Profitgate: Marlins Issue Official Statement Regarding Leaked Financials

[Bobbob1313]

But aren't they still -$61 mil?

[Party]

Everyone has debt though.

[Bobbob1313]

Sure, but with a stadium coming that they have to make payments on it, shouldn't they try to make up as much of that as possible prior to the stadium so less of the revenue from the stadium goes to debt payments?

I'd rather they spend shit at Sun Life and then raise payroll in the new ballpark.

[Party]

I will look for it in the BSA, but the yearly ballpark debt payments will not be more than $8 million.

[Bobbob1313]

Plus the accumulated debt from the last 10+ years going back to Montreal. Not just ballpark debt.

[Party]

We are already assuming that most of that debt was paid off between 2006 and today.

Loria bought the Expos for $50 million in 1999. He put more money into through cash calls and assumed majority control of the team. MLB bought the Expos for $120 million. He paid $158 million for the Marlins (~$35 million was a loan from MLB).

The Marlins are worth $317 million today.

Loria pays himself $10 million a year. (The Luria in Philly does this as well.)

Loria is doing pretty well for himself.
--------------------
BTW: http://www.2thinkgood.com/ Great blog on the Marlins finances.

[Swifty]

So Forbes was basically dead on because they didn't account for Loria's $10 mil self-salary (they were 9 mil off).

That's amazing.

[Party]

I think I misread something.

[Party]

BY FRED GRIMM

FGRIMM@MIAMIHERALD.COM

Imagine the consternation rippling through Miami-Dade County Hall when deadspin.com posted a top-secret cache of Major League Baseball financial statements this week.

It was like WikiLeaks handing it to the CIA.

This was criminal stuff, complained David Sampson, president of the Florida Marlins. If Sampson was angry, then County Mayor Carlos Alvarez, County Manager George Burgess and the various county commissioners who had punked taxpayers with the stadium deal must have been apoplectic.

Turns out that in 2008 and 2009, even as the supposedly impoverished Marlins were wheedling the county out of a half-billion bucks for a new baseball palace, the team recorded profits amounting to $49 million.

The leaked documents added six zeros to the perception that the county had been scammed by the team, which had refused to allow even a peek inside those covert finances.

THE VEGAS GAMBLE

So the poor Marlins get a gleaming $642 million baseball field and the stadium revenues. The county gets 30 years of debt and the prestige -- for whatever that's worth -- of a Miami team that had been flirting with Las Vegas and San Antonio. Maybe it was that pervasive threat employed by all major pro sports team -- pay up or we skip town -- that deluded the Miami-Dade officials into giving the Marlins one of the sweetest stadium deals ever. (A proposition that the mayor and commissioners refused to submit to voter approvals -- because voters would have sent the Marlins packing for Vegas.)

Suddenly deadspin.com has added a hard number -- $49 million -- to the criticism that the county had been duped, though that's an inadequate description of the negotiations. Make that willfully duped.

``Given that Forbes magazine has been saying all along that the Marlins are making money hand over fist, the figures in these new documents really shouldn't come as much surprise,'' noted Neil deMause, author of Field of Schemes: How the Great Stadium Swindle Turns Public Money Into Private Profit.

COULDA, SHOULDA KNOWN

``Anyway, whether the Marlins are making money now or not isn't really the point. The fact is that we've known all along that the team is going to be reaping all the revenues from the new stadium and so could have used that to pay a larger share of the stadium costs.

``And if the new stadium revenues aren't enough to pay for the construction costs,'' deMause asked, ``then why build a new stadium?''

It would have been difficult, during the stadium negotiations, to find an objective economist who believed that the Marlins were financially ailing (or that the economic benefits of a new stadium were worth the taxpayers' investment).

``If they [county officials] wanted to know, it was easy to get the information,'' said Dennis Coates, a professor of economics at the University of Maryland, Baltimore. ``Many economists -- not just me -- knew that it wasn't true that the clubs were losing money. And that they don't really need all the public subsidies.''

The proof was in the ever-escalating prices paid for baseball franchises.

``People aren't going to pay hundreds of millions of dollars for an asset that loses money,'' Coates said. ``The evidence was there if anyone wanted to see it.''

The mayor and his allies preferred willful ignorance. Until deadspin.com revealed the secret everyone secretly knew.

Read more: http://www.miamiherald.com/2010/08/2...#ixzz0xiB6oq1a

1) Good to know The Miami Herald is doing their proofreading. It's Samson, not Sampson, for the billionth time.

2) lol @ this being the sweetest stadium deal ever. There are cities paying their teams to stay. There are cities that are on the hook for $5-600 million in 2010 dollars. There are cities that paid for 100% of the costs for a fully loaded stadium.
--------------------

ALTERNATIVES SOUGHT
On Wednesday, Commissioner Rebeca Sosa -- one of nine to vote yes on the proposal -- called for the deal to be revisited.

``I firmly believe it is apparent that the Florida Marlins should have contributed more, and the public less, to keep baseball in South Florida,'' Sosa wrote in a memo to Alvarez.

``So that the financial burden to the county may be reduced, I hereby request you explore alternatives to the possibility of securing a greater financial contribution from the Marlins towards the stadium construction.''
Samson dismissed the request out of hand.

``I would say no,'' Samson said, when asked if the Marlins would consider putting more into the 37,000-seat, retractable-roof facility that is currently under construction on the grounds of the now-razed Orange Bowl.

`SIGNIFICANT BURDEN'

``I've spoken with Rebeca [Wednesday],'' Samson said. ``I think she understands a contract is a contract. She understands the significant burden that both the county and the team are taking on.''

Despite the growing indignation, Samson showed no signs of backing down. As he did earlier in the week, Samson argued that the high profits -- inflated by nearly $100 million in contributions over two years from Major League Baseball's revenue-sharing system -- were socked away or used to pay down debt instead of being spent on players.

When asked directly if he had lied about the team's financial situation in the past, when the Marlins claimed they were moving popular yet expensive stars because they didn't have the necessary revenues to keep them, Samson answered, ``Absolutely never. Not one time.''

http://www.miamiherald.com/2010/08/2...#ixzz0xiCuX7PL

She doesn't read Forbes!

[Swifty]

I still say the issue I have isn't that they made money, you'd be dumb to think otherwise, it's that there's no damn contrition, just defiance, in response to deadspin's leak.

[Todd]

It is a pretty sweet stadium deal. Correct me if I am wrong, Loria isnt paying any hard upfront money, his entire contribution is going to come through installments from revenue generated from the new parking garage.

[Party]

It is a pretty sweet stadium deal. Correct me if I am wrong, Loria isnt paying any hard upfront money, his entire contribution is going to come through installments from revenue generated from the new parking garage.

The Marlins had to pay $120 million upfront. The rest ($35 million) is through rent payments.

[Swifty]

Edit: Festa's more articulate.

[Party]

So Forbes was basically dead on because they didn't account for Loria's $10 mil self-salary (they were 9 mil off).

That's amazing.

I found it!

Chart! http://3.bp.blogspot.com/_1dx1tx1Bns...CPA+082010.bmp

http://www.2thinkgood.com/2010/08/fl...s-charged.html

[emkayseven]

what are the odds something like this is underhanded enough to really piss of the powers-that-be?

Florida Marlins president David Samson has perfected the art of doublespeak. Even after the mushroom cloud settled over the disclosure of financial statements that showed he and Marlins owner Jeffrey Loria are indeed duplicitous, Samson couldn’t help himself. Lies are simply part of how the Marlins do business.

The latest came during Samson’s weekly radio appearance on The Dan LeBatard Show in Miami, during which he addressed Deadspin’s publication of the Marlins’ balance sheet. What Samson said was so provably false that it was akin to a 3-year-old trying to hide his peas under a pile of mashed potatoes.

“Jeffrey Loria did not put a dollar in his pocket,” Samson said.

So programmed is that statement in Samson’s head, he keeps repeating it, like a robot with a shorted circuit. He’s right. Jeffrey Loria did not put a dollar in his pocket.

He put millions.

On Page 34 of the documents, under the heading Note Y, is a transaction called “Management Fee.” A corporation named Double Play Company is listed as the Marlins’ managing general partner. The partner is paid a yearly sum. For the two years the documents cover, the fees were $2.6 million and $2.8 million. In 2009, the documents say, the fee was raised to $3.2 million.

Records from the Florida Division of Corporations show Double Play’s CEO is Jeffrey Loria. Its president is David Samson.

Of the six teams whose documents were leaked, only the Marlins have a management fee listed in their operating expenses.

Earlier in the balance sheet, under Note L, is a one-paragraph section called “Related Party Promissory Note.” It explains that the managing general partner made a number of loans to the team at 1.5 percent to 1.75 percent above the London Interbank Offered Rate – a particularly high interest rate for the current lending climate, according to two accountants who reviewed the Marlins’ financials. Over the past two years, the loans have paid Double Play $1.83 million and $1.19 million, respectively.

While the financial records of Double Play are unavailable because it is a private company, at least $8.42 million went to the managing general partner in the past two years. Though the documents do not show that Loria has taken a direct distribution of money as owner, it is undeniable that he plundered the team’s coffers as it received nearly $500 million in public funding for a new stadium and more than $75 million in revenue sharing from MLB.

Samson did not reply to a request for comment.

The ugliness of the ballpark debt was apparent long before the documents surfaced. To help fund the $634 million stadium complex, Miami-Dade County commissioners voted to secure more than $400 million in loans, most of which are loaded with balloon payments. The worst is a $91 million loan that will take $1.2 billion to pay off. By 2049, the county will have spent $2.4 billion to cover its portion of the stadium.

The anti-Marlins groundswell in South Florida continued Thursday when Miami mayor Tomas Regalado asked the city attorney to look into renegotiating a $100 million parking-facility contract for the stadium complex. Political backlash was a given after the Marlins’ refusal to release their financial records during the push for the new stadium.

For years, the Marlins cried poverty. Loria threatened to move the team from Florida. Despite several sources claiming the Marlins raked in money — Forbes’ annual valuations for the Marlins have proven extremely close to reality, and Miami-area accountant Jorge Costales has written incisively about Marlins finances — the county commissioners voted in December 2007 to pay for more than three-quarters of the stadium due open in 2012.

Samson claimed on LeBatard’s show that the tax dollars will come from tourism money devoted to sports and convention complexes. That is only half-true. To free the tourism-tax dollars, the county shifted general-use monies from property taxes to pay other debt. Take from one hand, give to the other and buy an owner worth hundreds of millions of dollars a new toy from which he reaps damn near every cent, all with the money of hardworking citizens.

This was avoidable, of course, had the county commissioners refused to approve a deal until they saw the Marlins’ financial statements. The management fee was an obvious red flag. How could Loria and Samson say they didn’t have enough money for a stadium when they were paying themselves? The loan was another red flag. Such revelations almost certainly would have given the commissioners pause about offering the breadth of public financing they did.

Loria refused transparency. He is an excellent businessman, and he knew the repercussions. In the end, the Marlins hoodwinked local politicians so caught up in the excitement of keeping the team in Miami, they forgot with whom they were dealing. When hundreds of millions of dollars are involved in anything, people are going to lie, and Loria and Samson made statement after misleading statement and got away with it.

“I never go back to regret what I do because I make decisions based on the information provided to me, my conscience and what is best for those I represent,” said Rebeca Sosa, one of the nine county commissioners who voted for the stadium funding against four opponents — including Regalado, now the mayor. “The situation and information I have today in my hand is different than the one I had before.

“I still support the Marlins stadium.”

How Sosa, or any commissioner who voted yes, could stand by a potential $2.4 billion of debt with a clear conscience is difficult to fathom. The Marlins are up to their old tricks, still pussyfooting their way around the facts. All those years the team had the lowest payroll in baseball, Samson claimed money went to hidden costs in running a ballclub. One of them, he told Sun-Sentinel columnist Dave Hyde, was marketing.

“Eight figures,” Samson said. He told The Miami Herald it was among the most in baseball.

In 2008, the Marlins spent $9.8 million on marketing, according to their balance sheet. The Tampa Bay Rays spent $23 million, the Pittsburgh Pirates $17.1 million, the Texas Rangers $16 million and the Los Angeles Angels $10 million. The only team to budget less among the six whose financials were leaked was the Seattle Mariners, whom the Marlins outspent by $11,000.

This isn’t a white lie here, a fib there. It is systemic. Marlins mislead, public follows. The balance sheet was a gift to Miami-Dade County taxpayers who deserve – and have deserved since the “yes” vote – to know how the team they were endowing is run.

The poor, poor Marlins had an operating profit of $48.9 million in 2008 and 2009, including $11.1 million last year, when they increased payroll and started paying off their stadium debt. Loria has already doubled his money on the Marlins – he bought the team for $158.5 million, including a $38.5 million interest-free loan, and it’s now worth $317 million, according to Forbes’ valuations – and the revenue streams from the new stadium should only increase that figure. A county hemorrhaging jobs funneled tax money to fund a stadium for a team with a reckless disregard for its community’s welfare.

The politicians can pursue recourse, and the fans can bellow, and it doesn’t change the reality that a $91 million loan to the county will take 39 years and $1.2 billion to pay off, and that Jeffrey Loria still owns the Florida Marlins with David Samson as his president, and that the retractable-roof stadium, the one that’s 40 percent done, was built on lies that never seem to end.

http://sports.yahoo.com/mlb/news?slu...nancials082810