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August 25, 2010
MLBleakgate Watch: Wait, Marlins weren't really going broke without a new stadium?
Okay, the Great Baseball Financial Document Foofaraw is taking a weird turn. Today's meme is that the fact that the Florida Marlins have been turning a profit shows that they didn't really need that $478 million in public stadium subsidies after all. As Yahoo! sportswriter Jeff Passan put in a column last night:
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.
Equally outraged are Miami-Dade county commissioners — or at least, the ones who voted against the stadium deal in the first place. Commissioner Carlos Gimenez told the Miami Herald: "[The idea] is horrible and the financing is even worse. And now you see they took us for a ride ... I tried to make it a condition on the contract that we see the books. This shows me they could have put more into the stadium than they did. We could have sold less bonds." Added Commissioner Joe Martinez: "None of us were aware of this. ... I do believe that if some people had known they were taking a profit, they would have voted differently."
Not to say "I told you so" or anything, but... seriously, didn't anybody bother to read Forbes before this? You know, the magazine that estimated that the Marlins were turning a $43.7 million profit in 2008, as against the leaked documents' $39.2 million? If, as Martinez insists, "none of us" on the county commission were aware of this, then that betrays a pretty serious failure of background research by Miami's elected officials.
The real news, as the South Florida Sun-Sentinel's excellent Sarah Talalay makes clear in her blog post today, isn't that the Marlins were making a profit, but that team execs were lying when they claimed they weren't. Writes Talalay:
Each time Forbes released its annual team valuations, Samson disputed the figures saying he didn't know Forbes sources, but he also insisted the team wasn't making a profit, and if there was one, team owner Jeffrey Loria would put it back into the team.
There are several examples of this, but here's one from 2007, when Samson was asked about Forbes' reporting the Marlins had the highest operating income of the leagues' 30 teams at $43.3 million and with a league low payroll of $24.8 million:
"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," Samson said.
Marlins owner Jeffrey Loria "would want any dollar extra going into payroll," Samson said.
"What's happened is he committed to stop losing money, but he has never said he makes his living from the operation of the Florida Marlins. He simply doesn't want to lose all his money."
Finally, on the journalistic flip side, you have St. Petersburg Times sports columnist John Romano, who argues that the documents really show that the Tampa Bay Rays do need a new stadium, because while the team is turning a profit, it's only doing so because it's getting revenue-sharing money, and winning while spending less than the Yankees and Red Sox.
So let me see if I can follow the logic: Tampa Bay taxpayers should give money to the Rays for a new stadium because, even though the team right now is both winning and turning a profit, there are other teams that are able to win the same and turn a profit while spending more? Does Florida have some sort of citizen right to throw $16 million a year at A.J. Burnett that I don't know about?
UPDATE: Romano points out that his main argument was that if the Rays turned a $14 million profit in 2008, when they went to the World Series, they likely lost money last year, when they missed the playoffs and had a higher payroll.
That's a fair assessment, but it still makes for a weak case for a new stadium, which is still not going to put the Rays into the same spending echelon as the Yanks or Red Sox. At best, it might afford the Rays an extra $20 million or so a year — call it one Carl Crawford, or 1.2 A.J. Burnetts. Or, if they ran their team like Jeff Loria, a couple of Picassos.