Top Menu

Jim Crane Makes Astros The Most Profitable Team In Baseball

Houston Astros Jim Crane makes the team most profitable in the NFL Currently, there is one player on the Houston Astros that is making over $1 million – pitcher Erik Bedard.  The Astros as a team have a record of 43-86, the worst in Major League Baseball.  Yet at the same time, the low payroll and soaring TV revenues are helping to make the team the most profitable in the league.  Astros’ owner Jim Crane has something to do with it as well.

Houston Astros are the most profitable team in baseball

Crane took over the team in 2011.  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.  Despite this fact, the team is estimated to pull in $99 million in operating income this season.  To give you an idea at where that figure stands around the league, that is nearly as much as the combined estimated operating income of the previous six World Series championship teams.  How do they do it?

Jim Crane cuts payroll expenses

Perhaps the slashed payroll is why the Astros have the worst record in Major League Baseball.  Over the course of this season, the team will pay its players an estimated $21 million in salary and bonuses. That is down $56 million from the 2011 season.

The Houston Astros have also cut active payroll to under $13 million, a league low.  To put that in perspective, the Yankees have nine players on their roster that are individually making more than the Astros.  Even so, Jim Crane expects that to change”

“Once our minor league system is filled in, we’ll move up into the top five or 10 in payroll.”

Crane has also taken part in “crowd pleasing”.  Since becoming the owner, he has introduced fan-friendly policies like allowing food and drinks into Minute Maid Park.  Fans cannot argue with that, nor can they argue about seeing their hometown Astros on SportsNet Houston.

One of the best TV deals in baseball

The more you read about sports rights, the more you realize how much of a game changer they can be.  The Astros current deal with Comcast is worth $80 million per year.  Not only that, but they are bringing in nearly $40 million from other television and radio deals.

The Astros own 45% of CSN Houston, the Rockets own 33%, and NBC Universal owns the rest. It is becoming increasingly common for sports teams to take equity stakes in the networks who buy their rights.  Derek Baine, an analyst at SNL Kagan who covers sports media, explains the situation:

“Sports rights are escalating astronomically, so ideally, on a team you want to be benefiting from anybody who is in there trying to take a piece of margin out of it.  It’s a way you can generate big fees while still capturing some of the upside if they ever get sold. Because when they get sold, they go for pretty big valuation also.”

Because the Astros are the majority stakeholder in the network, they absorb most of the $63 million lost by the network last year.  Those losses are in part due to a lower subscription rate in the Houston area.  Even so, the Astros would still have an estimated operating income of $71 million.

As the team looks to build for the future, owner Jim Crane can figure out exactly how and where he wants to spend the money they are making now.  It’s clear the team is doing well, even if they’re not doing so well.  What are your thoughts on rebuilding sports teams?

Photo credit – lukebox.wordpress.com

sports-networker_AFP_728x90

Latest Posts by Josh Hoffert

HUB_2197485b

The Olympic Games only come around every four years; not news to most.  But what happens to Olympic athletes and lesser known sports during those four long years? As Dr Andrea Eagleman explains, they are using social media to remain in the limelight. “Olympic sports and athletes are only in the spotlight every four years, but…

emirates2

It appears that Arsenal FC and Emirates have found a sweet spot in the mind of sports consumers in the UK. In REPUCOM’s Sponsorlink study, it was found that 88 percent of sports fans in the UK are aware that Emirates owns the naming rights to Arsenal’s home stadium.  Additionally, the shirt sponsorship between the two…

70a7a8bc-3a06-4a2a-b03e-968890d6e366_bowl-games-map2

Alas, it’s the season many college fans have been waiting for:  College Football Bowl Season.  And tis’ the season to give, right? In what has become a tradition, official “swag bag” lists for each bowl game have been released. In case you are wondering, those who participate in bowl games around the country are awarded…

securedownload

The NHL’s Winter Classic series has a short, yet storied six year history.  In years past, the event has been worthy of great promotions and marketing efforts. This year will be no different. As the rivalry between the Toronto Maple Leafs and the Detroit Red Wings gets a Winter Classic makeover, HBO cameras will be…

Nelson-Mandela’s-Top-Five-Contributions-to-Humanity

Top news in the #SportsBiz for the week includes a short write-up celebrating Nelson Mandela’s life.  News topics include Discover’s Fan Loyalty Poll, Cal football partnering with Kabam for a stadium naming rights deal, the MLS Final featuring two small market teams, and Levi’s stadium being loaded with technology.  To get a full dose of…

131204134959-sochi-olympics-snowboard-uniforms-us-burton-single-image-cut

“Look good feel good, feel good play good.”  This expression has been used over and over again within the sports world.  College athletes take this seriously, while action sports stars take it to heart. Fortunately for the US Olympic Snowboard team, Burton is behind the design of the new uniforms and they look oh-so-good. Heirloom…

mclaren-mp4-28-2013-formula-one-race-car_100417377_l

Sports Business is a world all its own.  The landscape of sports is constantly evolving, thus driving the business aspect to do the same. F1 is considered one of the front-runners when it comes to sponsorship and reaching a worldwide audience.  As a better way to engage that wide audience, F1 and their sponsors are…

fifa-ios-app

Speaking in regards to the Final Draw of the FIFA World Cup, set to take place on December 6, FIFA Secretary General Jérôme Valcke wrote: “On this day, Planet Football will have its eyes trained on Bahia’s Costa do Sauipe.  The group draw is in itself an event, with television audiences in the hundreds of…

maxresdefault

This week’s top news in #SportsBiz includes Andrew Luck and his not-so-typical endorsement deal with Klipsch. Other news includes Rivalry Week seeing a major increase in ticket prices, FIFA and Brazil experiencing a tragedy and a setback, apron advertising in the NBA, and Walmart advertising with Thanksgiving day football.  Get your #SportsBiz fix below. Sports…

thanksgiving-nfl-2013

Thanksgiving is a day of wild amounts of food, crazy family members, afternoon food-naps and the unpacking of seasonal decorations. But one thing brings everything together nicely – seemingly wrapping turkey-day in a big bow – NFL football. However football, like food, doesn’t just come served on a silver platter without the prep-work. It is…

, , , , , , , ,

One Response to Jim Crane Makes Astros The Most Profitable Team In Baseball

  1. premature ejaculation tips in hindi April 25, 2014 at 4:51 pm #

    First it really is sexual assault, then Savage suddenly switches to sexual harassment, they’re not the same!
    Now I? gotta see it myself. -_-

Leave a Reply