Story alleging Astros record profit margins "grossly inaccurate"


Maury Brown points out the problems in the story claiming the Astros will make $99 million this year written by his Forbes colleague.

The Dan Alexander story that appeared on claiming that the Houston Astros will make $99 million in operating income "has to be classified as grossly inaccurate," writes fellow Forbes writer Maury Brown.

Brown cites a number of reasons why Alexander's story is off-base. He reports that the Astros TV deal with Comcast SportsNet Houston is currently operating at a loss, while Fernandez's story stated that the RSN pays the Astros $80 million to televise their games. The Astros own a share of CSN Houston, and cannot get any other cable providers to pick up the network, according to Brown:

At this point in time, Comcast SportsNet Houston has no major carriage agreements with anyone outside of their own partner, Comcast. With start-up fees to get the regional sports network off the ground, the fledgling RSN is running at a loss. Not only do my sources in the broadcast industry say that cash calls for CSN Houston have already taken place, other reports speak to how difficult gaining carriage is, and will likely, continue to be.

The RSN may be profitable in the future, but likely will not pay the Astros $80 million per season in the future, sources have told Brown. Alexander also did not account for start-up costs and that local rights fees are subject to revenue sharing when estimating the Astros operating income, which would further cut in to the money earned from the RSN.

Astros owner Jim Crane called the report "not even close to being accurate," and Brown's article supports the owner's claim.

Brown and Crane also point out that the Astros low payroll is by design. Houston has slashed costs at the major-league level while improving the team's farm system, which was one of the league's worst when Crane took over in 2011. When the Astros start to reap the benefits from the farm system, Crane has pledged the team will start spending more money.

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