Houston teams pay tens of millions in sunk costs


If you own a professional sports team, you know the cost structure of the whole endeavor. You’re going to spend hundreds of millions on player salaries, tens of millions on coaches’ salaries, and you know there’s probably going to be a lot more hits than misses. It’s all speculation, trial and error.

Even with that full disclaimer, there are some extreme situations where a contract, for whatever reason, not only fails to live up to expectations, but becomes a completely sunk cost. A virtual zero. I don’t care how many billions you have, they hurt. Billionaires don’t become billionaires by throwing money away, and so contracts that are complete zero sets puncture.

For whatever reason, we’ve had some EXTREME zero sets in this city over the past few years, contracts that were the equivalent of lighting a bonfire of US currency. These deals have soured for a variety of reasons, some conventional failures, some bad decisions, and some just bad luck with injuries. Without further ado, here are the five most frustrating sunk costs in Houston from the past two years:

5. Deshaun Watson’s 2021 salary, $10.5 million
You may remember Deshaun Watson. He’s the former Texan quarterback who hasn’t been in the news at all for the past 16 months. (I kid, I kid.) The Texans tried to trade Deshaun Watson in March 2021, and then the lawsuits started flying, forcing the Texans to hold him until he became tradable again. Ultimately, that lasted a year, meaning the Texans had to pay Watson his $10.5 million salary to do nothing by 2021. I’d say this one might be worth it.

4. David Culley’s Termination Fee, $22 Million
Admit it, before he was hired as the head coach of the Houston Texans, you had no idea who David Culley was, did you? It’s okay, neither am I, and I’m getting PAID to know who David Culley is! Well, in his one season as the head coach of Texans, he coached like someone we all had never heard of, and as a result, he was gone after a year. Shockingly, the Texans had to pay Culley the full four-year contract, reportedly $22 million. That number included his salary for the year of service, but when you consider how poorly Culley coached, I consider the whole Culley Experience a sunken price.

3. The Mountain of Texans 2022 Dead Money, $52.3 Million
Before the arrival of Culley, and before the arrival of Caserio as general manager, Bill O’Brien held both roles, head coach and general manager. O’Brien was fine as head coach. He wasn’t Vince Lombardi or anything, but he was an average head coach. You can win with that. now, as general manager, he was a disastrous disaster, trading DeAndre Hopkins and the Texans as if they were of no value, handing out bad contracts as if they were Halloween candies. Well, the bad contracts came back to life, and after Caserio moved the building out of the building, the end result is a $52 million mountain of dead man’s money hitting the team in 2022. Thanks for nothing, Bill!

2. Justin Verlander’s two-year extension for 2020 and 2021
This is a tricky one, as it happened due to Verlander’s injury, an elbow injury that led to Tommy John’s surgery. In 2019, Verlander signed a two-year extension worth $66 million for the 2020 and 2021 seasons. The only real baseball the Astros got for that extension was one start to begin the COVID abridged season in 2020. If you factor Verlander’s 2020 salary and COVID into this, and add this to the entire 2021 season he missed, that means the Astros paid Verlander about $45 million for one start. The happy ending to this story is Verlander’s return to dominance in an Astros uniform in 2022.

1. John Wall’s 2021-2022 Salary and Contract Buyout, $84.9 Million
It fell over the past week. When Russell Westbrook demanded a trade ahead of the 2020-2021 season, the Rockets accommodated him, but NBA rules required them to take back a salary equivalent to Westbrook’s more than $44 million salary at the time. That meant taking Wall back in a deal with the Washington Wizards. At that point, Wall still had three years to go. In 2020-2021, Wall was doing well, playing 40 games, averaging more than 20 points per game. However, once the Rockets were committed to rebuilding, they thought it would be better to let Wall sit and pay him to do nothing. In 2021-2022, that meant $44 million to do nothing, and on Tuesday, the Rockets bought the final year of Wall’s deal for $41 million. That’s practically $85 million for ZERO work. That’s life, baby!

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