Looking To Fret About Crane? Start With The Debt

I’m not one for fear-mongering, and I’d like to actually see Jim Crane in action before I judge what kind of owner he’ll be, but if you’re already worried about the post-Drayton Astros, here’s some news that won’t help you sleep at night. Jim Crane will finance $300 million of the $680 million sale price via loans. That number is shockingly high, and puts him in the company of someone you’d rather not associate with the Astros: embattled Dodgers owner Frank McCourt. Maury Brown has more:

According to Mike Ozanian of Forbes, “In 2010 the Astros had operating income of $14 million, so if Crane parks $300 million of debt on the team the franchise would be in technical default of the league’s debt limit, which is 10 times earnings before interest, taxes, depreciation and amortization.”

Whether it’s to keep partial ownership or get around MLB’s debt rules, Drayton McLane will reportedly keep a $65 million minority stake in the club. Crane will have just $70 million and $125 million skin in the game. Crane’s partners are pitching in $300 million, and believe it or not, the rest will be a loan out of Major League Baseball.

All of which is to say: keep your eye on that Astros payroll number as well as on the moves that Crane makes. He can hire Andrew Friedman and all the boy wonders he wants, but carrying a low payroll is going to limit the number of mistakes the Astros can make. That would not be fun times.

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