Jeff Loria adds to supervillain status by stiffing Miami on share of Marlins sale

Remember how, when Miami agreed to give a squillion dollars to Marlins owner Jeffrey Loria for a new stadium and in exchange was promised a share of the profits if Loria ever sold the team? Yeah, that’s not gonna happen:

The 2008 county agreement that had Miami-Dade fund the bulk of the $515 million government-owned stadium in Little Havana gave Miami-Dade and Miami the right to 5 percent of any profits Loria and partners might reap if they sold the team within 10 years. But Loria could deduct team debt, certain expenses and taxes tied to a sale, and county officials and team executives privately predicted Loria wouldn’t agree to give up any of his revenue from the October sale to Derek Jeter and partners…
In a brief report sent by Loria’s lawyers, his organization said the terms of the deal resulted in a profit-sharing calculation of zero. The reason? About $280 million in debt that lowered the profits from the $1.2 billion sale, plus an agreed-to underlying value of the franchise of about $625 million, based on it getting more valuable each year. Add in nearly $300 million in taxes tied to the sale by Loria and partners, and Loria’s accountants claim the sale amounted to a loss of $141 million. Loria also deducted the $30 million fee paid to the financial advisors hired to negotiate the deal.

So on the one hand, Loria does have a case here that his windfall profits from selling the team weren’t mostly because of the new stadium, as we’ve covered before. On the other, “Sure I sold my team for a 650% profit, but inflation, and also taxes, so sorry you can’t have any even though I promised” is a spectacular display of chutzpah. Loria may have just cinched his membership in the Evil League of Evil.

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11 comments on “Jeff Loria adds to supervillain status by stiffing Miami on share of Marlins sale

  1. To be fair to Loria (and I threw up in my mouth a little saying that), the contract he signed with Miami wasn’t really a profit sharing agreement. It was a fig leaf to make the deal look a bit less like a straight-up cash grab.

    The 2009 profit-sharing agreement ran roughly 10 years from the initial county deal with the team, which was signed in 2008. The profit-sharing provision was included in a non-relocation contract that reduced Loria’s required government payout as the years went by before expiring this year. He could have avoided the agreement altogether if he had waited to sell the team after March 2018.

    The biggest deduction allowed under the county deal is the original value of the team. The contract valued the franchise at $250 million in 2008, and allowed Loria to increase that starting value by 8 percent each year.

    1. $250 million compounded at 8% a year for 10 years is $539.73 million. Loria sold the team for $1.2 billion. So even if the agreement was a fig leaf, that still takes more than $650 million in cojones to insist that the profits were zero.

      1. Yes, but all of Loria’s BS deductions were explicitly allowed in the contract. Things like being able to deduct his capital gains taxes(!) were all in there.

        Loria is a snake, but Miami agreed to this. Like it says in the story, you knew he was a snake when you picked him up.

    2. I agree it was just a bullcrap easily circumventable clause inserted by a knowing politician so they could sell the stadium deal to an ill-informed public.

  2. Yet ironically, very shortly Loria won’t even be the Marlins’ most hated owner–Jeter & Company will be. For as bad has Loria fleeced the city, he outright robbed these new owners at gunpoint. They have no free cash for basic operations so immediately had to do a fire sale of all their good players AND they instantly started looking for more minority owners. It’ll be many years before they’ll ever be able to sell for any kind of profit so the Marlins are going to be a dead last team for the foreseeable future.

    1. They may well be dead last for ages. However that is not a foreign concept to Marlins fans… barring two improbable post season runs they have almost always been terrible. Also, we should remember what the (now World Champion) Astros roster looked like in 2014… it would have been charitable to call it a AAA lineup at the time. In the FA era, small market teams can generally only get good by being bad and drafting well with the results – and it doesn’t always work of course.

      Loria is a scumbag and deserves everything bad that might ever come his way. That said, he did not put a gun to anyone’s head – Jeter and co were willing buyers and he was a willing seller (for the right ridiculous price).

      If the buyer’s have buyer’s remorse, they have only themselves to blame. They could have walked away.

  3. … and all this surprises exactly no-one…

    As noted above these appear to be contractually allowed deductions (ridiculous though some of them are).

    Be careful whom you vote for people. And maybe do a little digging into their background and voting records before you re-elect any of them to second terms.

  4. I have to imagine that there’s some Loria-hating lawyer in Miami who’d be willing to help the County sue without costing too much.

    1. ROTFLMAO about those last four words. Lawyers who don’t cost much? Right, sure, you can find them right behind an ambulance.

      I am reminded of Al Ruddy, producer of “The Godfather” (and before that co-creator of “Hogan’s Heroes”) who negotiated an agreement with the Mafia to get “The Godfather” made (leaving out words like Mafia and Cosa Nostra). He said he would rather deal with mobsters than Hollywood lawyers. The mob keeps his word. As soon as the ink is dry, Hollywood lawyers look to break the contract anyway they can.

  5. Good for him. Miami sold their soul to keep a team that might be good for a season under Loria. More than once he did the Free Agent thing to create an incredible team, only to sell off on the back side of those great seasons.

    I’m glad he took advantage of Miami. Every other city/municipality/county should take notice that owners of pro franchises are more likely to be Loria-like than not.

    1. Good point. He stands as a shining example of just how bad a partner professional sports franchise owners can be (and frequently are).

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