What Games are the Marlins Playing with this Stadium Financing Plan?
Over the weekend, Sun-Sentinel columnist Mike Berardino penned a nice column debating the merits of the Marlins pursuit of free agent slugger Carlos Delgado compared to using that money to fund a new ballpark.
What’s lost in all the discussion of whether or not the Marlins really have the financial ability to lure a player of Delgado’s caliber instead of building a new ballpark for themselves is that the Fish – or their owners really – don’t have as much incentive to have a new ballpark built as one might think. Well, at least they don’t have that incentive right off the bat.
When Jeffrey Loria bought the Marlins back in early 2002, he took out a loan from Major League Baseball for $38 million. That’s all well and good, and was necessary to get the deal done at the time. However, some of the fine print of the deal could be causing some snags now:
So, at this point, the Marlins are in year three of the Loria ownership. They’re about halfway to the point of being able to have $15 million of a loan forgiven, and halfway to not having to share the profits of their new ballpark with MLB and the league’s other owners.
What isn’t clear here is what “if the Marlins do not get a new park within five years” means. Sure, this is a little bit like Bill Gates stating, “Well that depends on what your definition of ‘is’ is.” But without access to the specifics of the contract, we do not know if to have the loan forgiven and to not have to share their profits if the Marlins would have to agree to the deal more than five years after they took ownership of the club, or if the five year period includes the team being moved into the new ballpark.
Given the Marlins’ owners history of questionable dealings in the past (ask the former minority of the owners for their opinions), there seems to be much more to the story here than we can piece together from what’s being reported in the media.
On the one hand, Dolphins Stadium owner Wayne Huizenga wants the Marlins, tenants of his stadium for 81 days per year, off the premises as soon as possible. Instead of hosting the Marlins, Huizenga instead wants to host cricket and soccer matches, as well as trade shows.
At the same time, the Marlins regularly cry poor. They allegedly lost money even during their 2003 World Series season. The Marlins also claim that under the terms of their lease agreement Huizenga and Dolphins Stadium, they can’t realistically expect to make money. Thus they can’t afford high priced talent (even retaining their own players), so they won’t be able to remain competitive over the long haul.
Then the Marlins go out and raise the ante for a slugger coming off an injury plagued season (not to knock Delgado here – I like him as a player and think he’s due for a monster 2005 campaign; the money is the issue here).
So what’s the deal? Are the Marlins and Loria really committed to winning? Why are they willing to shell out $35 to $40 million to Carlos Delgado and not willing to contribute $30 million to their new stadium? Is it because if the agreement about a new stadium is delayed for another year or two that they’ll have $15 million in debt forgiven and not have to share 20% of their profits with Major League Baseball?
There’s more going on here than meets the eye folks. The A’s may have taken first dibs on the relocating to Las Vegas, but don’t go getting your hopes up about seeing the Marlins in Miami for a long time either.
What’s lost in all the discussion of whether or not the Marlins really have the financial ability to lure a player of Delgado’s caliber instead of building a new ballpark for themselves is that the Fish – or their owners really – don’t have as much incentive to have a new ballpark built as one might think. Well, at least they don’t have that incentive right off the bat.
When Jeffrey Loria bought the Marlins back in early 2002, he took out a loan from Major League Baseball for $38 million. That’s all well and good, and was necessary to get the deal done at the time. However, some of the fine print of the deal could be causing some snags now:
The person who spoke about the loan said Loria would pay no interest the first
couple of years. If the Marlins do not get a new park within five years, $15
million of the loan will be forgiven, and Loria will owe baseball only $23
million with no interest on the balance. But, said another person familiar
with the transaction, if the team gets a new park, baseball would receive 20
percent of the Marlins' profits for the first five years. (Link)
So, at this point, the Marlins are in year three of the Loria ownership. They’re about halfway to the point of being able to have $15 million of a loan forgiven, and halfway to not having to share the profits of their new ballpark with MLB and the league’s other owners.
What isn’t clear here is what “if the Marlins do not get a new park within five years” means. Sure, this is a little bit like Bill Gates stating, “Well that depends on what your definition of ‘is’ is.” But without access to the specifics of the contract, we do not know if to have the loan forgiven and to not have to share their profits if the Marlins would have to agree to the deal more than five years after they took ownership of the club, or if the five year period includes the team being moved into the new ballpark.
Given the Marlins’ owners history of questionable dealings in the past (ask the former minority of the owners for their opinions), there seems to be much more to the story here than we can piece together from what’s being reported in the media.
On the one hand, Dolphins Stadium owner Wayne Huizenga wants the Marlins, tenants of his stadium for 81 days per year, off the premises as soon as possible. Instead of hosting the Marlins, Huizenga instead wants to host cricket and soccer matches, as well as trade shows.
At the same time, the Marlins regularly cry poor. They allegedly lost money even during their 2003 World Series season. The Marlins also claim that under the terms of their lease agreement Huizenga and Dolphins Stadium, they can’t realistically expect to make money. Thus they can’t afford high priced talent (even retaining their own players), so they won’t be able to remain competitive over the long haul.
Then the Marlins go out and raise the ante for a slugger coming off an injury plagued season (not to knock Delgado here – I like him as a player and think he’s due for a monster 2005 campaign; the money is the issue here).
So what’s the deal? Are the Marlins and Loria really committed to winning? Why are they willing to shell out $35 to $40 million to Carlos Delgado and not willing to contribute $30 million to their new stadium? Is it because if the agreement about a new stadium is delayed for another year or two that they’ll have $15 million in debt forgiven and not have to share 20% of their profits with Major League Baseball?
There’s more going on here than meets the eye folks. The A’s may have taken first dibs on the relocating to Las Vegas, but don’t go getting your hopes up about seeing the Marlins in Miami for a long time either.
posted by Mike @ Thursday, January 20, 2005
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