Most harrowing is the takeaway that baseball’s biggest welfare case could
have funded a much greater portion of the ballpark. In 2009, when the
Marlins started spending some of their profits on their portion of the stadium,
they still had an operating income of $11.1 million. The team fought to
conceal the $48.9 million in profits over the last two years because the
revelation would have prompted county commissioners to insist the team
provide more funding. Loria, an art dealer with a net worth of hundreds of
millions, wouldn’t stand for that. He wanted as much public funding as
possible – money that could’ve gone toward education or to save some of
the 1,200 jobs the county is cutting this year.
Surely Samson was joking when he called the leak of the Marlins documents
and those of five other teams “a crime.” No, the real misdeed occurred
when the head of a professional sports franchise misled the public in order
to secure money that wasn’t his. When Forbes in 2007 reported the Marlins
had the highest operating income in baseball, Samson denied the team
profited, saying: “Very often the mistake that’s made is they look at revenue
sharing numbers and the team’s payroll and take the difference and see
profit without looking at our expenses.”
Well, now we have a look, and it’s clear what happened: The Marlins loaded
money into their coffers and held hostage a city afraid of losing a team,
then leveraged it into a sweetheart deal like so many teams across
baseball during the stadium boom of the last 20 years.
“It’s not that teams need new stadiums, either,” said Neil deMause, whose
book “Field of Schemes” blew the lid off ballpark boondoggles. “They need
new revenues. It’s really just a bailout. It would be cheaper to just give the
have funded a much greater portion of the ballpark. In 2009, when the
Marlins started spending some of their profits on their portion of the stadium,
they still had an operating income of $11.1 million. The team fought to
conceal the $48.9 million in profits over the last two years because the
revelation would have prompted county commissioners to insist the team
provide more funding. Loria, an art dealer with a net worth of hundreds of
millions, wouldn’t stand for that. He wanted as much public funding as
possible – money that could’ve gone toward education or to save some of
the 1,200 jobs the county is cutting this year.
Surely Samson was joking when he called the leak of the Marlins documents
and those of five other teams “a crime.” No, the real misdeed occurred
when the head of a professional sports franchise misled the public in order
to secure money that wasn’t his. When Forbes in 2007 reported the Marlins
had the highest operating income in baseball, Samson denied the team
profited, saying: “Very often the mistake that’s made is they look at revenue
sharing numbers and the team’s payroll and take the difference and see
profit without looking at our expenses.”
Well, now we have a look, and it’s clear what happened: The Marlins loaded
money into their coffers and held hostage a city afraid of losing a team,
then leveraged it into a sweetheart deal like so many teams across
baseball during the stadium boom of the last 20 years.
“It’s not that teams need new stadiums, either,” said Neil deMause, whose
book “Field of Schemes” blew the lid off ballpark boondoggles. “They need
new revenues. It’s really just a bailout. It would be cheaper to just give the
| . |
| . |
www.ambiente.us AUGUST |AGOSTO 2010
Voters duped on Marlins Stadium Deal?
Marlins’ profits came at taxpayer expense
By Jeff Passan
The swindlers who run the Florida Marlins got exposed Monday. They are as bad as
anyone on Wall Street, scheming, misleading and ultimately sticking taxpayers with
a multibillion-dollar tab. Corporate fraud is alive and well in Major League Baseball.
A look at the leak of the Marlins’ financial information to Deadspin confirmed the
long-held belief that the team takes a healthy chunk of MLB-distributed money for
profit. Owner Jeffrey Loria and president David Samson for years have contended
the Marlins break even financially, the centerpiece fiscal argument that resulted in
local governments gifting them a new stadium that will cost generations of
taxpayers an estimated $2.4 billion. They said they had no money to do it alone and
intimated they would have to move the team without public assistance.
In fact, documents show, the Marlins could have paid for a significant amount of the
new stadium’s construction themselves and still turned an annual operating profit.
Instead, they cried poor to con feckless politicians that sold out their constituents.
The ugliness of the Marlins’ ballpark situation is already apparent, and the building
doesn’t open for another 18 months. Somehow a team that listed its operating
income as a healthy $37.8 million in 2008 alone swung a deal in which it would pay
only $155 million of the $634 million stadium complex. Meanwhile, Miami-Dade
County agreed – without the consent of taxpayers – to take $409 million in loans
loaded with balloon payments and long grace periods. By 2049, when the debt is
due, the county will have paid billions.
Voters duped on Marlins Stadium Deal?
Marlins’ profits came at taxpayer expense
By Jeff Passan
The swindlers who run the Florida Marlins got exposed Monday. They are as bad as
anyone on Wall Street, scheming, misleading and ultimately sticking taxpayers with
a multibillion-dollar tab. Corporate fraud is alive and well in Major League Baseball.
A look at the leak of the Marlins’ financial information to Deadspin confirmed the
long-held belief that the team takes a healthy chunk of MLB-distributed money for
profit. Owner Jeffrey Loria and president David Samson for years have contended
the Marlins break even financially, the centerpiece fiscal argument that resulted in
local governments gifting them a new stadium that will cost generations of
taxpayers an estimated $2.4 billion. They said they had no money to do it alone and
intimated they would have to move the team without public assistance.
In fact, documents show, the Marlins could have paid for a significant amount of the
new stadium’s construction themselves and still turned an annual operating profit.
Instead, they cried poor to con feckless politicians that sold out their constituents.
The ugliness of the Marlins’ ballpark situation is already apparent, and the building
doesn’t open for another 18 months. Somehow a team that listed its operating
income as a healthy $37.8 million in 2008 alone swung a deal in which it would pay
only $155 million of the $634 million stadium complex. Meanwhile, Miami-Dade
County agreed – without the consent of taxpayers – to take $409 million in loans
loaded with balloon payments and long grace periods. By 2049, when the debt is
due, the county will have paid billions.
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teams the money. But then it would just look like a handout. The stadiums have
become part of the business model for teams.”
File illustration released by the City of Miami on Jan. 27, 2009, shows the proposed
new Florida Marlins baseball team's ballpark.
(AP Photo/City of Miami, HO, File)
Not nearly enough credit goes to the proliferation of new stadiums for turning the
game into a $6 billion-plus business. In case after case, teams built stadiums with a
majority of the funding from public sources and today keep nearly all of the profits
generated from games. Commissioner Bud Selig traveled city to city, the pied
piper of ballparks, urging voters or city councils or whoever held the checkbook to
do the right thing. Always left unsaid was his implication: Or else. However idle the
threat, it almost always worked.
And it’s still working. Even if Miami isn’t exactly a baseball town – the Marlins are
behind the Dolphins and Heat in popularity – Samson believes the new stadium on
the old Orange Bowl site will expand the team’s season-ticket base from around
5,000 to 15,000 or 20,000. If-you-build-it-they-will-come is nothing more than a myth,
proven false by Pittsburgh and Washington and Cincinnati.
It matters not how sparkling the new stadium is, though the
embellishments on the Marlins’ only add to the ridiculousness of the
whole project. Guess which of the following is not true:
a. The Marlins procured $5.3 million in funding from the county’s Art
in Public Places department and gave $2.5 million of it to pop artist Red
Grooms, who will design a piece with pelicans and seagulls and bright
colors and abstract shapes and, best of all, animatronic marlins that
celebrate home runs.
b. Billy the Marlin will hold nightly karaoke sessions in left field.
c. Behind the catcher will be 58 feet worth of reef-fish-stuffed
aquariums built into the backstop.
become part of the business model for teams.”
File illustration released by the City of Miami on Jan. 27, 2009, shows the proposed
new Florida Marlins baseball team's ballpark.
(AP Photo/City of Miami, HO, File)
Not nearly enough credit goes to the proliferation of new stadiums for turning the
game into a $6 billion-plus business. In case after case, teams built stadiums with a
majority of the funding from public sources and today keep nearly all of the profits
generated from games. Commissioner Bud Selig traveled city to city, the pied
piper of ballparks, urging voters or city councils or whoever held the checkbook to
do the right thing. Always left unsaid was his implication: Or else. However idle the
threat, it almost always worked.
And it’s still working. Even if Miami isn’t exactly a baseball town – the Marlins are
behind the Dolphins and Heat in popularity – Samson believes the new stadium on
the old Orange Bowl site will expand the team’s season-ticket base from around
5,000 to 15,000 or 20,000. If-you-build-it-they-will-come is nothing more than a myth,
proven false by Pittsburgh and Washington and Cincinnati.
It matters not how sparkling the new stadium is, though the
embellishments on the Marlins’ only add to the ridiculousness of the
whole project. Guess which of the following is not true:
a. The Marlins procured $5.3 million in funding from the county’s Art
in Public Places department and gave $2.5 million of it to pop artist Red
Grooms, who will design a piece with pelicans and seagulls and bright
colors and abstract shapes and, best of all, animatronic marlins that
celebrate home runs.
b. Billy the Marlin will hold nightly karaoke sessions in left field.
c. Behind the catcher will be 58 feet worth of reef-fish-stuffed
aquariums built into the backstop.
Sadly, $2.4 billion is not enough to buy mascot sing-alongs.
It is enough to stink. In the annals of bad stadium deals, it’s among the most odious, right
alongside the Washington Nationals’ extraction of $611 million from the D.C. city council
to get Nationals Park built. The team spent $20 million on a parking garage and pays $5.5
million a year in rent. So desperate was Washington to become the landing spot for the
Montreal Expos, it ignored reality – there were no other legitimate options for MLB – and
vastly overpaid.
Such sentiments are echoed when looking at the Marlins’ deal. One of the county’s loans
is particularly egregious. According to the Miami Herald, J.P. Morgan gave a $91 million
note – $80 million of which will go toward construction – that from 2041-47 will cost $118
million per year. In all, the county will spend $1.2 billion to pay off $91 million.
One of the county commissioners who voted against the funding, Katy Sorenson, told the
Herald: “It is very expensive money.” The county is banking on inflation making $118 million
a relative pittance by the 2040s, by which time Hanley Ramirez(notes) will be social
security age.
It’s entirely possible – and quite probable – that the Marlins profited more than $91 million
in the three years leading up to the county commissioners’ passing the stadium plan in ’08,
even with their games at Sun Life Stadium, supposedly the only thing holding the team
back from being able to spend on payroll. The inclination to keep salaries at pathetic
levels – a dozen players around baseball each made more in 2006 than the entire Marlins
team – went unchecked until last offseason, when MLB finally reprimanded the Marlins for
purloining too much of the $75 million or so in revenue sharing and Central Fund monies
they receive annually.
It was nothing more than a slap on the wrist. MLB knew the Marlins were saving their
money to pay off their stadium debt, which, though prudent, does not support Samson’s
contention Monday that “we could have had [Miguel] Cabrera but no ballpark.” That’s
more propaganda, more truth-stretching. With the new revenue streams, the Marlins
could have kept Cabrera. They essentially sandbagged half a decade worth of games by
using their money to cover their $155 million on the stadium’s construction, $35 million of
which will be rent payments and some of which likely will be subsidized by naming rights.
It is enough to stink. In the annals of bad stadium deals, it’s among the most odious, right
alongside the Washington Nationals’ extraction of $611 million from the D.C. city council
to get Nationals Park built. The team spent $20 million on a parking garage and pays $5.5
million a year in rent. So desperate was Washington to become the landing spot for the
Montreal Expos, it ignored reality – there were no other legitimate options for MLB – and
vastly overpaid.
Such sentiments are echoed when looking at the Marlins’ deal. One of the county’s loans
is particularly egregious. According to the Miami Herald, J.P. Morgan gave a $91 million
note – $80 million of which will go toward construction – that from 2041-47 will cost $118
million per year. In all, the county will spend $1.2 billion to pay off $91 million.
One of the county commissioners who voted against the funding, Katy Sorenson, told the
Herald: “It is very expensive money.” The county is banking on inflation making $118 million
a relative pittance by the 2040s, by which time Hanley Ramirez(notes) will be social
security age.
It’s entirely possible – and quite probable – that the Marlins profited more than $91 million
in the three years leading up to the county commissioners’ passing the stadium plan in ’08,
even with their games at Sun Life Stadium, supposedly the only thing holding the team
back from being able to spend on payroll. The inclination to keep salaries at pathetic
levels – a dozen players around baseball each made more in 2006 than the entire Marlins
team – went unchecked until last offseason, when MLB finally reprimanded the Marlins for
purloining too much of the $75 million or so in revenue sharing and Central Fund monies
they receive annually.
It was nothing more than a slap on the wrist. MLB knew the Marlins were saving their
money to pay off their stadium debt, which, though prudent, does not support Samson’s
contention Monday that “we could have had [Miguel] Cabrera but no ballpark.” That’s
more propaganda, more truth-stretching. With the new revenue streams, the Marlins
could have kept Cabrera. They essentially sandbagged half a decade worth of games by
using their money to cover their $155 million on the stadium’s construction, $35 million of
which will be rent payments and some of which likely will be subsidized by naming rights.
| . |
Every cent from inside the stadium will end up on the Marlins’ balance sheets. Come 2012, they’ll be free
to reap their revenue-sharing, Central Fund and ballpark profits while the county prays enough tourism-
tax dollars pour in to help pay off the loans.
“[Owners] simply don’t tell the truth about the finances,” deMause said. “Or if they do, it’s in such a
narrow way.”
Take a January 2008 luncheon Tampa Bay Rays president Matt Silverman spoke at in St. Petersburg.
According to the St. Petersburg Times, in front of a crowd of businesspeople, Silverman declared: “We’
re cash-flow negative.”
The Deadspin documents show the Rays were anything but in the red. In fiscal 2007, which had ended
exactly 26 days before Silverman spoke, the Rays’ operating income was $21.7 million. And, if Silverman
cares to quibble, the Rays listed $37,626 on the line of “cash and cash equivalents.” While in 2008 the
Rays’ earnings dropped to $14,202,206, they didn’t have any kind of a cash-flow problem: Their cash and
cash equivalents were $32,521,742.
It brings to mind the famous quote from Paul Beeston, the former president of MLB who now runs the
Toronto Blue Jays: “Under generally accepted accounting principles, I can turn a $4 million profit into a
$2 million loss, and I can get every national accounting firm to agree with me.”
The truth of big business is ugly, and while a peek inside baseball’s sausage factory is fascinating, it’s also
sobering. A 37,000-seat, baseball-only stadium is going up in Little Havana right now, and the team that
procured it systematically hid the truth from the people whose money they’re using to build it.
During the county commissioners’ stadium tete-a-tetes with the Marlins, they asked time and again for
the team to release its financial statements. It was only fair, right? The county was willing to pledge
billions of dollars. It deserved to know who would reap the bounty.
The Marlins never budged. They kept everything a secret and set themselves up for a bountiful future
and had the gall to grow angry when documents surfaced that should’ve been made public in the first
place. They were shown for the swindlers they are.
Unfortunately, it was $2.4 billion too late
Copyright © Yahoo Sports & AMBIENTE MAGAZINE. Do not reproduce without citing this source
to reap their revenue-sharing, Central Fund and ballpark profits while the county prays enough tourism-
tax dollars pour in to help pay off the loans.
“[Owners] simply don’t tell the truth about the finances,” deMause said. “Or if they do, it’s in such a
narrow way.”
Take a January 2008 luncheon Tampa Bay Rays president Matt Silverman spoke at in St. Petersburg.
According to the St. Petersburg Times, in front of a crowd of businesspeople, Silverman declared: “We’
re cash-flow negative.”
The Deadspin documents show the Rays were anything but in the red. In fiscal 2007, which had ended
exactly 26 days before Silverman spoke, the Rays’ operating income was $21.7 million. And, if Silverman
cares to quibble, the Rays listed $37,626 on the line of “cash and cash equivalents.” While in 2008 the
Rays’ earnings dropped to $14,202,206, they didn’t have any kind of a cash-flow problem: Their cash and
cash equivalents were $32,521,742.
It brings to mind the famous quote from Paul Beeston, the former president of MLB who now runs the
Toronto Blue Jays: “Under generally accepted accounting principles, I can turn a $4 million profit into a
$2 million loss, and I can get every national accounting firm to agree with me.”
The truth of big business is ugly, and while a peek inside baseball’s sausage factory is fascinating, it’s also
sobering. A 37,000-seat, baseball-only stadium is going up in Little Havana right now, and the team that
procured it systematically hid the truth from the people whose money they’re using to build it.
During the county commissioners’ stadium tete-a-tetes with the Marlins, they asked time and again for
the team to release its financial statements. It was only fair, right? The county was willing to pledge
billions of dollars. It deserved to know who would reap the bounty.
The Marlins never budged. They kept everything a secret and set themselves up for a bountiful future
and had the gall to grow angry when documents surfaced that should’ve been made public in the first
place. They were shown for the swindlers they are.
Unfortunately, it was $2.4 billion too late
Copyright © Yahoo Sports & AMBIENTE MAGAZINE. Do not reproduce without citing this source
| . |
