Jeter can’t move Marlins sculpture, D-Backs suit kicked to arbitrator, and more stadium news

Extra-super-brief news roundup this week, regular programming to resume next Thursday:

That’s it for now. Que vagi bé, i fins ara.

Miami is paying Jeff Loria’s share of All-Star policing costs, just because

And speaking of city officials lying down on the job and the All-Star Game, apparently Miami-Dade County got Miami Marlins owner Jeffrey Loria to promise to pay for security costs for this year’s game, but then the city of Miami went and paid for them anyway:

Under the team’s operating agreement for its heavily subsidized $515 million stadium, the Marlins are supposed to pay for off-duty police and fire services for “jewel events,” such as the All-Star Game…

Back in February, when the team asked the county to support the event by providing its police officers and firefighters free of cost, Miami-Dade Mayor Carlos Gimenez told the team that it would have to pay the bill due to the terms of its operating agreement…

But the team’s operating contract didn’t stop the city from agreeing early on to pick up the tab. Back in 2014, Miami Mayor Tomás Regalado — who like Gimenez used his opposition to the Marlins’ controversial stadium agreement to help win his election — committed in a letter to then-Baseball Commissioner Bud Selig that the city would pay for public safety “subject to available resources.”

This is actually slightly different from Boston’s arena charity contribution gaffe, in that Miami city officials knew that the Marlins were on the hook for police and fire services, then decided to go ahead and pay for it with public funds anyway, because it would make MLB happy and get them to award the game to Miami. I’ll leave it as an exercise for readers to decide whether that’s better or worse, but one thing is clear: Getting something put in writing isn’t worth much if the people signing it can arm-twist the government to take it back whenever they like it.

Loria sues to seize $725,000 building for fan’s nonrenewal of Marlins tickets

I may have just written an article for Vice Sports on how Miami Marlins owner Jeffrey Loria’s windfall from selling the team isn’t really the result of the stadium subsidies he got — those stadium subsidies look to have just gone down a hole, huzzah! — but that doesn’t mean I can’t appreciate and agree with this lede from Miami New Times’s Tim Elfrink:

Tens of thousands of baseball fans, officials, and journalists have arrived in Miami today for one reason: to see the worst owner in professional sports for themselves.

(Though when I mentioned this, I did have one person ask me: “What, James Dolan is visiting Florida?”)

As good as that opening line is, the main point of the article is even better: Loria, not content with suing his fans for canceling their season tickets to his terrible team, is now trying to seize a commercial building owned by one fan as compensation:

Loria’s team is suing a fan named Kenneth Sack in Broward County to take a $725,000 building he owns in Oakland Park — all as part of the same ugly dispute that has led the team to sue at least nine season ticketholders and luxury-suite owners since 2003

In January, the team won a judgment against Sack for the full $97,200, but his attorney appealed because the lawyer had missed key hearings and filings after suffering a heart attack and spending months in the hospital. That civil case remains open.

But in the meantime, the team has used that judgment to try to nab a building owned by Sack. On March 12, the Marlins initiated a foreclosure proceeding for a commercial building Sack owns in Oakland Park, arguing that they can seize the property to fulfill the $97,200 he owes them; they ask the judge to appoint a receiver so they can begin collecting rent from the location. (Oddly, county property appraisers say the building at 5090 N. Dixie Hwy. is actually worth $725,000.)

Concludes Elfrink: “The Marlins have so deeply ruined the relationship with their fans that it’s a fair question whether professional baseball can ever recover in Miami. For now, be warned: Don’t sign any contracts with the Fish unless you’re ready for them to come after your property if things go sour.” Have fun with your new $1.2 billion toy, next billionaire in line to own the Marlins!

Jeff Loria will get Marlins windfall, but probably not because of his $900m stadium subsidy

The New York Times’ Ken Belson ran an article yesterday noting that Miami-Dade County Mayor Carlos Gimenez is annoyed that Miami Marlins owner Jeffrey Loria is set to sell his team for $1.2 billion after getting hundreds of millions of dollars in stadium subsidies from taxpayers:

“I would think he’ll walk away with $500 million in his pocket,” Mr. Gimenez said. “It sticks in my craw.”

The Marlins subsidy — which was for around $500 million in construction costs but which thanks to some terrible loan terms ended up costing taxpayers around $900 million in present-value terms — is worth being annoyed about, absolutely. But is Loria really getting a $500 million windfall as a result?

The numbers available are these:

  • Loria bought the Marlins in 2002 for $158 million, $120 million of which he got as a payment from MLB for the Montreal Expos, which he’d previously owned.
  • The reported sale price for the Marlins today is $1.2 billion, though a buyer hasn’t been settled on yet (and it apparently won’t be Derek Jeter and Jeb Bush after they couldn’t agree on who’d be in control).
  • Belson reports that the Marlins are $400 million in debt, a widely reported number that it isn’t clear whether it’s stadium construction debt, money borrowed to pay payroll, or what.

So let’s say that Loria is set to walk away with $800 million in cash for a team that he spent $158 million on fifteen years ago, for a 406% profit, or an 11.41% annualized return on investment. Is that the result of getting a subsidized new stadium?

One of the difficulties of figuring out what sports teams are “worth” is they’re only sold infrequently, so we can’t exactly say what a normal appreciation of value looks like. There are a few data points, though: The best example we have over a similar time period is the Los Angeles Dodgers, which were sold by NewsCorp to Frank McCourt in 2004 for $430 million; McCourt turned around and sold the team to Magic Johnson and his partners in 2012 for $2 billion, which is an annualized return of 21.16% — all without getting a new stadium.

We can also look to the annual Forbes team value numbers, which are guesstimates at best but at least give us a league-wide baseline. In 2002 the average MLB team, according to the magazine, was worth $286 million. In 2017, with ten teams having opened new stadiums in the interim and 20 still playing in the same venues, that number is $1.54 billion — an annualized return of 11.87%, meaning Loria’s windfall is almost exactly the league average.

Let’s look at one more metric: annual revenue figures, per Forbes, which are much more accurate than the magazine’s team value numbers. (As we know thanks to Marlins financial documents leaked to Deadspin in 2010 that almost exactly matched the Forbes numbers.) Between 2008 and 2017, per Forbes, the Marlins’ annual revenue went from $128 million to $206 million, an increase of 61%. Over the same time, the average team revenue went from $183 million to $292 million, an increase of 60%; hell, even the Marlins’ famously stadium-deprived cross-state rivals the Tampa Bay Rays, meanwhile, saw their annual revenue go from $138 million to $205 million, a 49% jump.

The story here, then, is not of a city that threw $900 million at its local baseball team owner and saw him walk away with almost all of it in cash. It’s of a team owner who, despite owning a team that was highly profitable — as proven by those same leaked Deadspin documents — demanded a new stadium from taxpayers, got it, saw his team continue to draw poorly since it turned out the thing that fans wanted wasn’t to see the same below-average players lose games under a giant roof, then walked away with a windfall profit regardless thanks to a combination of the cable bubble and a growing number of billionaires seeking to own a limited number of sports teams.

In short, Marlins Park looks like it wasn’t just a waste of money for Miami taxpayers, but it didn’t even really help Loria, who would have been just as obscenely wealthy even if he’d let the team keep playing at its old stadium. I’m not honestly sure whether being a pointless new toy is more or less appalling than being a scam to get windfall profits, but it’s certainly different.

Bush-Jeter $1.3b Marlins bid probably isn’t due to subsidies, but go hate Jeff Loria anyway

So it looks like this is probably happening:

A group including [Derek] Jeter and Jeb Bush, the former Florida governor and presidential candidate, has reached a tentative agreement to buy the Miami Marlins, according to two people briefed on the situation who requested anonymity because the deal is not official…

Bloomberg first reported that the Jeter-Bush group was within reach of buying the team. The Miami Herald reported that the sale price would be $1.3 billion.

Aside from all the obvious jokes — Jeter and Bush will get along great, neither can go to his left — the interesting thing for stadium-subsidy watchers is: How much of this $1.3 billion windfall for Jeffrey Loria, who bought the Marlins for $158 million (most of which was funded by his simultaneous sale of the Montreal Expos to MLB) in 2002, is attributable to the nearly billion-dollar public subsidy Loria received for his new stadium, and how much is just that baseball franchises keep appreciating like Brooklyn real estate?

A quick look at the Forbes team value page for the Marlins shows that year-to-year operating income has actually gone down since Marlins Park opened in 2012, which makes sense, since the team has spent (somewhat) more on player payroll since then and Marlins attendance is still pretty lousy. Forbes estimates that the team’s overall value has soared regardless, from $256 million in 2008 to $940 million in 2017 (Forbes values tend to lag a bit behind actual sale prices), but then, the Tampa Bay Rays‘ estimated value leaped from $290 million to $825 million over the same time period without the benefit of a new stadium, so maybe the stadium dough wasn’t that big a help after all, though you can see where you might get a small sale price premium for playing in a new stadium nobody wants to go to instead of an old stadium nobody wants to go to.

If Loria does walk away with $1.3 billion — and Forbes’ Mike Ozanian, citing his own unspecified “sources,” claims that the Jeter-Bush group’s bid is far from formal or finalized, and the Wall Street Journal’s Matthew Futterman and Jared Diamond concur — it might be fair to gripe that he’s walking away with a taxpayer-backed windfall. But it’s an equally valid assessment to say that after spending ten years shaking down Florida taxpayers for an $800-million-or-so subsidy for a stadium that didn’t help him or his team at all, Loria is throwing up his hands and selling the Marlins to a new set of suckers — who will probably re-enact this whole scenario in another decade or two. The nice thing about being a rich dude is you don’t have to learn from your mistakes, you can just cash out and walk away.

Loria mulls selling Marlins to Ivanka Trump’s brother-in-law, our dystopian future is now

Miami Marlins fans and baseball followers in general have been waiting for decades to get rid of Jeffrey Loria, the evil mastermind who got Miami taxpayers to give him half a billion dollars for a new stadium so he could afford to buy better players and then said, Crap that, I’d rather keep the new stadium and still get the cheapest players I can so I can collect revenue-sharing checks from MLB. So any deal that removes this guy from the owner’s chair would be good, right? How about if it means Loria walking away with up to $1.6 billion and the team being run by Ivanka Trump’s brother-in-law?

The Kushners — led by Joshua Kushner, a venture capitalist, and Joseph Meyer, his brother-in-law and key lieutenant for the family’s investments — have pursued the Marlins for several months, devising a complicated financial arrangement that would include bringing in partners later, these people said. Mr. Kushner is the younger brother of Jared Kushner, Mr. Trump’s son-in-law.

Neither Jared Kushner, who married Ivanka Trump in 2009 and is a top White House adviser, nor Charles Kushner, the family patriarch who spent over a year in prison for illegal campaign donations, tax evasion and witness tampering, is participating in the effort, these people said.

While I don’t want to judge the son on the sins of the father, this is a somewhat problematic family to consider inviting into MLB, to say the least. And according to the New York Times, MLB has qualms about it as well:

The deal has already prompted questions within Major League Baseball, according to the people briefed on the conversations, about what kind of relationship Mr. Trump would have to the team and whether that would be a benefit or a disadvantage. Would fans or sponsors boycott or embrace the team or league based on a comment or Twitter post by Mr. Trump? And would Mr. Trump attend games?

(And if he did attend games, would he insist that they were really sellouts? <rimshot>)

The one silver lining of a Marlins sale to the Kushners: Taxpayers would get a cut of any sale price, according to its stadium deal, though given the complex formula for calculating that, Miami Dade County’s chief financial officer says he’d have to figure out what the county would have coming to it, guessing only that it would be “several million dollars.” This does not seem like proper compensation for getting out of the frying pan only to enter the Trump family fire, but the decision is in Loria’s hands. And we know that we can trust him to … okay, never mind.

Jeffrey Loria sues own fans, because it was only space remaining on his supervillain bingo card

You know, it’s tough to be an internationally known supervillain. Take Miami Marlins owner Jeffrey Loria: He’s already gotten the city of Miami to give him around $800 million because he said he needed it to build a better team and stop holding fire sales of all his best players, immediately thereafter held a fire sale of most of his best players, and let his team’s minuscule number of fans experience the world’s first rain delay at a stadium with a roof. What, oh what can he do for an encore? How about, oh, I don’t know, suing one of your most dedicated fans for declining to renew his season tickets?

During numerous sales pitches, [Mickey] Axelband says, the Marlins promised first-floor parking in the stadium garage and a private entrance. There would also be a lounge with pre- and postgame buffets so season ticket­holders could arrive early or hang out late. Axelband happily paid $24,000 for the two-seat package (that’s $148 per seat for each game) — nearly double the $13,000 he’d ponied up for the final year at Dolphin Stadium. He agreed to a two-year deal. Although only the private lounge was actually written into the contract, Axelband says he had no reason to believe the team wouldn’t follow through.

But Marlins Park wasn’t the success the team had hoped for. By midseason, crowds had dwindled to near Dolphin Stadium levels, and the team began slashing expenses. Those nearby parking spaces? Gone. The private entrance? Closed to save money on the extra usher manning the door. The buffet was stocked with the same bland panini for every game. Soon the team shut it down in the sixth inning.

These all might seem like small details, but “that’s exactly what we paid all the extra money for,” he says. Worst of all, Axelband says when he wrote the team to complain, the Fish weren’t sympathetic. “I didn’t want my money back or anything, but I said, ‘Please give me back the stuff you promised.’ The answer I got back was basically, ‘Yeah, we know we took it all away, but tough shit.’ “

Axelband responded by telling the Marlins he wanted to cancel his season tickets, at which point Loria’s minions responded in the one way guaranteed to maintain their villainous reputation: They sued him, along with eight other season ticket and suite-holders, for breach of contract. The Marlins owners are also suing two concessionaires who bailed out of deals to be vendors at the stadium, one of whom filed for bankruptcy after he says stadium sales were less than half what team representatives had promised.

As Fort Lauderdale sports law attorney Darren Heitner told the Miami New Times, which uncovered the story, “I’m not sure the Marlins thought this through. If you’re contemplating getting season tickets, now you’re worried you won’t get everything you bargained for and you even might end up in litigation.” That might be true in normal logic, but supervillains operate by spreading fear: Jeffrey Loria isn’t about selling tickets by making Marlins fans think they’ll get something for their money. He’s about selling tickets by building a death ray.

Rival exec calls Marlins “a joke” for soaking fellow owners even after soaking Miami taxpayers

CBS Sports’ Jon Heyman reports that some (unnamed) MLB owners are griping that Miami Marlins owner Jeffrey Loria keeps getting big revenue-sharing checks from the league — reportedly $50 million a year, the biggest of any MLB franchise — despite getting the new stadium that they said was necessary to get them back on their financial feet. “They’re a joke,” Heyman quoted one rival team exec as saying.

While much of this is no doubt posturing ahead of next year’s labor contract talks — which will include discussions of any new revenue-sharing formula — the interesting part is the seeming assumption that with enough new stadiums, MLB can lift all boats. By now, almost every team has a new stadium, and somebody has to be at the bottom of the revenue scale, by definition. Miami may be a big market in terms of TV households, but for various reasons (too many recent transplants, too many other things to do in the summer) Florida has been an iffy sports market in general, so it really shouldn’t be unexpected that a shiny new stadium with ugly sculpture wouldn’t be enough to get people out to see a lousy team.

If this is more than just some big-market owner griping that Loria is making money by fielding the cheapest team possible and getting a cut of national revenues — something that’s been true for a while, and is either fiendishly brilliant or brilliantly fiendish, depending on your perspective — it seems like some baseball execs are drinking their own Kool-Aid, and thinking that new stadiums really are magic money machines that can make everyone a winner at the same time. This is going to be one entertaining CBA negotiation.

Miami to declare Marlins’ stadium “blighted” so it can spend tax money on Beckham MLS stadium next door

The public subsidy details are starting to emerge for David Beckham’s proposed MLS stadium next to the Miami Marlins‘ baseball stadium: On top of about $35 million in property tax breaks, it now looks like Miami-Dade County would be buying the land for Beckham, and doing so by creating a redevelopment agency to use city and county tax dollars to pay for the stadium land and a possible light rail station:

The agency’s boundaries are suggested to be Flagler Street to the South, Northwest 22nd Avenue to the west, and the Miami River to the north and east, though the resolution says the study being sought could expand that area if needed.

Community redevelopment agencies by statute create trust funds that retain 95% of the increase in tax revenues from their area above the taxes that were collected before the agency was born. The agency uses that money to finance or refinance any redevelopment it undertakes. In this case, it would include stadium land and Metromover construction, though it could include more.

This would be tax-increment financing, in other words, with all the attendant problems thereof. And because redevelopment agencies can only be used for areas in need of redevelopment, this would require the area to be declared “slum and blighted” — including the Marlins’ stadium that opened next door just three years ago in the last attempt at revitalization. This is not going to help get people to Marlins’ games.

Everybody in Miami has given up hope of economic boom from stadiums, except guy paid to say so

With Miami officials talking about helping David Beckham build a new soccer venue, thoughts naturally turn to the possible economic impact on the surrounding neighborhood. Unfortunately, there’s a perfect case study right next door in the Marlins‘ stadium, and it is a uniformly dismal one, as the Miami Herald’s David Smiley points out:

The 26,000 fans leaving in streams large enough to snarl traffic are mostly walking into the surrounding neighborhood toward their cars — not the businesses that Miami’s politicians and the team said would thrive in the Marlins’ shadow.

“The Marlins …” says [Ysbel] Medina, whose bar is mostly empty, save a few stragglers drinking draft beers and eating cheeseburgers. “Man, the Marlins. I don’t know what to say about them.”

Well into a fourth disappointing season in the new stadium, little has changed in the surrounding neighborhood. Predictions that restaurants, cafeterias and hotels would open around the publicly funded park have proved false. The area surrounding the stadium is still pocked with small strip malls, empty lots, vacant buildings and affordable housing. Even the city-owned retail stores in the parking garages surrounding the stadium remain mostly empty.

It doesn’t help, obviously, that the Marlins are the Marlins, still among the bottom five teams in attendance despite a new stadium that offers protection from the elements. (Pro tip: Baseball fans are more interested in protection from having to watch teams that lose 60% of their games.) But even the 1.7 million fans that the Marlins drew last year would have been more than double that of any team in MLS (thanks to the longer baseball season), making it dubious whether any “restaurants, cafeterias, and hotels” will be any more excited about siting nearby just because a couple dozen soccer dates are on the menu.

Hope springs eternal, though, if you’re the economic consulting firm chief who was hired by the city of Miami to project a huge windfall for the local economy from the new Marlins’ stadium:

Tony Villamil, the economist who said the Marlins would pump $300 million in annual business into the local economy once the team began playing ball, says there are local businesses that do make good money providing services to the stadium, and it’s too early to claim failure on sports’ promised impact to Little Havana. He said the idea that an entertainment district would pop up around the stadium was always a long-term vision, and one that required zoning changes in the area around the stadium, which never happened.

“If you do soccer, now you’ve got almost year-round entertainment,” he said.

Actually, 81 baseball home games plus 17 soccer home games is way, way short of year-round. But given that Villamil’s actual study came up with that $300 million in annual impact figure just by adding up all the money projected to be spent at Marlins games and then applying a multiplier — without attempting to account for, say, money that now wouldn’t be spent at Marlins games at the old stadium, let alone how much would substitute for money that would otherwise have been spent on other entertainment options — maybe we shouldn’t expect much here in the way of math.