Tweet
As Jeter's "Project Wolverine" is more of an overall plan for the next few years rather than specifically this offseason, I decided to move my posts on the subject to their own thread.
Barry Jackson obtained copies from two sources, and is writing a 5 part series on Jeter's plan. The first two have been published already:
http://www.miamiherald.com/sports/sp...192646499.html
I just have no idea why they think fans will suddenly start flocking to the park....especially when they traded away the most noteworthy players, and will be terrible the next few years. What is leading them to believe that's going to happen?
The only believable part of this whole thing is the corporate sponsorship revenue - that I believe because they can sell the naming rights to the stadium, which will be increased revenue.
- - - - - - - - - -
Here is Part 2, discussing Payroll:
http://www.miamiherald.com/sports/sp...192803579.html
Barry Jackson obtained copies from two sources, and is writing a 5 part series on Jeter's plan. The first two have been published already:
http://www.miamiherald.com/sports/sp...192646499.html
Marlins CEO Derek Jeter, who has slashed about $36 million in player payroll in recent weeks, in August circulated a document to potential investors that projects the Marlins will make an enormous profit in 2018 and sizable profits the following three years.
Project Wolverine, Jeter’s confidential document given to potential investors and shared with The Miami Herald by two of those approached investors, includes ambitious revenue goals for tickets, sponsorship and television rights.
The new ownership group is poised to make a profit next season because of the slashing of payroll, combined with the fact that every MLB team next spring will receive a one-time payout of $50 million as a result of MLB’s sale of digital media company BAMTech to Disney. But the amount of the Marlins’ profit could vary widely based on several factors.
The August version of the document — named Project Wolverine because Jeter grew up primarily in Michigan, nicknamed The Wolverine State — projects a Marlins “cash flow” profit of $68 million for 2018.
But much of that was based on the internal projection that Fox will give the Marlins a $44.8 million up-front payment as part of a renegotiated TV deal. There’s no indication if the Marlins at this point believe that will happen.
If Fox does not give the Marlins a lucrative extension and that large projected up-front payment, the Marlins’ projected profit for 2018 would drop to $23 million and potentially lower if ambitious revenue targets aren’t met.
The Marlins’ TV contract, which pays the lowest in baseball, runs through 2020.
Those profit projections in the August version of Project Wolverine are based on a player payroll of about $90 million for 2018, or $100 million including pension payments. The Marlins’ current payroll projects to $104 million before pension payments, and the team is reportedly looking to shed additional salary.
That August version of Project Wolverine projects Marlins profits of $10 million in 2019, $15.8 million in 2020, and $22 million in 2021.
The document was crafted by the Jeter camp and two versions of it were shared with the Herald, one from August and another from a couple of months before.
There have been subsequent versions of Wolverine circulated with amended figures, but the Marlins declined to share those numbers or comment otherwise for this series of Herald stories that will be posted in the coming days.
The August Project Wolverine version shared with The Herald — circulated during the month that Jeffrey Loria agreed to sell the team to Jeter and businessman Bruce Sherman — offers insight into the ownership group’s financial model.
Here are Project Wolverine’s August projections in three key categories:
▪ The document projects a big spike in attendance revenue in 2018, which would seem difficult to achieve in the wake of trades involving Giancarlo Stanton, Marcell Ozuna and Dee Gordon.
The Marlins generated about $30 million in ticket revenue last season, but Wolverine projects increases to $37.5 million in 2018 and $40.6 million and $45.8 million the following two seasons.
According to a source, even though the National League announced the Marlins’ attendance at 1.6 million last season, only 820,000 were paid tickets.
Wolverine projects the paid figures to rise to 1.1 million, 1.2 million, 1.35 million, 1.5 million and 1.65 million over the next five seasons.
The spring version of the document, since altered, projected a jump in overall attendance (paid and unpaid) to 24,235 in 2018 and 27,284 in 2019, a substantial jump from 20,395 in 2017.
▪ Project Wolverine projects the team’s corporate sponsorship revenue will rise from $19.1 million in 2017 to $24 million in 2018, with increases to $32 million, $37.8 million and $41.6 million the following three years.
The initial jump could happen easily if the team secures a corporate naming rights sponsor willing to pay at least $5 million annually to place its name on Marlins Park. The projected increases in 2019 and beyond seem to be more ambitious.
▪ The Marlins’ long-term TV deal with Fox Sports Florida, negotiated by the previous ownership group, expires after 2020 and will pay the team $17 million, $18 million and $20 million over the next three seasons — the lowest in baseball.
In Project Wolverine, Jeter projects annual local broadcast revenue (almost all from TV) to be $51.6 million in 2021 and $53.6 million in 2022.
But one Northeast businessman approached by Jeter said a rise to the $40 million to $45 million range might be more realistic than $50 million-plus.
In order to drive up the price of TV rights significantly, the Marlins might need to find a bidder to challenge Fox Sports Florida, which is among nearly two dozen regional sports cable networks being purchased by ESPN. Comcast has never shown serious interest in challenging Fox for Marlins rights, and Jeter — according to associates — has displayed no inclination to start a TV network, which would be a pricey and risky proposition.
The Marlins must hope that a non-traditional potential competitor for TV rights will challenge Fox (or eventually ESPN) — perhaps Yahoo or Google or Facebook.
That might be needed to keep Fox from essentially bidding against itself and to give the Marlins the money they need to afford a much higher payroll. The low TV contract is among the single biggest factors why the Marlins’ past ownership and current one cannot afford a larger payroll.
Project Wolverine, Jeter’s confidential document given to potential investors and shared with The Miami Herald by two of those approached investors, includes ambitious revenue goals for tickets, sponsorship and television rights.
The new ownership group is poised to make a profit next season because of the slashing of payroll, combined with the fact that every MLB team next spring will receive a one-time payout of $50 million as a result of MLB’s sale of digital media company BAMTech to Disney. But the amount of the Marlins’ profit could vary widely based on several factors.
The August version of the document — named Project Wolverine because Jeter grew up primarily in Michigan, nicknamed The Wolverine State — projects a Marlins “cash flow” profit of $68 million for 2018.
But much of that was based on the internal projection that Fox will give the Marlins a $44.8 million up-front payment as part of a renegotiated TV deal. There’s no indication if the Marlins at this point believe that will happen.
If Fox does not give the Marlins a lucrative extension and that large projected up-front payment, the Marlins’ projected profit for 2018 would drop to $23 million and potentially lower if ambitious revenue targets aren’t met.
The Marlins’ TV contract, which pays the lowest in baseball, runs through 2020.
Those profit projections in the August version of Project Wolverine are based on a player payroll of about $90 million for 2018, or $100 million including pension payments. The Marlins’ current payroll projects to $104 million before pension payments, and the team is reportedly looking to shed additional salary.
That August version of Project Wolverine projects Marlins profits of $10 million in 2019, $15.8 million in 2020, and $22 million in 2021.
The document was crafted by the Jeter camp and two versions of it were shared with the Herald, one from August and another from a couple of months before.
There have been subsequent versions of Wolverine circulated with amended figures, but the Marlins declined to share those numbers or comment otherwise for this series of Herald stories that will be posted in the coming days.
The August Project Wolverine version shared with The Herald — circulated during the month that Jeffrey Loria agreed to sell the team to Jeter and businessman Bruce Sherman — offers insight into the ownership group’s financial model.
Here are Project Wolverine’s August projections in three key categories:
▪ The document projects a big spike in attendance revenue in 2018, which would seem difficult to achieve in the wake of trades involving Giancarlo Stanton, Marcell Ozuna and Dee Gordon.
The Marlins generated about $30 million in ticket revenue last season, but Wolverine projects increases to $37.5 million in 2018 and $40.6 million and $45.8 million the following two seasons.
According to a source, even though the National League announced the Marlins’ attendance at 1.6 million last season, only 820,000 were paid tickets.
Wolverine projects the paid figures to rise to 1.1 million, 1.2 million, 1.35 million, 1.5 million and 1.65 million over the next five seasons.
The spring version of the document, since altered, projected a jump in overall attendance (paid and unpaid) to 24,235 in 2018 and 27,284 in 2019, a substantial jump from 20,395 in 2017.
▪ Project Wolverine projects the team’s corporate sponsorship revenue will rise from $19.1 million in 2017 to $24 million in 2018, with increases to $32 million, $37.8 million and $41.6 million the following three years.
The initial jump could happen easily if the team secures a corporate naming rights sponsor willing to pay at least $5 million annually to place its name on Marlins Park. The projected increases in 2019 and beyond seem to be more ambitious.
▪ The Marlins’ long-term TV deal with Fox Sports Florida, negotiated by the previous ownership group, expires after 2020 and will pay the team $17 million, $18 million and $20 million over the next three seasons — the lowest in baseball.
In Project Wolverine, Jeter projects annual local broadcast revenue (almost all from TV) to be $51.6 million in 2021 and $53.6 million in 2022.
But one Northeast businessman approached by Jeter said a rise to the $40 million to $45 million range might be more realistic than $50 million-plus.
In order to drive up the price of TV rights significantly, the Marlins might need to find a bidder to challenge Fox Sports Florida, which is among nearly two dozen regional sports cable networks being purchased by ESPN. Comcast has never shown serious interest in challenging Fox for Marlins rights, and Jeter — according to associates — has displayed no inclination to start a TV network, which would be a pricey and risky proposition.
The Marlins must hope that a non-traditional potential competitor for TV rights will challenge Fox (or eventually ESPN) — perhaps Yahoo or Google or Facebook.
That might be needed to keep Fox from essentially bidding against itself and to give the Marlins the money they need to afford a much higher payroll. The low TV contract is among the single biggest factors why the Marlins’ past ownership and current one cannot afford a larger payroll.
The only believable part of this whole thing is the corporate sponsorship revenue - that I believe because they can sell the naming rights to the stadium, which will be increased revenue.
- - - - - - - - - -
Here is Part 2, discussing Payroll:
http://www.miamiherald.com/sports/sp...192803579.html
According to numbers in an August copy of Project Wolverine, the team’s projected 2018 payroll will be $100 million, but the projected payroll for this coming season is actually $90 million or a bit above without those pension benefits and other costs.
Subtracting $10 million in those payments from future listed payrolls in the August copy of Wolverine, the Marlins project payrolls of $81 million in 2019, $84.8 million in 2020, $116 million in 2021 and $118.7 million in 2022.
Subtracting $10 million in those payments from future listed payrolls in the August copy of Wolverine, the Marlins project payrolls of $81 million in 2019, $84.8 million in 2020, $116 million in 2021 and $118.7 million in 2022.
Comment