When Will The Astros Start Spending On Major League Payroll?

This week started with some hullabaloo when a Forbes contributor published a column claiming that the Houston Astros were the most profitable team in MLB history. Contributor Dan Alexander did some pretty simple math in concluding that the Astros would clear $99 million in “operating revenue.” “They have become so profitable thanks to slashed payroll expenses and soaring television revenues,” Alexander wrote.

But another Forbes contributor —  Maury Brown, of the Biz of Baseball — refuted Alexander’s column. Brown explained the Astros “soaring television revenues” aren’t so soaring because CSN Houston — the new regional sports network the Astros and the NBA’s Houston Rockets own — isn’t carried on any cable or satellite service in the Houston area other than Comcast. Indeed, we reported last month that cable and satellite companies are using new technology to determine how many customers tune into local sporting events and for how long. AT&T U-verse used that information in deciding to forgo carrying CSN Houston. That’s left CSN Houston well short of projected viewership and revenue from carriage fees.

Brown also takes his Forbes colleague to task for describing the Astros and owner Jim Crane as profiteers. Crane hasn’t stripped the major-league payroll down to $13 million as a means to make quick cash, but as part of a system-wide rebuilding process.

The premise by which Crane and General Manager Jeff Luhnow are operating works like this: the minor league system was rated one of the worst when Crane purchased the Astros, and player contracts at the Major League level were inefficient in terms of gaining wins for the salary being spent. In a case of “pulling the Band-Aid off quickly,” MLB player payroll has been stripped to the axles and emphasis has been placed on building up the minor league system. The Astros organization now has playoff teams at all four levels of the full-season minors (Oklahoma City, Corpus Christi, Lancaster, Quad Cities).

The question then becomes: When will the Astros start spending again on their major-league roster and how much will they spend?

Earlier this season, ESPN The Magazine’s Molly Knight spoke to Jim Crane and asked him the “when” question. Knight wrote:

Crane insists he’ll loosen the purse strings once the team begins to win. “We’ll spend the money when it’s time, but right now is not the time,” he says. “Once our minor league system is filled in, we’ll move up into the top five or 10 in payroll.”

“Filling in” a minor-league system and winning at the major-league level are not the same thing, of course. And the former is much more difficult to measure than the latter. It’s pretty clear the “winning” hasn’t happened yet. Heading into Thursday’s game, the Astros are 44-88, leading the Marlins by 4.5 games for the worst record in the majors.

On the “how much” question, Maury Brown wrote in Forbes: “Along the way, Crane has said that he will not spend more than 50% of revenues on MLB player payroll, something that Commissioner Selig has said he’d like to see of all owners, as well.”  As we wrote in January, that trend has already taken hold in MLB, as revenues have far outpaced payroll spending since 2003.

The Astros aren’t the first team to undertake a rebuilding process, although no team  – not even the Marlins — has stripped its major-league payroll to $13 million in the past 15 years. Still, it’s interesting to look at teams that have dropped payroll significantly and see how long it took them to return to prior spending levels.

For that, I turned to the new and indispensable MLB Payroll interactive charts by Phil Roth. (Dave Cameron highlighted this amazing tool a few weeks ago.) Roth used data from Baseball-Reference and Cot’s Contracts to build payroll charts for each team, from 1998 to 2013.  I identified 10 teams other than the current Astros that shed significant payroll expenditures for at least one season.

Four teams faced financial instability that either led to, or was the result of, a change in ownership: Rangers, Nationals, Padres and Cubs.


Of those teams, it took the Rangers the longest (from 2004 to 2011) for the payroll to rise close to prior levels, but it took less time for the Rangers to produce a winning season. They did that in 2009, for the first time since 2004.


The Nationals’ payroll dipped sharply in 2007, the first full season after Ted Lerner purchased the team. But the dip was only for that season, and payroll has been climbing steadily ever since. Last year, the Nationals had their first winning season since 2003, back when they were the Montreal Expos.


The Padres had several expensive veterans on the 2008 roster, including Greg Maddux, Trevor Hoffman and Jim Edmonds. Those players were gone in 2009, which kicked off a four-year period of reduced payroll. The Padres came within a game of the postseason in 2010, but that’s their only winning season since 2007.


The Cubs were sold to the Ricketts family in 2009, but it wasn’t until the new owners brought in Theo Epstein and Jed Hoyer to run baseball operations that payroll plummeted. Like the Astros, the Cubs are undertaking a significant rebuild. The Cubs’ last winning season was 2009.

The Mets are also facing financial difficulties, as a result of the Wilpons’ involvement with Bernie Madoff. There’s no ownership change in sight, but there are substantial controls on the purses strings now.


The Orioles, Indians and Blue Jays saw their payrolls drop substantially after sustained runs of success came to an end.


The Orioles were two games from the World Series in 1997, but then suffered 14 consecutive losing seasons. Payroll took a hit from 2001 to 2004, and again in 2008.


The Indians were riding high in the late 1990s, with a power-hitting lineup and a gleaming new ballpark. Cleveland played in the postseason six out of seven years, from 1995 to 2001. When performance fell off in 2002, the payroll followed the next season, and didn’t regain 2001 levels until 2008.


The Blue Jays have had eight winning seasons since they won the World Series in 1993, but haven’t made the postseason in the past 20 years. Playing in the American League East hasn’t helped, of course. And if this season is any guide, spending and spending and spending may not be the answer, either.

That leaves the Royals and the Marlins.


The Royals have had four winning seasons in the past 20 years and haven’t played in the postseason since 1985. Yet the payroll has risen — with yearly fluctuations expected for a small-market team. Spending shot up considerably in 2007 and again in 2009, only to drop precipitously in 2011. But in two years, the payroll is up again. Way up, to the highest levels in team history.


You probably pictured the Marlins graph in your head. Their boom and bust cycles are well known and widely derided. Sure, the Marlins had a fire sale when free-agent buying spree that led up to the opening of the new Marlins Park didn’t go as planned. But which team is better poised for the future? The Blue Jays, which bought those assets, or the Marlins, which sold them for prospects? If it weren’t for owner Jeffrey Loria and his penchant for dreadful decision-making, we’d say the Marlins.

Again, the Astros’ payroll cuts have been far deeper than any of these teams, so it’s not an entirely fair comparison to ask whether Houston’s rebuilding will look more like one of these teams than another. The Astros had unique problems and are approaching them in a unique way. Still, these teams provide a marker by which we can judge Houston as its rebuilding process continues to unfold.

[Note: Several readers asked to see the Astros chart, so I've added it below.]


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Wendy is also a contributing writer for Sports on Earth. Her writing has appeared on ESPN.com, Baseball Nation, Bay Area Sports Guy, The Score, The Classical and San Francisco Magazine. Wendy practiced law for 18 years before beginning her writing career. You can find her work at wendythurm.pressfolios.com and follow her on Twitter @hangingsliders.

58 Responses to “When Will The Astros Start Spending On Major League Payroll?”

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  1. KJ says:

    Wendy, nice article. After looking at the Marlins with no contracts beyond 2014 I am now curious– do the Astros have any of these cheap players locked up for the next few years?

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    • Drew says:

      The Astros extended Altuve, 4 years/$12.5 million, plus two option years worth $6 million and $6.5 million.

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    • Ol' Rock says:

      I believe Altuve is the only player locked in for the long term. (through 2017) The majority of the staff is signed to year long deals with some “more notable” players available for arbitration starting as soon as 2014.

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    • Steve Holt says:

      What is missing is the chart for the Astros. That would be pretty fascinating. I am guessing there would be a slow slide downward from 2005 until 2011, then a plummet.

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    • Ashitaka says:

      The Astros are only just now starting to get guys at the MLB level who you would even potentially want to lock up (Altuve, Cosart, Peacock, Grossman, Hoes). Most guys, while young, don’t have the kind of upside that would make them good candidates to be signed to guaranteed, long-term deals (take a Matt Dominguez, for example; young, but you can’t really build around that kind of bat at 3B). Once the guys like Singleton, Springer, Foltynewicz and others start coming up in 2014 and 2015, then we might see more of those deals…IF they perform well out of the gate.

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  2. Cody says:

    I have not read a single post from Wendy that could not be described as “quality”. Every single post is not only insightful, but highly enjoyable. Thank you Wendy.

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  3. ALEastbound says:

    They will spend when Singleton, Correa, Springer and others are contributing. They are sort of where the Blue Jays were when AA took over. The farm needed to be rebuilt first, which they are quickly doing it seems.

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  4. Richie says:

    Thanks, but unclear as to the very last sentence. Those other teams show what Houston’s doing isn’t particularly unique, but how might they be used as a “marker” for how Houston progresses from here on out? I don’t understand that at all.

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  5. Slacker George says:

    Thanks for this thoughtful article.

    I think one statement has to be parsed: “Crane hasn’t stripped the major-league payroll down to $13 million as a means to make quick cash, but as part of a system-wide rebuilding process.”

    One must ask how the payroll reduction was used and how much of that repurposing contributes to rebuilding.

    Are they rebuilding faster with a $13M payroll vs. $17M payroll? vs. $21M payroll?

    How much fan goodwill are they burning through with such a low payroll, just based on the public perception of the payroll $ amount itself?

    How much fan goodwill are they burning through with such a low payroll, assuming that payrolls this low mean worse w-l record?

    How much will it cost to get those fans back on the bandwagon?

    I think there is a case to be made that some of the payroll reduction is viewed as “quick cash”, long-term impacts be damned.

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    • OremLK says:

      It’s not just a matter of not spending money, it’s also about maximizing opportunities for the young players by not blocking them with veterans.

      Although in retrospect, as an Astros fan I do wish they had spent a little more money on relief pitchers in the offseason. That is one terrible bullpen.

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      • FeslenR says:

        it’s also about spending the monies wisely. You can spend a lot of it and get really poor investments in return (see Mets Luis Castillo, Jason Bay…etc.).

        or you can invest in your farm system as many teams have chosen to do of recent years.

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        • Pirates Hurdles says:

          Spending money on MLB players (the right ones) can also be an effective method for adding minor league talent. If amateur spending is capped then signing MLB players with the intent to trade is a pretty good approach. The Cubs have been on this path the last two years.

          There are certainly legitimate reasons to question what Houston is doing right now.

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        • Preston says:

          @Pirates Hurdles, they did do this in the off-season signing Veras, who they flipped and Bedard, who didn’t work out. But you can’t fill out your whole bull-pen/rotation with one year deals to flip for prospects or else you have nowhere to play the big league ready guys and see what you have.

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        • Hank says:

          I hear this a lot but the Astros do not have 20 players knocking on the door that will suddenly be blocked by some short term pickups.

          The blocking the kids argument sound nice but how many young players do they have ready

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    • Pirates Hurdles says:

      I think this is a fair question. Its not like they can spend whatever they want on amateur player acquisition, its quite limited. If their budget is say 100 million, paring payroll to 50 million would free up more money than they can spend on the minors. So, is it really justified to drop all the way to $13 million and put out a ridiculously poor MLB product under this guise?

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      • Ivan Grushenko says:

        The $100M depends on revenues as Crane said. They may or may not be able to go up all the way to $50M with the 50% of revs constraint, but they almost certainly could have done more than $13M, and gotten some tradable FA and/or relief pitchers.

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    • Steve Holt says:

      This is already going to be said, but what the ‘stros are doing is fairly obvious. They had little tradable major league talent when they started, so they traded what they could but didn’t get any star talent in return. Much of what they traded for was strike throwers, OBP guys, fallen first rounders and toolsey low minors guys. Their star power will likely come via the draft, and I could see them having an early 2014 draft pick whilst returning a close to winning season. At the moment, they are seeing who of whom they traded for can contribute at the major league level, and the stars will fit in around that foundation.

      What has been lost in the astros season has been that there have been some really solid contributions from the starting pitchers that have been lost in a few blowouts. In addition to this, there have been some really interesting performances from some of their outfielders that won’t be stars, but project to be members of a good supportive cast. They have had a very interesting season, and it has not been an ineffective as their record suggests.

      That said, the ‘pen is awful.

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      • Steve Holt says:

        Opps, I meant 2015 draft pick being early, and the 2015 season being around .500, with further improvement likely.

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  6. Charlie says:

    Does winning 70-75 games draw in more revenue than winning a mere 60-65 for Houston? As in, does spending a few extra million on cost-effective players (Schierholtz, etc.) draw in more revenue?

    I don’t understand how punting a team’s most valuable asset, a MLB season, is a good thing. Nor do I understand how deliberately ignoring the MLB team benefits the overall franchise, as signing players can be shipped to acquire more lower level assets.

    This offseason will be more telling of what the Astro’s are attempting to accomplish. I’m confused as of now.

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    • Steve says:

      They’ll sign Ellsbury and steal him from your precious Cubs. Sorry, Theo.

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    • JD Rocks says:

      A high MLB payroll and a rebuilding farm system are not mutually exclusive. Worry more about rushing guys to the bigs than blocking young talent, I’d say. The Red Sox seem to be doing well with short-term FA contracts and it doesn’t mean they can’t have a great farm, too.

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    • vivalajeter says:

      To some extent, I can see how punting wins is a good thing. If the Nats won a few more games several years ago, they might not have Strasburg or Harper. If the Mets play .500 in September, they’ll lose their first pick if they sign a good free agent. When you have no chance of the playoffs, a few extra losses can help your future.

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    • Ian R. says:

      Since the season opened, the Astros have been fighting the Marlins for the #1 overall draft pick. That has more value than winning 5-10 more games in a lost year.

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      • Nyyfaninlaaland says:

        That’s assuming the #1 pick has substantial added value compared to the #2.

        Many times it does, many it doesn’t. Tampa’s last 2 such picks in 2007 and 2008 are illustrative.

        Price #1 in ’07 was – Wieters at #5, Jarrod Parker at #9 and Bumgarner at #10 are certainly solid as well. But look at ’08 – when your #1 pick isn’t even the best selection with the same last name in the top 10, not so much.

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  7. JD Rocks says:

    150 team-years, one World Series. Bud’s boys can spin the parity web all they want, but this is the reality of baseball: low payroll teams are fodder. Even the ‘smart’ clubs (Tampa, Oakland) that ‘do it the right way’ are only teasing. No, the only way to win in baseball is to outspend your competition, particularly the competition in your division. If your team doesn’t have one of the top two payrolls in its division they are unlikely to even make the playoffs. Think about the teams that consistently outspent their division average – San Francisco, St.Louis, Boston, New York. That’s where the World Series titles end up. And sometimes I get the feeling the players know it, too. Talented players and solid teams defer to the high-payroll clubs, knowing that keeping the system intact is their best chance at big paydays. Thus endeth my Friday rant.

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    • NBarnes says:

      There’s a lot of high-payroll teams that you managed to not mention that haven’t had that kind of success. Maybe you’re cherry picking to support an agenda?

      Nah, couldn’t be.

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      • Jd rocks says:

        Didn’t say you can’t lose with a high payroll, just that you can’t win with a low one.

        There is only one positive outcome of a low payroll: higher profits. I love profit; don’t love owners who jerk the fans around with empty promises and outright lies. The truth wouldn’t sell as many tickets and jerseys, though.

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  8. JuanPierreDoesSteroids says:

    As always, nice work Wendy! I was slowly scrolling down in anticipation of that Marlins graph!

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  9. Billy Bennett says:

    It seems to a lot of us old fans that Canes will spend only when the guys we have in the minor leagues come up an start winning. That everyone counting on all those so called top prospects to be really great players. When,in two, three, four years or more? And then when and if they do start wining Crane will open up and spend? Doesn’t Major League history show that only a handful turn out great. That history has tons and tons of one year wonders. The guys can’t play now, they have no veteran leadership. The coaches sure don’t provide that. So where does the leadership come from?

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    • OremLK says:

      If you believe in leadership is important, I would say that it will likely come from George Springer and Carlos Correa. They both reportedly have plus-plus makeup and are natural leaders on and off the field.

      If the Astros have the next Biggio and Bagwell in their farm system, it’s these two.

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  10. chief00 says:

    Doing something like this is an awful risk. Sure, there will always be diehard, life-long fans who’ll attend games win or lose, but they’re the minority. The majority of fans aren’t diehards; they’re casual fans. Then there’s the bandwagon crowd. When the team starts winning, they return.

    Also, there’s no reason for a fanbase to trust a new(er) owner who comes in and one of his first moves is to slash payroll. To many of us without sufficient info, it looks like nothing more than a cash grab. It’s counter-intuitive, and many (most?) won’t catch on for years, i.e. usually when the teams starts to win.

    What makes it such a big gamble is that it stands a pretty good chance of misfiring. Instead of a rebuild taking 3-6 years, it may take years and years. A bad GM, bad decisions, injuries, etc., all play a role.

    Jays’ fans have seen this first-hand: some bad GMs making bad decisions, injuries to key prospects handcuffing and crippling (literally and figuratively) the ML roster/product. This is why I question the Jays being included in the comment, “The Orioles, Indians and Blue Jays saw their payrolls drop substantially after sustained runs of success came to an end”. They haven’t had a sustained run of success (8 winning season in 20 years, as mentioned) unless 1984-93 is intended, though I agree that they dialed back their spending after the Ricciardi era.

    Then they spent last off season like Jamie McCourt, but it’s been disastrous. Core prospects that they kept like Hutchison, Drabek, Gose, Arencibia and others have either been injured or haven’t performed well, injuries have been a factor, and ML players have disappointed.

    I applaud the Astros–particularly Crane and Luhnow–for taking the hard road. I hope it works out better for them.

    Great article, Wendy. Thanks. :)

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  11. Utah Dave says:

    Last winter everyone was asking for Jeffrey Loria’s head on a plate. I’d say that he and the Marlins don’t look like the losers in their trades at this point.

    As far as the Astros go, I think it’s hard to say right now whether their approach is right or not. A $13MM payroll seems kind of extreme. Being a Pirates fan I have lots of great examples of how a combination of low payroll, poor drafting and silly free agent signings can fail to work out. But it should never take 20 years to fix a franchise. That’s just nuts.

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    • M W says:

      Not too many people suggested they lost those trades, we all knew they got decent talent back. The problem with Loria was the fact that he used the taxpayers to build a stadium and is now pocketing revenue sharing again by dumping all of his previous FA acquisitions.

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  12. Matt says:

    With the way the Astros sale went, the terms of it requiring them to move to the AL, and the overall state of the franchise after former owner Drayton McLane’s mismanagement, the Astros were essentially an expansion team this year.

    I think of them as a brand new team with the name of the old team that used to play in Minute Maid Park.

    All that considered, Jim Crane has had to build this team from scratch, and if the Rays and A’s are models of what a small market team can do to be competitive, why not take those same principles and expedite the process?

    Now, I know Houston isn’t a small market, but with Crane being the successful businessman that he is, I’m sure he is thinking long-term and investing in a pipeline of talent that can be cultivated for perennial contention.

    When the Astros start to win again, Houston and the rest of Texas will love them again, and those small market operational standards mixed with large market revenues will make Jim Crane look like a genius when this is all said and done.

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    • Brendan J. says:

      Because the Astro’s aren’t a small team, which is why they shouldn’t operate like one. “Invest in core talent” is still possible while spending money moderately.

      And, the Rays didn’t intentionally throw seasons when they sucked. And, Oakland NEVER threw a season, ever. They haven’t lost under 74 games since ’97. Never have the A’s done what Houston is doing, and Oakland has had success.

      This stigma of withholding payroll to better the team is an oxy moron.

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      • Matt says:

        If by “intentionally throwing seasons”, you mean” not spending money just to be mediocre.”

        If you have to rebuild, why not reap the benefits of the new collective bargaining agreement as much as you possibly can? Jeff Luhnow helped write the thing for crip’s sake.

        Picking up Correa, McCullers, Appel, and from the looks of it, Rodon in a three year span will make this team a consistent winner much quicker than spending 30 million over three years for someone like Nick Swisher.

        I’ve said it before and ill say it again, if your going to be bad, you might as well be the best at being bad, because the hard slotting system of the draft gives the most leverage to the worst teams.

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        • Brendan J. says:

          That’s under the assumption that draft picks, protected picks, are stone-cold locks to be productive players. While they are the most talented, again, ignoring the MLB team as a means to attain these types of players is absolutely foolish on a revenue standpoint and, potentially, talent standpoint. If Swisher is capable of fitting into the Astro’s payroll, maximizing win potential, and not hindering any future moves, then the Astros absolutely should’ve entertained the idea.

          MLB season = asset.

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      • Feeding the Abscess says:

        Oakland has had talent to continuously flip for younger talent, and has taken wonderful advantage of that. Houston doesn’t yet have that luxury.

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        • Brendan J. says:

          Which makes spending more necessary.

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        • Feeding the Abscess says:

          They signed Pena and Bedard, which didn’t work out. Signing 12 of those players isn’t the wisest strategy in the near or long term.

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        • Ivan Grushenko says:

          Signing 12 Penas and Bedards could be beneficial if 4 work out and could be traded for younger players.

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        • Feeding the Abscess says:

          It’d also block young players from playing, and cost much more than going that route.

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        • Charlie says:

          Who cares if it blocks young players from playing. If the young players don’t, or will not, maximize win potential. Then the young players shouldn’t play.

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  13. MG says:

    MLB allowed Crane to make money hand over fist this year (and probably next 2 years) for agreeing to move the Astros to the AL to help service his debt level since it was a pretty highly leveraged deal.

    Its embarrassing that MLB owners are allowed to do this and I would argue that one thing MLB needs more than anything is a threshold for annual spending on payroll at the MLB level for competitive reasons.

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  14. tz says:

    Wendy, this article would have been great even without the cool graphs.


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  15. Scott Lindholm says:

    Excellent work as always. Two long-term trends are at work:
    1. A lesser emphasis on free agency
    2. A lesser emphasis on trades
    And the Astros will exemplify both.

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    • Terence says:

      The Astros might be the highest volume traders in the league since Luhnow took over. Does anybody know a place to find/compare info like that?

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  16. Leo Walter says:

    Because they have made a decision to basically dump the last 2 seasons,2013 particularly. And nothing any one here can say will change mine,and quite a few other fan’s minds on that point.

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  17. Tim says:

    The major differences between the A’s and Rays compared to the Astros is that those two other teams never had a minor league system as depleted as the Astros system was when Jim Crane bought the team. The other primary difference is the Astros have a ballpark that can generate revenue while the A’s and Rays play in outdated football stadiums. Also, the Astros play in a larger media market than both Oakland and Tampa. Thus, I believe spending $20-30M more would not have been prudent as the free agents they would have signed would not have returned prospects the quality of Correa, Appel, McCullers or, possibly, Rodon.

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    • Bill says:

      The Rays play in a baseball only stadium, granted one that was built in 1986 and was outdated then, but still.

      The Astros do need to spend some money, as it would help there younger players. Maybe a Beltran or Garrett Jones or Feldman or some others would help for next year. Does not have to be huge, but you need some veterans around to help the young kids.

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