Cole's contract, that would allow them more flexibility in the present.
The Yankees ended up calling Cole's bluff about opting out, and no adjustment was made to the contract.
But this situation got us thinking, would the Astros consider a tactic like this to maximize the roster? At this point, it doesn't seem all that likely. Just last year, the team handed out a $95 million contract to Josh Hader, without any differed money.
The other factor that also has to come into play is the tax threshold. The organization would have to give the okay to go over it again in order to make a splash signing this offseason. Which unfortunately does not sound like the plan right now when listening to GM Dana Brown at the Winter Meetings.
Astros pitcher hires a new agent
Now that MLB free agency is in full swing, most of the attention moving forward will be focused on players like Alex Bregman, Pete Alonso, and Juan Soto.
But for Astros fans, there might be someone else to keep an eye on this offseason and next. Starting pitcher Hunter Brown quietly hired super agent Scott Boras recently.
With Brown still another season away from his first year of arbitration, he should be with the Astros for the foreseeable future.
However, the hiring of Boras does raise some interesting questions. Why make the move now? Certainly, Brown could use some more cash, as he's set to make less than a million in 2025.
Perhaps Brown wants to land some HEB commercials to fatten his wallet. And if Bregman does leave the team in free agency, a spot will open up for another player, in theory. And three of the players in the HEB ads are represented by Boras (Jose Altuve, Lance McCullers Jr. and Bregman).
Jeremy Pena has been stacking cash from Taquerias Arandas for several years now, maybe Brown would like an opportunity to do an endorsement similar to that.
I say all this half kidding, but Brown does look like the future ace of this staff, and I'm sure there are plenty of advertisers that would have interest in Hunter.
There is another element that could have initiated the hiring of Boras. Would Brown be willing to sign an extension early with the Astros similar to the deal the team made with Cristian Javier?
Their situations are actually pretty comparable, except Javier was one year further into his career (3 years of MLB service time) and eligible for arbitration before agreeing to the extension.
If Brown was heading into arbitration this offseason, it wouldn't be surprising at all for the Astros to be considering a long-term deal with him that buys up all his arbitration years. The 'Stros love these types of contract extensions. We've seen them do it with Bregman, the aforementioned Javier, and others.
One of the main differences though between Brown and Javier is their rookie year numbers. Brown only pitched 20.1 innings in his first season (2022). While Javier pitched 54.1 innings his rookie year. However, his rookie season was in 2020, so Javier completed a full year of service time despite the shortened season. Whereas Brown didn't get called up until September 2022.
Another difference is performance. Javier never posted an ERA over 3.55 in his first three seasons. As opposed to Brown, who had a disastrous year in 2023. He made 29 starts, recording an ERA over 5.
It wasn't until May of 2024 that Brown started using his two-seam fastball with great success and becoming one of the most dominant pitchers in the American League.
The Astros had a bigger sample size to judge Javier. However, if Brown has another quality season in 2025, Houston and Brown should definitely be having conversations about an extension. Especially with Framber Valdez being in the final year of his contract in 2025. Hunter could be the unquestioned ace one year from now.
Still, though, there are some concerns with handing out these early extensions. For example, if the Astros had it to do over again, would they still extend Javier?
After receiving his extension before the 2023 season, he went on to post the highest ERA of his career (4.56), and then blew out his elbow in May 2024.
And if we're going by Luis Garcia's recovery timeline from Tommy John surgery, we may not see Javier pitch at all in 2025.
So even with a sample size of three terrific seasons, the Javier extension looks like a miss with the benefit of hindsight. It will be interesting to see if that deal impacts Dana Brown's decision-making going forward.
Especially since Javier was Dana's first big contract extension as the Astros GM.
Be sure to watch the video as we discuss how the Astros can get the most out of their roster, the pros and cons of signing Hunter Brown early, and much more!
*Catch our weekly Stone Cold ‘Stros podcasts. Brandon Strange, Josh Jordan, and Charlie Pallilo discuss varied Astros topics. The post for the week generally goes up Monday afternoon. Find all via The SportsMap HOU YouTube channel or listen to episodes in their entirety at Apple, Spotify or wherever you get your podcasts.
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