Why the Astros deal will get done

Jim-Crane-small1Major League Baseball has been slow-trading approval of Drayton McLane’s proposed sale of the Astros to a group headed by Houston businessman, Jim Crane.

As a result of MLB’s lethargy, a cottage industry of skeptics – such as the Chronicle’s Richard Justice and Biz of Baseball’s Maury Brown – have speculated that Crane’s somewhat hard-knuckled past in business dealings may provoke MLB Commissioner Bud Selig to persuade MLB owners not to approve the deal.

That’s possible, but not probable.

I have no inside knowledge regarding the Astros deal. However, I’ve been involved in sorting out complex business deals for over 30 years, so I’ve got the perspective gained from that experience to pass along. And that experience tells me that this is a deal that will get done.

First, the suggestion that Crane’s past business dealings are giving other MLB owners pause is laughable.

I mean, really. MLB owners are a group that has endured such owners as George Steinbrenner copping a plea to criminal charges while he owned the flagship franchise in the business. And that’s not to pick on Steinbrenner — MLB owners are not exactly a pristine fraternity (remember the Yawkeys and Marge Schott?). Thus, a highly suspect EEOC complaint and problems with the DOJ over a fraction of the business that Crane’s companies supplied to the federal government’s war logistics over the past decade will not cause MLB owners to blink over Crane.

Similarly, Crane’s failure to close on the deal that he supposedly had to buy the Astros back in 2008 nor his attempt to buy the Cubs and Rangers over the past couple of years pose any real problem. MLB owners understand that the financial crisis in credit markets in 2008 doomed Crane’s earlier bid for the Astros. Likewise, even though Crane was not MLB’s favored bidder for either the Cubs or the Rangers, his participation in the bidding process ultimately increased the prices paid for those franchises. Believe me, MLB owners appreciate that.

Finally, even the somewhat highly-leveraged nature (at least for MLB) of the Crane group’s bid for the Astros (supposedly $220 million of the $680 million purchase price will be debt financed) is not a dealbreaker. Although that level of debt would put the Astros out of compliance with MLB’s self-imposed debt-to-equity rule (supposedly around 10%), at least nine out of the other 29 MLB clubs are currently operating out of compliance with that rule. The Crane group’s proposal is not close to being among the most highly-leveraged of those deals.

So, if none of the foregoing are real roadblocks, then what’s holding up approval of the Crane group’s bid?

It’s anyone’s guess, but my sense is that simple gamesmanship is far more likely the reason rather than any problem with Crane. Given his prior efforts to buy the Astros, Cubs and Rangers, MLB owners know that Crane really wants to own controlling interest in an MLB team. They also know that he understands that he will have no chance of doing so if he pulls out of a deal again.

In short, MLB owners know they can make Crane wait awhile without much risk of him backing out. Uncertainty at the top of an MLB team is rarely good (as reflected by the 44-90 Astros record so far this season). Crane’s soon-to-be-competitors don’t mind grinding the Astros down a bit more before approving the deal.

And why then do I think the deal will ultimately be approved? Well, that’s easy.

MLB’s business model is not exactly rosy right now. One club is currently in bankruptcy (the Dodgers), two other clubs just recently exited bankruptcy (Cubs and Rangers), and another club’s ownership is dealing with fallout from the Bernie Madoff Ponzi scheme (the Wilpons and the Mets). MLB attendance is flat this season and its media revenues are dwarfed by the NFL’s, which continues to distance itself from MLB as the premier sports entertainment business in the U.S.

On the other hand, Crane’s group will pay $680 million for the Astros, the lease on Minute Maid Park, and a stake in the newly created Comcast SportsNet Houston, a regional sports network partnership with the Houston Rockets that will launch in 2012. That sales price for an MLB team and related assets ranks behind only the $845 million that the Cubs sale generated in 2009 and compares quite favorably to the $593 million price that Chuck Greenberg and Nolan Ryan’s group paid for the Rangers last year.

The bottom line is that MLB owners are not employing Commissioner Bud Selig to scuttle a near-record purchase price for a franchise in a down and uncertain market.

And that’s the reason that the Astros deal will get done.

A lack of prosecutorial discretion

roger-clemens-mlbsluggerscom2As regular readers of this blog know, I don’t think that Roger Clemens should have ever stood trial for allegedly perjuring himself in connection with Congress’ investigation into use of performance enhancing drugs in professional sports.

Nevertheless, the government refused to exercise prosecutorial discretion and insisted upon pursuing the case against Clemens.

But to make matters worse than that dubious decision, the prosecution was either so cocky or negligent with regard to prosecuting its case against Clemens that prosecutors violated an order of U.S. District Judge Reggie Walton not to disclose certain information the the jury.

Whether arrogance or negligence, the result was dire for the prosecution – Judge Walton declared a mistrial on the second day of the trial.

So, now the threshold question is whether Clemens can be prosecuted again for the same offense without violating principles of double jeopardy that protect citizens from the government prosecuting an individual multiple times for the same offense.

As Scott Greenfield relates, that issue essentially comes down to the prosecution’s mens rea in exposing the jury in Clemens’ first trial to the forbidden evidence.

If the prosecution did so intentionally in an attempt to get away with violating the judge’s order in an attempt to influence the jury, then the judge ought to dismiss the indictment against Clemens.

On the other hand, if the prosecution falls on its sword and persuades the judge that the prosecutors are such imbeciles that the presentation of the forbidden evidence to the jury was the result of an unintentional mistake, then the judge will probably allow the prosecution to tee up another prosecution of Clemens.

Just out of curiosity – does anyone other than some prosecutors and a few paternalistic judges really believe that the prosecutors in a case under this level of public scrutiny would unintentionally present forbidden evidence to the jury?

It is high time for this case to go away.

Moneyball

One more thing about the Stros

Brad-Mills-GettyJust one more thing. I promise.

Some things never change with regard to the Stros and the local media. Such as this most recent puff-piece by former Chron sportswriter and current MLB.com Stros beat writer Brian McTaggart with regard to Stros manager, Brad Mills.

Yeah, Mills has been dealt a bad hand and he shouldn’t be blamed for that. And he seems to be nice fellow.

But before characterizing him as a “terrific manager,” don’t you think that McTaggart ought to require that Mills at least understand how to implement a double-switch? Just another example of the local mainstream sports media’s vacuum of analytical ability.

Here’s hoping that the new owners will look beyond such tripe.

So, what’s next for the Stros?

Houston_Astros2With the announcement that Drayton McLane has finalized the sale of the Stros to a group of investors led by Jim Crane, my sense is that an overhaul is around the corner.

As regular readers of this blog know, I think McLane held on to the club way too long. He probably should have sold after the 2006 season failed to repeat the excitement of the 2005 World Series run and certainly after the disastrous 2007 season, when Crane’s first attempt to buy the club went awry, probably due to tightening credit markets at the time. But if McLane had sold then,  he almost certainly would have gone done in history as the best owner in franchise history.

However, Bill James’ “Law of Competitive Balance” set into the Stros organization after the club’s improbable 2005 World Series appearance and McLane never fully recovered from that syndrome.

He did finally clean house and hired GM Ed Wade and scouting director Bobby Heck to resurrect a farm system that McLane had allowed to deteriorate from one of MLB’s best when he acquired the club in 1992 to one of the worst over the past five seasons. Although the Stros appear to have picked reasonably well over the past three drafts, most of those players are still developing on the lower-level farm clubs.

Rebuilding a barren farm system takes a long time. Just ask the Devil Rays.

Now that McLane’s dubious decision to allow the Stros farm system to erode has been fully exposed, that detracts considerably from the legacy of success that the club enjoyed under his watch during the Biggio-Bagwell era. Ballpark and television network assets aside, no one in their right mind could argue that the Stros baseball operation is in better condition now than when McLane bought it in 1992.

So, what should one expect from Crane, who appears to have paid a premium price for the club?

I think there will be big changes. Crane has more baseball knowledge in his pinky finger than McLane ever had, so Crane understands the importance of rebuilding the farm system. My bet is that Crane will take a run at keeping Heck, who is well-regarded in baseball development circles. I don’t think there is much chance that either Wade or team President Tal Smith will be retained, though.

Long term, Crane will emphasize a baseball operation that measures performance statistically much more carefully than McLane’s baseball operation, which flubbed in that area frequently. I’m not suggesting that Crane won’t make mistakes. But my bet is that they won’t be of the nature of paying Kaz Matsui $16.5 million or Brandon Lyon $15 million over three years. Or Clint Barmes almost $4 million and Bill Hall $3 million for one season. Or Brad Ausmus, ever.

And for that, Stros fans should all be thankful.

A Stros snapshot

Houston_Astros2Through only 34 games, it’s premature to characterize this season’s Astros team (13-21) as one of the worst in club history. There are actually some hopeful signs. However, a main trend line is not looking good.

As regular readers of this blog know, I like to use the RCAA ("runs created against average") and RSAA ("runs saved against average") statistics — developed by Lee Sinins for his Sabermetric Baseball Encyclopedia — to provide a simple but revealing picture of how an MLB club or player is performing relative to other teams or players in a particular league.

RCAA reflects how many more (or fewer) runs that a team (or player) generates relative to a league-average team (or player). An exactly league-average team’s (or player’s) RCAA is zero. Thus, an above-average hitter has a positive RCAA and a below-average hitter has a negative RCAA.

Similarly, RSAA measures how many more (or fewer) runs that a pitching staff (or an individual pitcher) saves relative to a league-average pitching staff (or pitcher). As with RCAA, an exactly league-average pitcher’s (or team’s) RSAA is zero, an above-average pitcher has a positive RSAA, and a below-average pitcher has a negative RSAA.

RCAA and RSAA are particularly useful because they provide a useful benchmark comparison across eras because it shows how much better (or worse) a team’s hitters and pitchers stacked up against an average team of hitters or pitcher staff during a season. That’s really the best way to compare teams from different eras because comparing other hitting and pitching statistics — such as on-base average, slugging percentage, OPS, earned run average, wins and hitting statistics against — is often skewed between teams of hitter-friendly eras (i.e., up until this season, the past 20 seasons or so) versus pitchers of pitcher-friendly eras (i.e., such as the late 1960’s and early 70’s).

As regular readers of this blog know, the Stros have not had an above-average team RCAA in any season since 2004, bottoming out with last season’s abysmal hitting club that generated 86 fewer runs than an average National League club would have produced using the same number of outs. That was the fifth worst performance in club history.

However, even without Lance Berkman this season, the Stros have a team 13 RCAA – a slightly-above average team relative to other NL clubs. Inasmuch as the Cardinals (and particularly Berkman) are the only club really hitting well so far this season, the Stros team RCAA ranks fifth in the NL. Here are the individual RCAA of the Stros hitters:

T1   Brett Wallace             9  
T1   Jason Bourgeois         9  
T3   Hunter Pence             6  
T3   J.R. Towles                 6  
5     Michael Bourn            3  
6     Matt Downs                1  
7     Brian Bogusevic          0  
T8   Clint Barmes              -2  
T8   Joe Inglett                  -2  
T8   Jason Michaels            -2   
T11 Humberto Quintero    -3   
T11 Carlos Lee                   -3   
13   Bill Hall                       -4  
14   Chris Johnson              -5  

So, no on is striping the ball as well as Berkman (23 RCAA), but Wallace, Bourgeois, Pence and Towles are off to good starts and most everyone else has managed either to be about or modestly-below league-average. The question is whether this group can keep up that kind of production.

But the ominous signs are coming from the pitching staff, which has given up an astounding 51 more runs than an average NL pitching staff 34 games into this season. That level of ineptitude has real consequences.

This club’s pitching staff’s performance to date is already tied for the 14th worst performance in club history and is 28 more runs given up than the next worst staff (the Dodgers) this season. Here are the individual RSAA:

1     Mark Melancon              3  
T2   Bud Norris                   1  
T2   Jeff Fulchino                1  
T4   Aneury Rodriguez       -1  
T4   Wilton Lopez              -1  
T6   Enerio Del Rosario      -3  
T6   Wandy Rodriguez        -3  
T8   Fernando Abad            -5  
T8   Brett Myers                   -5  
T8   Brandon Lyon               -5  
11   Jose Valdez                    -6  
12   J.A. Happ                      -10  
13   Nelson Figueroa            -17   

In short, only three Stros pitchers have been above-National League average so far this season and then only barely so. Happ and Figueroa – at least until the latter was banished to the bullpen – have been among the worst starting pitchers in the NL so far this season.

Is it likely that the staff will turn it around? Over the past several seasons, Rodriguez has pitched better as the season has worn on, so there is hope there. And Myers and Happ are certainly capable of improving their RSAA over the balance of the season, although both have been inconsistent from season to season throughout their career. So, don’t be surprised if they have a bad season this year.

What’s my prediction at this point?

It looks as if this club is similar to the 2007 team, which finished 73-89 with a precisely league-average hitting team, but a pitching staff that posted a horrifying -79 RSAA (Woody Williams, Matt Albers and Jason Jennings all posted over -20 RSAA that season). Frankly, based on the club’s performance to date, 73 wins is looking pretty good.

But even that awful 2007 club had Roy Oswalt with a 24 RSAA and Chad Qualls with an 11 RSAA and I don’t see any sure bets on the 2011 club’s pitching staff who can rival those performances. So, there is real chance that this club’s pitching staff will get worse than it has already been.

Folks, if that happens, then this season could get very ugly.

Milo Hamilton reflects the sorry state of the Stros

MiloYou know, Stros radio announcer Milo Hamilton was never in the same league as Gene Elston as a play-by-play man. But I always thought Hamilton knew something about baseball.  Heck, he’s been around it for over 50 years.

Apparently not:

"I want to know, if a guy gave you $85 million, and that’s what Drayton did in the last contract…and he said, ‘This is your team,’ and he said that…wasn’t in his persona, to be a leader. Yet last night, Tony LaRussa – when asked about Berkman – ‘He’s now the leader on this team, he is the inspiration to the older players, he goes around an inspires the younger players," and he got in excellent shape by hiring a trainer. If he had done that the last couple of years that he was here, guys, he could have finished out a really fine career in Houston if he had given it that same dedication. I just want a simple answer – why did you think it wasn’t necessary to get in shape your last couple of years as an Astro, but now for team you didn’t even know, a manager you never played for, you felt it was your responsibility to get in great shape?

…Lance, I love ya. You’ve got a great family, you’re one of the greatest ministers in all of sports…but wouldn’t it have been great to have given it that same dedication to the Astros and the owner here that you did in two short months for the Cardinals?"

It is indisputable that Lance Berkman is the second-best hitter in the history of the Houston Astros, behind only Jeff Bagwell. Given that Hamilton’s criticism is over Berkman’s last few seasons with the Stros, let’s focus on those.

He was injured in 2010 (bad knee) and had his first bad season of his 13-year MLB career. But I am aware of no evidence that Berkman could have done anything from a conditioning standpoint that would have prevented or lessened the impact of that injury.

By his standards, Berkman didn’t have a stellar 2009 season, either (31 RCAA/.399 OBA/.509 SLG/.907 OPS/25 HR/80 RBI in 136 games). However, that production was far better than any other Stros hitter that season. And in most other non-Bagwell seasons, for that matter.

And in the 2008 season, Berkman had one of the best seasons of any hitter in the history of the Stros (58 RCAA/.420 OBA/.567 SLG/.986 OPS/29 HR/106 RBI/116 R/99 BB/18-22 SB).

And let’s not forget that Berkman is by far the best hitter in Stros history in post-regular season play.

For that, Berkman gets trashed by his former’s club’s most well-known media representative.

Meanwhile, Hamilton continues to ignore the undeniable fact that Stros management mismanaged the once-strong Stros farm system for a decade after Berkman came up the MLB club. That management incompetence virtually ensured that Berkman would play out the final years of his Stros career on horrible baseball teams.

And let’s not even get started on Hamilton’s silence in regard to the grossly overpaid Carlos Lee, who Joe Posnanski deemed to be the worst everyday MLB player last season.

Finally, why hasn’t Hamilton said anything about the Stros’ disingenuous Craig Biggio Farewell Tour?

So, there you have it. The Stros are currently tied for the second-worst record (8-14) in MLB, which is frightening in that the team has actually over-performed (at least in terms of hitting) so far this season. There is essentially no rational hope that the club will win much more than 70 games, if that. The primary attractions that the club is touting at the ballpark this season are the new video screen (it’s really big!) and Brian Caswell-inspired food (don’t bother, it’s still mostly Aramark).

And Milo Hamilton is criticizing Lance Berkman?

The sad reality is that Milo Hamilton reflects what’s wrong with the Stros, not Lance Berkman.

The sale of the Stros cannot happen fast enough in this 25+ year field level ticketholder’s book.

Baseball Flowchart

This is an absolutely brilliant flowchart. Perfect for getting ready for the baseball season. Click the image to view a larger image.

baseball chart

A lesson on using other people’s money

Well, maybe it’s not all so bad after all that the Harris County Sports Authority used junk debt to finance construction of Reliant Stadium. Check out what’s going on in St. Louis (H/T Craig Depken):

Eight years ago, as the St. Louis Cardinals aimed to build a new baseball stadium, team owners signed an agreement with the city worth millions of dollars a year in tax breaks.

In exchange, the team agreed to a series of annual perks for the region’s residents – 100,000 free tickets, 486,000 seats for under $12 and $100,000 in donations to recreation for disadvantaged youths.

The Cardinals also agreed to give the city a cut of profits made if any portion of the team was sold.

Then, last year, owners sold a sizeable chunk of the Cardinals – more than 13 percent. Now, a group of anti-public-stadium advocates is alleging that the team owes the city hundreds of thousands of dollars.

And, despite another multimillion-dollar budget gap anticipated for the coming year, the city isn’t checking into it. City officials acknowledge that they have never really kept tabs on the agreement.

.    .     . Several city officials, including Barb Geisman, the former deputy mayor for development, said there was no reason to double-check. They trust the Cardinals.

Which reminds me of what the late Milton Friedman used to say about the dynamics of using other people’s money:

“There are four ways in which you can spend money.”

“You can spend your own money on yourself. When you do that, why then you really watch out what you’re doing, and you try to get the most for your money.”

“Then you can spend your own money on somebody else. For example, I buy a birthday present for someone. Well, then I’m not so careful about the content of the present, but I’m very careful about the cost.”

“Then, I can spend somebody else’s money on myself. And if I spend somebody else’s money on myself, then I’m sure going to have a good lunch!”

“Finally, I can spend somebody else’s money on somebody else. And if I spend somebody else’s money on somebody else, I’m not concerned about how much it is, and I’m not concerned about what I get.”

“And that’s government .   .   .”

Why do the feds even care?

Clemens Following on this post from last week on the misdirected nature of the criminal prosecution of Roger Clemens, Allen Barra wrote this W$J op-ed mirroring my skepticism over the case:

Never mind that there was no criminal penalty attached to anything Mr. Clemens is accused of using-if there were, Jose Canseco, who has written two books bragging about his use of steroids, would be serving time. Never mind, too, that when Mr. Clemens is said by his accusers to have used such substances, they weren’t even banned from Major League Baseball: the Basic Agreement between the Players Association and owners forbidding the use of PEDs didn’t take effect until 2004.

And let’s disregard as irrelevant the judgment of baseball analysts such as David Ezra (author of "Asterisk: Home Runs, Steroids, and the Rush to Judgment") and J.C. Bradbury (author of "The Baseball Economist: The Real Game Exposed"), who have studied PEDs and Mr. Clemens’s performance and found no statistical evidence that, even if he took PEDs, he gained any advantage from them. [.  .  .]

All that matters to the government is that, in February 2008, Mr. Clemens may have lied to a House committee on a matter the committee had no business poking its nose into in the first place. If there was no criminal penalty for using the drugs and if MLB and the union have agreed now to police their own house, why do the feds even care?

That’s a good question, and one we all deserve an answer to before the government goes to the expense of putting Mr. Clemens on trial.

As I noted earlier, Clemens has not defended himself well. But the government’s handling of the investigation into his conduct is far more egregious. Here’s hoping that Clemens’ jury sees it the same way.