It appears the latest plan o' the day may result in a cozy baseball-only stadium for the Astros, with or without a retractable roof. Such a vintage-style ballpark would be another coup for owner Drayton McLane, whose negotiations to sell the team to an out-of-towner netted him a free PR effort for season ticket sales courtesy the Greater Houston Partnership, Mayor Bob Lanier and others. But before a new "ball yard" rises downtown, perhaps it's time for some belated scrutiny of McLane's claim of having lost $65 million on the team over the past three years. That figure has been repeated by most local media -- without a shred of corroboration or a single note of skepticism -- dozens of times over the past few months. One notable recent example was Chronicle columnist Ed Fowler's shoulder-to-cry-on depiction of a poor Drayton who's "simply tired of bleeding cash." But Fowler, like the rest of us, must accept the blood loss as an article of faith, since McLane's books, like those of most baseball owners throughout time, remain closed.
Given that the few available independent studies of baseball's finances consistently question the owners' perennial cries of poverty, it seems odd that the city's sports scribes and yakkers so readily accept the figure. Perhaps they should skim Andrew Zimbalist's Baseball and Billions, a revealing look at baseball's big-money underbelly. Using data collected over the years, Zimbalist shows how owners can turn profits into huge paper losses. First, the law allows team owners to claim the players as assets and depreciate up to 50 percent of the purchase price, usually stretched over a five-year period. In McLane's case, that would be $11.5 million a year, or $34.5 million over the period of his hemorrhaging. In addition, owners often set up wholly-owned shell corporations and lend them the money to buy the teams. The teams pay the owners interest, which count as losses on the books even though the money is simply migrating from one pocket to the other. (The Astros are owned by Houston McLane Co. Inc., which is in turn owned 100 percent by Drayton McLane.) Finally, there's ex-Astros owner John McMullen's lucrative legacy, the Astrodome lease, which was transferred to McLane along with the team. In exchange for a nominal annual payment to the county, Astrodome U.S.A. (the other half of Houston McLane Co. Inc.) keeps almost all revenue from Astros games and millions more from the other events held at the complex. Since Astrodome U.S.A. doesn't have to disclose its revenues, it's unclear how much cash the many Astrodome events generate. But one source says the Oilers have been paying in the neighborhood of $3 million annually, and Astros controller Robert McBurnett says the team pays rent to its sister company for use of the Dome. Throw in the rodeo and more than 200 other events the complex hosted in 1995, and you're talking serious money to offset baseball losses. Author Zimbalist says "a very good source" told him that the Dome nets up to $30 million a year on non-baseball events.
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McBurnett says player depreciation is not part of the $65 million figure, which he describes as representing operating losses only. And he characterizes McLane's financing of Houston McLane Co. Inc. as an "investment," not a loan. But he would not provide even a summary statement of the team's finances for review. Nor would Astrodome U.S.A. divulge its earnings. The Press would never suggest, of course, that McLane is fibbing or even stretching the truth on his losses. But if the city is readying a plan to hand him a new stadium costing $200 million or more to stop the bleeding (and he would still hold the sweetheart Astrodome lease for at least a decade), then perhaps the offer of a few more specifics would be in order. "I think he needs to open his books completely," says Zimbalist.