|Wednesday, July 17
Astros owner says financial losses could drive him away
HOUSTON -- The owner of the Houston Astros says he's through with baseball unless a labor contract is approved that assures a system more equitable to mid- and small-market franchises such as his.
Drayton McLane Jr. said he has lost about $105 million since buying the franchise for $115 million in 1993. He is projecting losses of at least $5 million this season.
"I have clearly said that there has to be a solution when we sign the new agreement -- whether it's signed in two months or two years,'' he was quoted in Wednesday's editions of the Houston Chronicle. "There has to be a new system. Otherwise, there's no point in me staying in.''
He was asked specifically if he intends to sell the franchise if he isn't happy with the new labor agreement that emerges.
"Absolutely. There's no point. What makes it no fun are the financial losses. Here we are trying to beat the Arizona Diamondbacks, the Los Angeles Dodgers, the New York Mets and the Atlanta Braves, and all those teams have payrolls of $90 million or better,'' McLane said.
"We've got a $64.7 million payroll. And based on that $64.7 million payroll, we're going to lose about $14.5 million this season (after depreciation and amortization are figured, the actual cash loss will be around $5 million).''
McLane said he doesn't want to leave baseball. He said that, unlike previous negotiations, he thinks the owners are unified enough to gain concessions from the Major League Players Association as negotiations enter a critical phase.
"I'm an optimist by nature,'' he said. "When you have 30 owners, you have people with a lot of different interests, but the commissioner has the power to make a deal.''
McLane's message is one he's hearing from a lot of owners, baseball commissioner Bud Selig said.
"I hear it all day long. I know the kind of money Drayton has lost. I know certain people will dispute the numbers, but they're real,'' the Chronicle quoted Selig as saying. "When people without an agenda examine the numbers, they come to the same conclusion.''
At issue is the disparity that developed during the 1990s as construction of new ballparks and signing of lucrative cable television contracts created a gulf between teams at the top like the Yankees and Mets and teams at the bottom like the Twins and Royals.
"When we first got here,'' McLane said, "the top teams were the Yankees and Mets at around $110-$130 million in revenues. I thought, `Man, if I can get $130 million in revenues, we're going to run with the big boys.' We moved into the new stadium, and all of a sudden, we had revenues of $135 million. Unfortunately, our expenses, especially our salaries, also went up.''
The current labor agreement expired after last season, but following the Sept. 11 attacks, owners and players agreed to play one more year under the old system.
Teams share about 20 percent of their local revenues. Owners would like to increase that amount to 50 percent. Players, fearing a drag on salaries now averaging $2.4 million per year, have offered to increase shared revenues to 22.5 percent.
Owners also are insisting on a 50 percent luxury tax on payrolls above $98 million. Players are against a luxury tax. Other issues, like a worldwide draft and steroid testing, are on the table, but revenue sharing and the luxury tax are the primary issues.