SBD/August 27, 2013/Franchises

Astros' Ryan Disputes Reports Of $99M Operating Income, Says Team Isn't Profitable

Ryan says there is no doubt the figures in the Forbes report are wrong
Astros President of Business Operations Reid Ryan yesterday "took issue" with a report from Forbes magazine that stated the team is "on track to make" $99M in operating income this season, according to Reid Laymance of the HOUSTON CHRONICLE. Ryan, without offering a figure to counter the report, said, "We’re going to have expenses that are higher than our revenues, and that doesn’t make (the team) profitable. ... There is no doubt that the numbers are wrong in the Forbes article. If they were right, I’d look like the guy who had done the best job in three months ever (since taking the job in May). The fact is that the numbers are wrong" (CHRON.com, 8/26). FORBES.com's Dan Alexander in the original report wrote under the header, "2013 Houston Astros: Baseball's Worst Team Is The Most Profitable In History." The Astros have "become so profitable thanks to slashed payroll expenses and soaring television revenues." The Astros opened this season with an MLB-low $26M active payroll "and have since cut it to under" $13M. Alexander reported Comcast SportsNet Houston pays the Astros $80M a year, and the team brings in nearly $40M "from other television and radio deals" (FORBES.com, 8/26).

OFFICIAL DENIAL: The Astros last night released a statement that read in part, "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 statement continued, "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" (Astros). The Dallas Morning News' Tim Cowlishaw said Astros GM Jeff Luhnow "knows what he's doing," adding the team has "a great farm system and now they can build and make even more money.” ESPN’s J.A. Adande: “It’s like ‘The Producers': Sometimes there’s more money to be made in a flop than in a hit” (“Around the Horn,” ESPN, 8/26).
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