By Sean Pendergast
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By Richard Connelly
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By Craig Hlavaty
When Drayton McLane bought the Astros from John McMullen, Houston fans had no idea how lucky they were. Imagine swapping the skinflint who drove Nolan Ryan out of town and dismantled a playoff team for the most generous, selfless man on the planet. How else to label a person who has lost $120 million since 1992 -- including $16 million in '99 despite record-setting attendance -- and yet is paying out of his own pocket to build a Ruggles Grill at the new ballpark?
You could call him stupid, were any of the numbers real. Or maybe it's the fans (and the ever gullible local sports media) who should wear dunce caps for believing such claims, which McLane has steadily inflated over the years.
Those with knowledge of sports economics aren't as easily fooled. Andrew Zimbalist, author of Baseball and Billions, estimated in a recent Texas Monthly article that McLane's sweet Enron Field deal will yield an additional $25 million to $30 million a year in revenues. Zimbalist figures the new ballpark has boosted the value of the Astros to about $250 million. McLane paid $115 million for the team in 1992. Hardly the dismal investment he insists he made.
McLane might dismiss Zimbalist's estimates as the biased ravings of a sports-hating socialist, but he'll have less success doing that with Forbes Magazine, which published similar numbers in its most recent list of sports franchise values. Forbes did allow that the Astros lost money in 1998, but pegged the figure at only $3.7 million. After the surge in attendance this season, it's likely that the next Forbes list will show the Astros operating in the black.
But what's a few million in chump change against the $120 million beating poor Drayton says he has taken? A lot, since the bigger number is about as solid as the team's playoff performance. The figure doesn't include, for example, the $57.5 million that tax law allowed him to claim as depreciation on his players. It leaves out the $20 million in cash and benefits the county paid him to buy out his Astrodome lease. And it fails to account for the several million in tax breaks he gets for moving money from one pocket (the Astros) to another (Houston McLane Co. Inc., the corporate owner).
No one knows what else it doesn't include, because McLane will never open his books. Why should he, for that matter, when the Houston Chronicle dutifully prints every exaggerated tale of woe that he spins?
While McLane's numbers remain unclear, the cost of the new football stadium has been fluctuating more wildly than Internet stocks of late.
What started as a $200 million estimate by County Judge Robert Eckels and then-mayor Bob Lanier in 1996 ballooned to $310 million by October 1998, then peaked at $427 million before falling to the current $367 million. Or maybe it's $355 million, which was recently floated by a source close to the action. Hard to keep track, since it changes daily.
Inflation is the simple excuse offered by football team executives, but the last time anyone looked, inflation was well under the rate needed to account for the hefty price increase. The Sports Authority has been seeking an explanation, but its members remain in the dark. "I don't know how it happened," says the source. "Now [the architects] are down to $355 [million], and they say they're going to get down to $325 [million]."
The search for cuts continues, because the county supposedly capped its obligation at $195 million, and the football team and rodeo refuse to extend their $115 million commitment. But the county recently announced that the current rosy economic picture has increased the funds available for the stadium to about $250 million, and Authority chairman Billy Burge has indicated as much to football team owner Bob McNair. If the bills mount, the taxpayer share will grow.
The notion that $250 million will actually be available for the stadium also lacks a solid foundation. That may be true if the city continues to grow and interest rates remain stable, but an economic downturn could considerably reduce the take. "All our scenarios are based on the best economic times we've ever had," says Authority member Jim Jard. "That's not how you do business."
Of course, when you're juggling tens or hundreds of millions, it's hard to be precise. On the other hand, some numbers are solid as granite: McLane will save a very specific number of millions by trading away two of the team's best players, Mike Hampton and Carl Everett, and unloading the overpriced Derek Bell. Whatever it takes to recoup those nine-figure losses, we guess.
Another figure to consider: Since the Ballpark at Arlington opened in 1994, Texas Rangers ticket prices have increased by about 50 percent in most sections; the popular Home Run Porch area has almost doubled. New ballparks invariably mean a huge leap in ticket and concession prices. A family of four in Houston already shells out an average of $120 to take in an Astros game. They might not feel so grateful for Drayton McLane while queuing up for a $13 appetizer at the Ruggles stand.
E-mail Bob Burtman at email@example.com.
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