Documents detailing the finances of the Florida Marlins’ and a handful of other Major League Baseball teams (reported by Deadspin.com), of course, reveal details we’ve never seen, but the team’s reaction to them is perhaps most surprising.
Of course, we’ve known the Marlins were making money and have even written as such repeatedly – despite the team’s protestations otherwise. While the release of the documents is, as Marlins President David Samson says, a crime, now that they're out there, here are some key details:
The Marlins brought in more than $75 million in both 2008 and 2009 from Major League Baseball’s revenue sharing program and central fund, before even selling a ticket, sponsorship or factoring in local TV and radio broadcast contracts.
Those figures combined were $79 million in 2008 and $75.4 million in 2009. That’s $47.9 million from revenue sharing and $31.3 million from the central fund in 2008; and $43.9 million in revenue sharing and $31.6 million from the central fund in 2009.
Revenue sharing is the system by which rich teams share revenues with lower revenue ones to even competition. The MLB central fund, which includes sources such as the national TV contract and to which all teams contribute – is distributed evenly. From other national sources, the Marlins got: $7.6 million in royalties and $2.9 million from the team’s investment in MLB Advanced Media – the sport’s Internet arm.
The documents show, the team had nearly $50 million in net operating income combined for 2008 and 2009. That was $37.84 million in 2008, when the team's on-field payroll was a league-low $24.8 million, and a more modest $11.1 million in 2009, when the payroll was up to $35.1 million.
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."
Jorge Costales, a Miami CPA who blogs about Marlins finances, has done a great job examining the documents compared to Forbes findings. Read his blog at 2thinkgood.com.
Another of Samson’s favorite sayings about payroll is that it will reflect revenues. When reminded of this during Monday’s conference call with reporters, Samson agreed but quickly added “local.” That’s a word that was conveniently absent from Samson’s previous discussions of team finances.
If you’re going to say payroll matches “local” revenues, he’s more accurate. Local revenue in 2009, the documents show, mainly consisted of $21.5 million in ticket sales revenue, $2.5 million from concessions and $16.7 million in local TV and radio broadcasts.
(As an aside, the documents reveal details of the team’s contract with Fox Sports Florida, which was a major part of its negotiations to build the new ballpark. The team needs regular revenue streams, such as TV money, to pledge against its portion of the construction. During 2005, the documents show, the Marlins and Fox Sports Florida struck a 15-year broadcast rights agreement – through 2020 – that pays the team $172 million during the life of the contract. It started with an initial payment of $40 million from Fox and comes out to $13.2 million this year, $13.6 million next year and $14 million in 2012.)
But this still begs the question-- what about all that “national” revenue.
Clearly the Marlins walked a fine line: if you make a profit, how much public money can you ask the public to chip in to your ballpark? If you say you’re saving the dollars for the ballpark – something Samson says the team has been saying all along, but hasn’t been – that’s a more palatable argument than the team isn’t profitable.
After years of saying the team wasn’t making a profit, Samson on Monday told reporters the documents “confirm everything we have said over the years of how we’ve operated the team.” He went on to talk about promising to secure baseball in South Florida and saving the dollars to put the team in a solid enough financial position to be able to fund its portion of the $515 million ballpark.
“We knew our contribution would have to be substantial enough, with team that did not have commensurate revenue,” Samson said. “In order to satisfy our contribution to the ballpark, we had to make sure we would be a team that would have the ability to borrow money.”
You have to wonder why Miami-Dade County officials didn’t push harder to see the Marlins’ books. And why a judge said opening the books wasn’t required, despite auto dealer Norman Braman’s lawsuit pushing for such, given that taxpayer dollars were being spent on the ballpark.
If the money really was going to the ballpark fund -- as a fan, you can still be angry the “profit” wasn’t going into payroll, but at least you’d know it was planned for somewhere other than the owner’s pocket.
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