Monday, March 24, 2014

Jim Crane's secrets to successfully running a baseball team (into the ground)

Well, as we get nearer and nearer to the real Opening Day in Cincinnati, it's probably about time we took a little time to look at the prospects of our beloved Houston Disastros. The club is coming off an unbelievable three-year run of 100+ losses and looking to make it four-in-a-row.

But where to begin? First we have Jim Crane dealing with the grease fire that is the sports network the Astros set up with the Rockets and Comcast. The teams got together to create their own regional sports network because they thought the rights fees Fox was paying wasn't what the market would bear.

The Rockets have been a mediocre team for years and, while popular, the asking price for cable and satellite companies to carry Rockets' games was, shall we say, on the pricey side. As for the Astros - let's just say when you've had back-to-back 100+ loss seasons you aren't exactly bargaining from the best position.

The sports network is now in bankruptcy and Jim Crane is attempting to get the Astros out from under the wreckage while the Rockets are hoping a carriage deal will be worked out through the bankruptcy proceedings. As things stand currently, only about 40% of the Houston market has access to the channel.

This thing spiraled out of control because the Astros got greedy. The former owner, Drayton McLane, got the ball rolling figuring the team could make more money selling commercials during the broadcasts than by selling the television package to a third party. But the situation was a bit more complicated than that.

The Astros and the Rockets both own roughly 40% of the network and Comcast owns the remaining portion. The network was supposed to pay the rights fees to the teams and broadcast the games. To date the network owes millions of dollars to both teams in unpaid broadcast rights fees - but the network doesn't owe the teams nearly the amount they claim because both teams are, to some degree, paying themselves to broadcast the games.

The Astros also find themselves in hot water over the way they've treated young outfield hotshot George Springer. Mr. Springer was Houston's most potent AAA player last year and should have been playing on the expanded 40-man roster in September. But, instead, he found himself playing in Oklahoma City as the season wound to an end. It was just a bit odd that a team struggling to beat anyone down the stretch would leave their best prospect off the roster when the season was already a lost cause. Even more odd is that Mr. Springer was optioned back down to Oklahoma City during spring training when the Astros are looking at another cellar-run in 2014. Something just wasn't adding up.

It turns out that the Astros offered Mr. Springer a 7-year contract worth about $23 million in September. The deal was intended to lock in Mr. Springer for a number of years at a (fairly) low cost. Mr. Springer turned down the offer because he didn't want to get stuck in a very team-friendly contract throughout his 20's. He wanted a shorter deal for more money so that he would have a chance to test the free agency waters as he was hitting his prime.

But once he rejected the Astros' offer, Mr. Springer was left at AAA while the dumpster fire that was the 2013 Houston Astros continued to burn. One reason for leaving Mr. Springer off the expanded roster in September was to keep his major league service days low in order to keep him from becoming "arbitration-eligible" a year before the Astros wanted. Now the Players' Association is looking into the way the Astros handled the situation. The interesting thing is that Mr. Springer was never a member of the union because he had never played in a major league contest during the regular season.

Finally, after purchasing a mini-ticket package last season I was looking forward to doing it again this year. My package included Opening Day and one game a month during the season. Our seats were in the mezzanine in center field right underneath the giant scoreboard. But when I got a call from a ticket rep back in January I was disappointed to find that the package I subscribed to last year wasn't being offered this season. There was another package that included Opening Day (which has become a tradition for my oldest daughter) but something wasn't right.

For one, seats in the mezzanine area weren't being offered. The other problem was the price. When the ticket rep asked me if I'd be interested in signing up for the new package I asked her if the Astros were still charging "dynamic" pricing for the package (which means more money for games against popular teams and a shitload more for Opening Day). She told me that they weren't.

But when I went to the Astros website I found a different story. For more that what I paid last year for my package I could get the new package in worse seats. For a lot more I could get tickets in good seats. I told her thanks, but no thanks. I've got better things to do with my money that pay more money to see a crappy team. So, for the first time in about five years, my oldest daughter and I will not be attending Opening Day. Thanks, Jim Crane.

Crane's idea of operating a baseball team is to bleed everyone dry bit-by-bit. As I wrote last year, so-called dynamic pricing is a way to squeeze more money out of fans to see the away team. Strangely enough, even though the prices go up when a popular team comes to town, they never drop below the base value when a dog comes to town to play - even though there will be thousands of empty seats when the dregs of the American League set foot on the field.

I figure there's no way in hell the Astros will lose 100+ games for a fourth year running. I think they can knock the loss total into the 90's this season (which is still nothing to be proud of). But I do predict that Jim Crane will make out like a bandit thanks to the network television money that is divided up among the teams. So long as the Astros' payroll is under $45 million, Jim Crane will make money without selling a single ticket.

And that is Jim Crane's definition of success.

No comments: