Financial Crunch

Houston Astros confront tough decisions as revenue takes a hit

Houston Astros confront tough decisions as revenue takes a hit
Teams are reportedly calling about Framber Valdez and his availability. Composite Getty Image.

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.

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