Stark on Wandy

[MusicMan]

One of the questions reverberating around baseball since the trading deadline is: Why the heck did the Astros sign Wandy Rodriguez to that three-year, $32.5 million contract a little over six months ago if there was ANY chance they'd be trying to unload him -- and that contract -- a few months later?

It's easy to say now that things are different, because this team is 39 games under .500, sinking fast and about to get sold. But the club was ALREADY up for sale. And Jim Crane -- a man whose No. 1 item on the to-do list is cutting payroll -- was considered the most likely buyer even then.

"That contract just doesn't make sense now," said an executive of one club. "It's OK if you intend to keep him. But not if you're in a feeding frenzy to slash payroll."

Initially, it looked as if the Astros were attempting to trim the payroll for next season from about $71 million to $60 million. But now, with the completion of the sale of the team only a week away, other clubs are hearing Crane might attempt to drive that number down to $50 million or even below. And they can't reach that figure without moving Wandy Rodriguez.

"I just don't get it," said the same exec quoted above. "When you give a guy a contract like that, you're basically saying, 'We're not going to trade you.' Well, they're not saying that anymore."

[subnuclear]

But now, with the completion of the sale of the team only a week away, other clubs are hearing Crane might attempt to drive that number down to $50 million or even below.

Jim Crane is not really winning me over at this point.

[Navin R Johnson]

Well he has investors to feed, a bunch of them.  Some of the stuff I have heard/read almost makes me wish MLB would turn him down.  Of course if that happened I have no idea who would be in any better position or want to spend 700 million on this team.

[BudGirl]

Jim Crane is not really winning me over at this point.

He hasn't done anything yet to win or lose you yet.

Seems some people wanted the team to sell, they got it and now they don't like it.

[jbm]

I've never understood the criticism of his contract in general terms.  It seems like a fair price given his track record.  Probably less than if he had went into free agency.

If they are specifically being critical of the option that turns into a player option upon trade, then I understand, but the critics should be more specific.  Even with that option, the contract doesn't seem that bad, as long as he stays healthy, which of course applies to every pitcher's contract.  

btw.  When Wade signed Wandy, he couldn't have known that the new buyer would aim to slash payroll.  it would be a stupid thing to assume, IMO.

[jbm]

Well he has investors to feed, a bunch of them.  Some of the stuff I have heard/read almost makes me wish MLB would turn him down.  Of course if that happened I have no idea who would be in any better position or want to spend 700 million on this team.

What have you heard or read that gives you pasue?

If Crane walks into the owner's meeting and hears a veiled threat that his approval is conditioned on the AL move, and responds with a big ol "fuck you, you are free to disapprove me," then he will have gained a lot of respect in my eyes.

[subnuclear]

He hasn't done anything yet to win or lose you yet.

Seems some people wanted the team to sell, they got it and now they don't like it.

You are right, of course, but $50 million seems like a low ceiling in this market.

[MusicMan]

You are right, of course, but $50 million seems like a low ceiling in this market.

This is a reverse auction game of telephone.

"I heard he's cutting to $70M"
"Well, I heard he's cutting to $60M"
"Well, I heard he's releasing every player and asking fans to volunteer for each game."

[geezerdonk]

"Well, I heard he's releasing every player and asking fans to volunteer for each game."

Put me down for bull pen catcher.

[S.P. Rodriguez]

This is a reverse auction game of telephone.

"I heard he's cutting to $70M"
"Well, I heard he's cutting to $60M"
"Well, I heard he's releasing every player and asking fans to volunteer for each game."

I could be wrong, but the last sentence does not translate to payroll reduction, just roster reduction.  

[Reuben]

"other clubs are hearing Crane might attempt to drive that number down to $50 million or even below" sounds an awful lot like rumor-mongering by teams that want to get Wandy at a discount, or some random person who just hates the Astros (ahem*jonheyman*cough). I mean, why the hell would Crane or anyone with the Astros leak this info? It only weakens their bargaining power, as teams will know they're desperate to dump Wandy's contract. The $60 mil number has already arguably weakened their bargaining power in the Bourn and Pence trades.

[jbm]

Is it possible that the leak is really from Crane, in order to let MLB know that his debt levels will be manageable in the near term.  That might make the "he has too much debt to approve him" camp's argument a bit weaker. 

[astrosfan76]

I've never understood the criticism of his contract in general terms.  It seems like a fair price given his track record.  Probably less than if he had went into free agency.

If they are specifically being critical of the option that turns into a player option upon trade, then I understand, but the critics should be more specific.  Even with that option, the contract doesn't seem that bad, as long as he stays healthy, which of course applies to every pitcher's contract.  

btw.  When Wade signed Wandy, he couldn't have known that the new buyer would aim to slash payroll.  it would be a stupid thing to assume, IMO.

After a strong finish to '10, it wasn't illogical for Wade to try to build off that.  If we were going to be decent this season, pitching was going to be our backbone.  Wandy was our best starter, so Wade locked him up for market value.  At the time of his contract, no one was reporting about the deal being an issue, it's only been now in the unforeseen future.  

[Navin R Johnson]

What have you heard or read that gives you pasue?

The debt and the influence some of the investors have and how much money they expect to make. 

I just question how buying this team for 700 million is gonna be a big money maker, unless they find a way to consistently win with a $~60 million payroll.

Drayton cashed in on a stadium, and a boondoggle TV deal.  Those 2 things significantly impacted the value of the franchise.  What is left that Crane do to to significantly increase the value of the franchise?   And if all his investors are demanding/expecting an immediate ROI, how does he react.

[MusicMan]

What is left that Crane do to to significantly increase the value of the franchise?   

I guess there's only one thing left to do:

Win the whole fucking thing.

[strosrays]

Drayton cashed in on a stadium, and a boondoggle TV deal.  Those 2 things significantly impacted the value of the franchise.  What is left that Crane do to to significantly increase the value of the franchise? 

There are a lot more things that could be tied to marketing deals.  "Well, that long fly ball was run down by Michael Bourn Jason Bourgeois at the foot of Boone's Farm Strawberry Hill in center field, right next to the Viagra flagpole . . . "

[MusicMan]

There are a lot more things that could be tied to marketing deals.  "Well, that long fly ball was run down by Michael Bourn Jason Bourgeois at the foot of Boone's Farm Strawberry Hill in center field, right next to the Viagra flagpole . . . "

"Climb that Boone's, baby! Oh yeaaahhhh!!"

[94CougarGrad]

This is a reverse auction game of telephone.

"I heard he's cutting to $70M"
"Well, I heard he's cutting to $60M"
"Well, I heard he's releasing every player and asking fans to volunteer for each game."

Et tu, 12th Man?

[roadrunner]

Et tu, 12th Man?

Well if you're pretty much guaranteed to lose 100+ games for the next 2-3 years, I don't blame him for doing it as cheaply as possible.

[The Spleen]

Is this 50-60 million dollar payroll supposed to be a temporary measure at the bottom of a rebuilding cycle (perfectly reasonable) or a permanent policy (totally insane)?

Why would Crane struggle so long and so hard to get an MLB franchise and then just put the the thing up on blocks and throw a tarp over it once he finally has it?

[BizidyDizidy]

SI_JonHeyman Jon Heyman
As of this morning, neither wandy rodriguez nor heath bell had been sent thru waivers. Execs believe wandy wil clear but not heath

[jbm]

Is this 50-60 million dollar payroll supposed to be a temporary measure at the bottom of a rebuilding cycle (perfectly reasonable) or a permanent policy (totally insane)?

Why would Crane struggle so long and so hard to get an MLB franchise and then just put the the thing up on blocks and throw a tarp over it once he finally has it?

I assume temporary, but I guess NRJ's hearing that there might be some pressure from the partners to make it more permanent, or at least until a large part of the debt is payed off.

I don't understand the business of baseball (revenues, costs, etc) nor do I have any data to look at if I did understand it.  However, I have always assumed the network was a big asset and the potential of that asset depends on having desirable content.  In short, I assume there is a strong financial incentive to take the purchase out on the road.

[Navin R Johnson]

Is this 50-60 million dollar payroll supposed to be a temporary measure at the bottom of a rebuilding cycle (perfectly reasonable) or a permanent policy (totally insane)?

That is the real question.  I don't begrudge him for stripping it down to $50 or $40 today, although the people who are pissed at the Bourn/Hunter trades certainly do.  But once the team gets remotely competitive again and some of these young guys come up for arbitration or free agency is he going to be willing to take the payroll up several notches?  Will his investors/creditors allow him?

[The Spleen]

So the concern is that Crane will have to keep the franchise locked down with a minimal payroll for a set number of years (making a profit by leeching revenue sharing payments) until the debt is paid down and he is finally ready to compete... and that this timeline will have nothing to do with on-field issues, personnel or available talent?

[roadrunner]

He's stated he wants to build through the draft and development.  That isn't necessarily mutually exclusive with spending money through free agency, but given the state of the organization avoiding and getting rid of big contracts is probably the prudent (and wise) strategy.

[Greg M]

He's stated he wants to build through the draft and development.  That isn't necessarily mutually exclusive with spending money through free agency, but given the state of the organization avoiding and getting rid of big contracts is probably the prudent (and wise) strategy.

Now all he needs is the Hun.

[Arky Vaughan]

It's inconceivable that the investors spent that much money on the team with the long term goal of keeping it with one of the lowest and least competitive payrolls in baseball. A more likely scenario, as people have observed, is that they believe it makes no sense to spend $120 million right now when the team is rebuilding. By clearing payroll for the next couple of seasons as talent develops, they will be in a better position to afford veterans to fit in with the rebuilding then. Let's say in 2013 or 2014 they've identified some young guys who can play at this level and they have $60 million to drop in the free-agent market. That sounds pretty good to me.

[roadrunner]

I'd be more worried if he wanted to increase payroll....or even keep it as is

[strosrays]

I don't understand the business of baseball (revenues, costs, etc) nor do I have any data to look at if I did understand it.  However, I have always assumed the network was a big asset and the potential of that asset depends on having desirable content.  In short, I assume there is a strong financial incentive to take the purchase out on the road.

Anyone who buys a baseball team with the idea they'll run it like their other businesses and make a profit is retarded.  There are a lot of reasons why a baseball team is different than a regular business; for one thing, you can't chainsaw your roster to save money without having a whole city on your ass fror trading away a chance to win now.  Its the whole 'public trust' thing.  Some owners grate at that; but if they don't get it about the public trust, they shouldn't own a team anyway.

Baseball teams can be profitable, but that is not how they are judged to be successful.  It is a rare owner, I think, who can both make a tidy profit and have a consistently winning team.  It is often hard to know much about the ones who do, because they often stay in the background.  I am always struck how a guy who obviously has business savvy (he made enough money to buy a team, or at least can finance the ownership of one) can buy a baseball team and then do everything wrong.  David Glass in KC (Drayton's friend) never figured it out.  What happened?

This is why I think Drayton was an above average owner.  I don't like him and I wish he would have stayed in the background more, but he kept a tight rein on the spending until it seemed necessary to splurge, and then he just did it.  Every time.  I don't blame him for what is happening now.  As everyone is saying, it makes no sense to spend big money at this point.  The key now is how good the player development people are at their jobs.

[subnuclear]

I'd be more worried if he wanted to increase payroll....or even keep it as is

If you can get good players for Wandy then go ahead and trade him, but if not he is not hurting anyone by continue to play here and help this team. Its idiotic just to trade him to dump salary.

[Navin R Johnson]

It's inconceivable that the investors spent that much money on the team with the long term goal of keeping it with one of the lowest and least competitive payrolls in baseball. A more likely scenario, as people have observed, is that they believe it makes no sense to spend $120 million right now when the team is rebuilding. By clearing payroll for the next couple of seasons as talent develops, they will be in a better position to afford veterans to fit in with the rebuilding then. Let's say in 2013 or 2014 they've identified some young guys who can play at this level and they have $60 million to drop in the free-agent market. That sounds pretty good to me.

I sure hope you are correct.  I am all for trimming the payroll to $50 million and investing in the farm system.  They are gonna have a #1 pick to sign, which will cost a good amount.

So if they are planning to spend money, but don't want to sink it into dead a season (like 2012 will be), then we should expect them to reallocate some of that money into the amateur draft and international signings, right?

[Waldo]

Drayton cashed in on a stadium, and a boondoggle TV deal.  Those 2 things significantly impacted the value of the franchise.

Since I don't know how stuff like that works:

Does leasing a new stadium directly affect the value of the Astros, or is it only the trickle-down benefits (such as the early 2000s attendance boom, marketing opportunities, etc.) that come with having a new stadium?  I could understand it if the Astros actually owned MMPUS, but since that's not the case is it more qualitative than quantitative?

[BizidyDizidy]

Since I don't know how stuff like that works:

Does leasing a new stadium directly affect the value of the Astros, or is it only the trickle-down benefits (such as the early 2000s attendance boom, marketing opportunities, etc.) that come with having a new stadium?  I could understand it if the Astros actually owned MMPUS, but since that's not the case is it more qualitative than quantitative?

The lease is 4.6MM a year on a 250MM building plus some capital improvement holdback (c.f. all the new shit they put in this year); thats extremely cheap (<2% cap rate) when market is 8% or so; that's $15MM+ a year in value transfer from Harris County to Astros owner.

[Waldo]

The lease is 4.6MM a year on a 250MM building plus some capital improvement holdback (c.f. all the new shit they put in this year); thats extremely cheap (<2% cap rate) when market is 8% or so; that's $15MM+ a year in value transfer from Harris County to Astros owner.

So over the 30-year term of the lease that translates to a $450 million increase in the Astros' value?

I just didn't know if they could claim their lease payments as part of their "value".

[BizidyDizidy]

So over the 30-year term of the lease that translates to a $450 million increase in the Astros' value?

I just didn't know if they could claim their lease payments as part of their "value".

In nominal dollars - probably closer to something like 150-200MM in today's dollars. It increases their value directly because it improves the cash flow to the owner.

[Navin R Johnson]

It increases their value directly because it improves the cash flow to the owner.

Exactly.  MMP is a state of the art cash cow, just ask the fowl poles.

[Waldo]

Exactly.  MMP is a state of the art cash cow, just ask the fowl poles.

Which was my point about the trickle-down benefits.  I just didn't know if the building itself contributed to the Astros' value.

[HudsonHawk]

Which was my point about the trickle-down benefits.  I just didn't know if the building itself contributed to the Astros' value.

The building itself doesn't, the use of said building does.