Astros fans are eager to spend Jim Crane's money, but are they being realistic? Dive into the financial realities of big-league contracts and fan expectations.
This week, the baseball rumor mill was on fire with rumors about Blake Snell coming to the Astros. Then this happened Sunday. By Monday, Snell had agreed to a deal with the Giants.
Before the Giant's signing was announced, I tried to describe what I had seen so many in the fan base communicate what their expectations to keep every Astros player. They were tired of losing heroes like Correa and Springer. Astros fans have been eager to spend Jim Crane's money.
I followed this up with a Twitter poll today.
Given the expectations of the fanbase I expected Astros fans to go into tar and feather and gnashing of teethes mode.
Ten Hours into this poll the results are far more measured than I would have expected.
Maybe this is a function of those that follow my account. However, I also heard this.
Maybe fans are conflicted. Frankly, I blame a media that does not think critically and seems to lose all sense of financial realities.
WHEN this rumor hit, why wasn't there widespread discussion how a THIRTY MILLION DOLLAR addition to the Astros payroll seemed completely out of step with EVERYTHING Crane and Brown had said all offseason?
Why weren't there interviews with Crane and or Brown asking them had they shifted into a willingness to run effective payrolls that were more than 50% more than they had ever had before? (This assumes Tucker and Valdez are on the 2025 Astros).
That would have framed the Snell rumors properly. THAT would have let this fan base understand what they were expecting.
I have said repeatedly that I do NOT have sources. I have to be careful not to mislead you then. IF Jim Crane wants to balloon his effective payroll 50%, he certainly can. I have seen NO signs from the Astros that this is the case.
I tried to warn people about this yesterday.
"Signing Snell at $33M AAV leads to a CBT payroll of $288M this year and $17M in taxes. The effective payroll would be $305M.
Signing Snell at $33M AAV leads to a CBT payroll of $312M in 2025 and $39M in taxes. The effective payroll would be $351M. This is with letting Valdez and Tucker play out their last year of Arbitration and WITHOUT extending Bregman.
In 2020, the Astros planned to have a $230M payroll. Of course, COVID slashed that. This is the highest payroll ever planned for the Astros."
The Astros fan base seemed/ seems to expect Jim Crane would/ will do all of the following:
sign Snell (for the $66M/2yr deal he wanted)- now the expectation is to go after Montgomery (I assumed $21M AAV/ multi-year)
re-sign/ extend Bregman (for $28M AAV)
extend Tucker (for $28M AAV)
extend Valdez (for $28M AAV)
(You can dispute any of these numbers. It is actually in the ballpark and frankly irrelevant to the overall message.)
The Astros would have
$340M CBT Payroll
This would incur $65M in CBT taxes
The effective CBT payroll would then be $405M
Folks, THAT was NEVER going to happen. It will not happen. No matter what any X poster says about how rich Crane is. No matter what ANY media member tells you, that will not happen.
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Now let's continue.
I created this table to give you an idea of how much each of these potential options would cost the Astros in payroll.
I am not going to go through each option. I do not believe the Astros will go into CBT3 level taxes until they say they will (they have not).
I do want you to understand how these tax rates are calculated.
For the entire CBT Payroll that is above CBT1 a tax of:
20% is assessed in the first year of the overage.
30% is assessed in the second consecutive year of the overage.
50% is assessed in the third consecutive year and beyond of the overage.
For the portion of the CBT payroll that is above CBT2 up to CBT3 level ($20M total potential) a tax of 12% is assessed (this is in addition to the base already taxed above).
For the portion of the CBT payroll that is above CBT3 up to CBT4 level ($20M total potential) a tax of
42.5% is assessed in the first year of the overage.
45% is assessed in the second consecutive year and beyond of the overage.
This is in addition to the base already taxed above.
For the portion of the CBT payroll that is above CBT4 a tax of 60% is assessed (this is in addition to the base already taxed above).
If a team is over the CBT for three straight years and spends over the
CBT2- those dollars are effectively taxed at 62% (50%+12%)
CBT3- those dollars are taxed at 95% (50%+45%)
CBT4- those dollars are taxed at 110% (60%+50%)
Given what I believe are the financial constraints, let me share How I Would Spend Jim Crane's Money next.