Posted April 21, 200421 yr According to today's Herald, Forbes Magazine calculated the Marlins' losses at around $11 million last season, which is much smaller than the reported $17 million+ loss Loria says we took.
April 21, 200421 yr Might as well argue about the depth of black holes. Until MLB opens up their books no one will ever really know.
April 21, 200421 yr Might as well argue about the depth of black holes. Until MLB opens up their books no one will ever really know. True. Its also relatively easy for large corporations to hide profits by using interest and other write-offs. I'm not sure what physical assets Loria could use because he doesnt own the stadium or surrounding property, but its possible for him to use assets not related to the Florida Marlins franchise isn't it?
April 21, 200421 yr Ayup... Problem is not just that they don't disclose the numbers, but they don't disclose the methodology, either. Loria could be writing off 10K a shot for every baby bottle he buys Samson for all we know.
April 21, 200421 yr hmm, i guess the IRS can't open the Marlins or MLB books. There are 3 choices here: 1) Loria cooking the books ilegaly 2) Loria using the legal accounting practices and showing a paper loss of 20 millions (Cash flow is a totaly different matter) 3) Loria truely loosing 20 Millions/per year I take 2. Some of you sounds like he can burry huge amounts of money somewhere without no one noticing. An Accounting system for a team like the Marlins is very simple. Revenue = tickets + media + merchandising Expenses = Lease + Travel Expenses + Employees + Advertisingl, etc. Not much room to manouver if you ask me.
April 21, 200421 yr I'm not a CPA, but there is alot of room to fidget with the #'s. How much debt service is he writing off to MLB, are the expenses he is incurring to secure a new stadium above or below the line, etc., the list could go on forever. There are a thousand ways he can move his numbers around, and it's made even worse by the fact that no one can take a little look see either way.
April 21, 200421 yr I'm not a CPA, but there is alot of room to fidget with the #'s. How much debt service is he writing off to MLB, are the expenses he is incurring to secure a new stadium above or below the line, etc., the list could go on forever. There are a thousand ways he can move his numbers around, and it's made even worse by the fact that no one can take a little look see either way. there is room and you can play with the numbers, just like you can do it personaly on your tax forms. If you get audited that's a different matter. We will never know unless they did or do something wrong and get caught.
April 21, 200421 yr Someone correct me of I'm wrong but I believe the thing that separates baseball from other enterprises is that you can "depreciate" the ballplayer's contracts. If anythng his cashflow will be worse than his income statement would show. Also he wouldn't "cook the books" with lawsuits from the minority owners, his loans from MLB, etc., or risk losing everything. There are basically two legal ways to keep books - cash accounting or the accrual method. I don't know which they are using. From what I've seen they accrue for tax purposes. You might show a $20 million loss on one and a $17 million loss on the other. Both are acceptable business practice. What they have to do is do it the way the league dictates, that could be the reason for the difference Forbes came up with. Let me give you an example. Joe Ballplayer has a three year salary deal. He makes $1 million a year but got a signing bonus of $3 million to be paid at some point during the life of the contract. Cash basis in 2003 he was paid $1 million, so you only show the $1 million. Accrual basis might say he was paid his salary ($1 million) plus 1/3 (useful life of the contract being 3 yrs) of his bonus, or another $1 million, thereby setting his cost for 2003 at $2 million. Either way is legal. You just have to be consistent. The IRS doesn't allow you to switch back and forth with impunity. Forbes could have done it one way and the Fish/MLB done it the other and both numbers would be correct.
April 21, 200421 yr Hmmmmm :mischief2 I wonder what the tax reporting procedure is for an MLB francise, especially considering their anti-trust status......
April 21, 200421 yr Someone correct me of I'm wrong but I believe the thing that separates baseball from other enterprises is that you can "depreciate" the ballplayer's contracts. If anythng his cashflow will be worse than his income statement would show. Also he wouldn't "cook the books" with lawsuits from the minority owners, his loans from MLB, etc., or risk losing everything. There are basically two legal ways to keep books - cash accounting or the accrual method. I don't know which they are using. From what I've seen they accrue for tax purposes. You might show a $20 million loss on one and a $17 million loss on the other. Both are acceptable business practice. What they have to do is do it the way the league dictates, that could be the reason for the difference Forbes came up with. Let me give you an example. Joe Ballplayer has a three year salary deal. He makes $1 million a year but got a signing bonus of $3 million to be paid at some point during the life of the contract. Cash basis in 2003 he was paid $1 million, so you only show the $1 million. Accrual basis might say he was paid his salary ($1 million) plus 1/3 (useful life of the contract being 3 yrs) of his bonus, or another $1 million, thereby setting his cost for 2003 at $2 million. Either way is legal. You just have to be consistent. The IRS doesn't allow you to switch back and forth with impunity. Forbes could have done it one way and the Fish/MLB done it the other and both numbers would be correct. Thank you 2003. you are right on the money. btw, I think 95%+ of US corportations use the accrual method.
April 21, 200421 yr This is the kind of stuff that the Herald loves to overlook. Why tell the whole truth when you can tilt a story the way you want.
April 21, 200421 yr the marlins are not a public company and neither is MLB. therefore they dont have to open the books legally. It has nothing to do with the IRS. I'm no lawyer...but I dont think you can simply request to see the tax returns of a private company if you wish.
April 22, 200421 yr the marlins are not a public company and neither is MLB. therefore they dont have to open the books legally. It has nothing to do with the IRS. I'm no lawyer...but I dont think you can simply request to see the tax returns of a private company if you wish. I agree. If the public wants to see the books, then pay for that right.
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