I'm doing a persuasive speech on why the Marlins need a new stadium tomorrow.

 

Does anyone have details of the Marlins' deal with Wayne/Dolphins Stadium as far as the percentages of parking, concessions, etc. that Wayne gets?

 

Thanks.

Just from my memory, Wayne gets 70% of all game day parking purchased (50% of prepaid parking) 40% of concession sales and I believe 100% of all sky box sales (since the boxes are sold by the stadium and he owns the stadium).

 

Also, the Marlins pay rent, but Huizenga pays stadium employees' salaries, as well as stadium operating costs.

 

Finally, we're prohibited from using certain "blue chip" sponsors as they are designated as Dolphins sponsors and Wayne doesn't want competition for the advertising dollar. Hence the locate and win presented by the "official directory of the Florida Marlins" (note: they never say Bellsouth Yellowpages).

 

All said, it's a bad lease, but it could be overcome if the paid attendance was higher. Had we been in the teens in attendance these past couple years instead of the low 20's, I doubt you'd hear as much grumbling about the lease.

Just from my memory, Wayne gets 70% of all game day parking purchased (50% of prepaid parking) 40% of concession sales and I believe 100% of all sky box sales (since the boxes are sold by the stadium and he owns the stadium).

 

Also, the Marlins pay rent, but Huizenga pays stadium employees' salaries, as well as stadium operating costs.

 

Finally, we're prohibited from using certain "blue chip" sponsors as they are designated as Dolphins sponsors and Wayne doesn't want competition for the advertising dollar. Hence the locate and win presented by the "official directory of the Florida Marlins" (note: they never say Bellsouth Yellowpages).

 

All said, it's a bad lease, but it could be overcome if the paid attendance was higher. Had we been in the teens in attendance these past couple years instead of the low 20's, I doubt you'd hear as much grumbling about the lease.

 

 

Thanks for the info.

A couple of things:

 

search google (or yahoo if you prefer) on the following phrase:

 

"john henry lease marlins stadium concessions parking huizenga rent"

 

look at old stuff (marlins accepted Henry's lease) like mike phillips '98, etc. and the funding of the stadium by joe robbie, susequent sale to huizenga, etc.

 

also "marlins zimbalist", a sports economist

 

--------

 

I believe Huizenga Properties gets 62% of the gross parking revenues off the top. Then costs of parking (printing vouchers, personnel, police, etc.) are paid, and the Marlins then get what's left.

 

Not only are the Marlins prohibited from selling advertising to big-name companies (that's why you see a small company (comparatively to say BofA, SunTrust etc.) like Bank Atlantic at Marlins games they are also prohibited from selling them tickets, or entering into co-marketing deals. So in effect they have no corprorate ticket sales (the real problem and the thing that drives Huizenga to see the Marlins leave town).

 

Money from the skyboxes and club seats go to pay off debt on the stadium (actually on the land). Back when Dombrowski was Pres ad GM he was quoted as saying the Marlins rceived about $2 million from concessions where other teams regularly got $25-30 million (trying to remember) annually.

 

The Marlins rent the stadium and on top of rent pay a maintenance fee of many million a year. They also only "rent" a small portion of the seats. If they need to open more (opening day for example) they have to pay additional rent on those sections.

 

In 2003, the Marlins made barely $6 million off the playoffs/world series, vs the usual $20+ million for other teams.

 

There's a bunch of stuff out there that will help you out.

Here's Zimbalist's story on the '97 Marlins.

 

http://www.ssc.uwo.ca/economics/faculty/jp...82/marlins.html

 

A Miami Fish Story Far from losing $30 million in '97, the Marlins made a hefty profit. So why did their owner destroy the team? By ANDREW ZIMBALIST

 

How could a baseball team in a major media market win the World Series and lose $34 million? The owner of the Florida Marlins, H. Wayne Huizenga, claims that's just what his team did last year. He hoped that his proclamation of penury would shame Broward and Miami-Dade Counties into building him a new, retractable-roof ball park. When it didn't, he went ballistic. Putatively to stop the team's financial bleeding, he conducted the most radical fire sale of players in baseball history, lowering the Marlins' payroll from $53 million in 1997 to $13 million in mid-July 1998 and leaving many baseball fans wondering exactly what Bud Selig was doing in the commissioner's office. At the same time, Huizenga tried to arrange a sale of the Marlins to his longstanding associate and team president, Don Smiley, for $169 million.

 

As the Marlins stumbled through this season, losing 108 games, Huizenga refused to provide any details about the team's 1997 finances. However, Smiley issued a confidential report on the team to prospective partners in his effort to complete the purchase. Smiley's "Private Placement Memorandum" reports a variety of financial information for 1997 as well as projections for 1998 and beyond. Based on these projections, payroll figures from Major League Baseball and my own calculation of ticket sales (actual attendance multiplied by the average ticket price), the picture for 1997 looks like this:

 

Revenues (in millions)

Ticket sales: $23.9

Broadcasting: $23.2

Concessions: $1.8

Other: $10.0

Total: $58.9

 

Costs (in millions)

Payroll: $53.5

Team Operations: $18.9

Player Development: $5.1

Scouting: $5.1

Latin American Operations: $0.6

Stadium Expenses: $5.0

Total: $88.2

 

 

These numbers suggest an operating loss of $29.3 million. Quibbling over a few million dollars aside, what's the problem? Did Huizenga's Marlins really lose around $30 million? Of course not. Huizenga is employing an accounting trick as familiar to sports franchise owners as Mark McGwire's home runs are to viewers of ESPN's SportsCenter.

 

Huizenga owns Pro Player Stadium and the team's cablecaster, Sportschannel Florida. Pro Player was built in 1987 and is amply stocked with all the revenue-generating accouterments of a modern sports facility. Yet there is no mention in the team's reported revenues of income from luxury boxes, even though Pro Player Stadium has 195 suites that rent for between $55,000 and $150,000 a year. Nor is there mention of income from club seats, although the stadium has 10,209 club seats selling for between $900 and $3,500 a year.

 

Andrew Zimbalist is a professor of economics at Smith College and the author of numerous articles and books about the sports industry.

 

 

 

 

Bob Kramm, president of the stadium corporation, estimates that in 1997 an average of 65 luxury suites and 5,000 club seats per game were sold. Assuming that the average suite rented for $100,000 and the average club seat sold for $2,000, the gross revenue from these two sources would be $16.5 million. Huizenga attributes none of this revenue to the Marlins and all of it to his separate business entity, Pro Player Stadium.

 

Similarly, Huizenga sells naming rights to the stadium, worth by conservative estimates about $2 million a year. Since the stadium is shared with the N.F.L. Dolphins (also owned by Huizenga), let us attribute half of this value to the Marlins. Parking for approximately 788,000 cars during the baseball season at $5 a car in 1997 brought an estimated $3.9 million. Sales of signs and advertising at the park and in the team program produced an estimated $6 million. (The Cleveland Indians' signage and ad sales at Jacobs Field yielded $8.8 million in 1997 on an average attendance of about 44,000.) Sales of merchandise brought in something like $3 million in net income. (The Indians' figure was $4.5 million.) All told, that's $13.9 million in ball-park revenue attributed to the stadium company, not the Marlins.

 

Further, the revenue from concessions appears to be substantially understated. Fans spend an average of $10 on concessions, with about 40 percent of that going to the team. With total 1997 attendance of 2.4 million, the Marlins' net concessions income should have been around $9.4 million. Yet the team is credited with only $1.8 million, a discrepancy of $7.6 million. In all, $38 million in revenues are credited to the stadium rather than the Marlins ($16.5 million from luxury and club seating, $7.6 million from concessions, $6 million from signage, $3.9 million from parking, $3 million from merchandise and $1 million from naming rights).

 

Even though the Marlins receive only a small portion of stadium revenue, they still are charged $5 million to cover "stadium expenses." These expenses presumably are used to pay off Huizenga's debt service on the county industrial bonds that he assumed when he purchased the park. The yearly service on this debt has been estimated at around $5 million, but since the stadium is also the home facility of the Dolphins and the site of special events throughout the year, the Marlins share of this debt should be no more than half.

 

Huizenga plays the same game with Sportschannel. According to Smiley's prospectus, an independent appraiser estimated that the Marlins' contract with the cable station is undervalued by more than $2.1 million a year. Herein lies a powerful reason why Huizenga wanted to sell his team to Don Smiley. Huizenga's deal with Smiley included an extension of the Sportschannel contract through 2024. Under that contract, the Marlins were to receive rights fees well below market value. While that didn't help the Marlins, it increased the station's value from an estimated $85 million to $125 million.

 

Unfortunately for Huizenga, the deal fell through when Smiley's fund-raising efforts came up $50 million short. So in August Huizenga began to talk to John Henry, a Boca Raton commodities trader and minority owner of the New York Yankees. They reportedly have reached a deal for $150 million plus other considerations worth, by my calculations, about $50 million. But all is not lost. Apparently, Henry acceded to a 10-year extension of the Sportschannel contract.

 

Adding the $2.1 million in lost cable revenues to the $38 million in lost stadium revenues brings the total earned by -- but not credited to -- the Marlins in 1997 to $40.1 million. But that's not the end of it. Smiley's prospectus suggests "other" revenues of $10 million. No details are provided. In 1997 the Marlins beat the Indians in the seventh game of the World Series. The Indians reported net postseason ticket revenues of $6.8 million. Presumably this is part of the "other" $10 million for the Marlins.

 

Then there is roughly $2 million that comes from Major League Baseball Properties as licensing and sponsorship income. This leaves only $1.2 million for all "other" sources of revenue: roughly 15 preseason games at the Marlins' publicly financed spring training ball park; special functions; net income from the team store in Fort Lauderdale (since closed) and so on. Finally, in the "Private Placement Memorandum" Smiley reports that he intends to lower general and administrative expenses by $3 million a year, suggesting there is that much padding in the current budget.

 

In short, if the Marlins financial statement is adjusted for related-party transactions and bloated costs, what appears to be a $29.3 million operating loss in 1997 becomes instead an operating profit of $13.8 million (adding $40.1 million in additional revenues and $3 million of bloated costs). Why else would Don Smiley, who as team president knows its financial predicament as well as anyone, have wanted to buy the team?

 

Why does Huizenga want to sell a profitable team? Perhaps the same reason he sold Blockbuster to Viacom: he can get a good price for it with a nice capital gain and he can control the terms of the deal to benefit his other holdings, including Sportschannel and the Pro Player Stadium corporation. Further, Huizenga has owned the Marlins since 1993 and by now has used up his player amortization allowance (a tax benefit that allows an owner to set aside up to 50 percent of franchise value and then depreciate this sum, usually over five years). Thus, the substantial tax-shelter value of the club is exhausted.

 

Meanwhile, the team finished the 1998 season with a payroll of $13 million. Seven million of this was from the insured contract of pitcher Alex Fernandez, who was on the disabled list all season. As such, the insurance company was responsible for at least 70 percent of the $7 million, so the actual payroll disbursements for the 1998 Marlins were probably below $10 million.

 

With average attendance at Pro Player down from 29,555 in 1997 to 22,157 in 1998, ticket revenue fell by around $6 million. Auxiliary stadium income also took a proportional hit, but the player payroll was down by more than $40 million -- more than offsetting lower stadium income. Thus, Huizenga's Marlins were even more profitable losing in 1998 than they were winning in 1997.

Wayne is such an ass

Wayne is such an ass

 

 

Meh, Loria's probably doing the same exact thing regarding the 2005 and 2006 Marlins.

When you go back and read the history it reminds you exactly what the cause of this mess is.

 

Wayne.

...and MLB/Selig allowed it all to happen.

DO IT FOR THE CITY OF MIAMI WAYNE!!!

Reading this makes me hate Wayne so much more.

Reading this makes me hate Wayne so much more.

 

 

Why? Loria is doing the exact same thing.

 

If you honestly believe Loria lost upwards of $20 million in 2005, I've got ocean-front property in Montana to sell you.

Here's an excerpt from an article that I find extremely interesting:

 

Battered Fish

by John Brattain

November 25, 2005

 

You can also add this to the litany of lies Marlins fans have been forced to endure: the Marlins claim to have lost $20 million. Here?s a little tidbit you might want to know: the Marlins were purchased by Loria for about $150 million. Over the first five years of ownership a club can amortize 50% of that. In other words, the Marlins can make a book entry in the loss column in years 1-5 of ownership for $15 million. Loria and Samson?s salary is also included as an expense?hence in the ?loss? column. The Marlins received about $27 from revenue sharing this year and almost $20 million from ESPN and FOX, and they receive at a minimum $3 million from MLB licensing revenues and had a payroll of about $60 million. So they have $50 million from those three sources. Toss in local television and radio, Internet revenues (remember Wall Street firms offered $3 billion for MLB.com or $100 million per team) and road receipts and?well, you get the idea. They get all of this before they sell a single ticket or hot dog.

 

Besides, Loria is most likely in a 33% tax bracket, which means his $20 million ?loss? translates into $6.6 million he can write off against his income from other sources. In other words he can make over $6 million in profits from his art business before he has to worry about paying tax on it.

 

By the way, Forbes listed the value of the Marlins franchise at $206 million for 2005, so Loria is looking, at this moment, at about a $50 million gain in the value of his investment.

 

Still believe he lost his shirt this year?

 

That?s a lot of bad faith, a lot of abusing a fan base. Do you think this will all disappear if South Florida coughs up a few hundred million dollars in extorted corporate welfare to house the team?

 

If they do, the value of the franchise jumps considerably and Loria gets the lion?s share of revenues from the new park. In short, this isn?t about the viability of the franchise; this is about padding profits (yes, profits) and making Loria a lot more wealthy without him having to actually work for it.

 

Loria has two choices: One, rebuild the fan base remembering that the damage has been done over the course of years and it?s going to take an investment of money and time (read: years) to reverse it. Or as option two, he can throw a temper tantrum, blame the consumer and try to find a region that?s willing to make him a lot more wealthy.

 

Guess which choice he has made? He?s told South Florida to go to hell and is whoring himself out to any region willing to whip out the public teat and allow him to nurse until he?s gorged.

 

He?s said this is his intention repeatedly since 2004.

 

And he wonders why folks still stay away? He?s shown no loyalty to South Florida. He expects fans to come out regardless of the quality of the team and expects local politicians to place a higher priority on fattening his wallet than providing hurricane relief. And if all that happens, then he?ll pledge fealty to the region.

 

His approach is about as subtle as a double-fisted schoolyard salute.

 

 

Link

This guy certainly isn't an accountant and clearly has a chip on his shoulder. Not only is his math wrong, but the personal attacks our owners, which I think even the most sceptical among would agree, whether it's been reaching in his pocket to finance in this team from 2002-2005 (a fact the writer ignores) or just watching Loria being totally emotionally involved in every play on the field, he's the best owner we've ever had.

 

The writer ignores that the lease the Marlins operate under strips away revenue sources alost every other team takes for granted. And this idea that somehow these losses are good for Loria is so ridiculous they almost don't deserve a response. He ignores operating losses that virtually everyone covering the team admits exist. In his mind there is only one side of the balance sheet.

 

Let me put it this way. You give me $100 and I give you back $30. Good deal for you? I don't think so.

 

The only way Loria profits is by selling the team at a profit, but if he does, since the writer thinks he's already pocketed the tangible and intangible losses, which is his premise, then his basis would be so high the capital gains taxes would probably wipe out any gain he generated. And Loria has made it clear he isn't selling.

 

As I like to say, if you start with a false premise it's easy to prove any point.

 

Here's his view of Loria...

 

"And he wonders why folks still stay away? He?s shown no loyalty to South Florida. He expects fans to come out regardless of the quality of the team and expects local politicians to place a higher priority on fattening his wallet than providing hurricane relief. And if all that happens, then he?ll pledge fealty to the region."

 

Not the rain, not the sun, not the lousy seats or fan unfriendly environment prevalent at PPS or hurricanes. None of those matter. According to this guy Loria is a "whore" who has told "South Florida to go to hell since 2004".

 

2004?

 

This all horseshit plain and simple.

 

You may not like Loria for whatever reason, real or imagined, but it shouldn't have anything to do with this piece.

While the numbers may be a little fuzzy, the fact of the matter remains that a team that is hemmorhaging cash from every orifice doesn't realize a $50 million increase in value in a mere 3 years, especially a team that neither owns the venue they play in nor the network they're broadcast on.

 

Yes, I appreciate all that Loria has done for the franchise, but to villify Wayne while praising Loria is just plain foolish, since it now seems that they're both guilty of gutting a team to make more money losing then they were winning.

 

And for the record, I don't believe for a second that Loria is coming close to losing his shirt in baseball. If it was so bad in Montreal, why did he want back in? Think about it for a second...you're able to walk away from a mess, yet you dive headfirst into another bad situation? That's just not good business sense if we're to believe everything we're told.

 

Sure, the Marlins aren't as profitable as they can be, nor are they as profitable as their National League East bretheren, but a guy (relatively speaking) as poor as Loria simply cannot take a bath every year on his professional sports play-thing. You can't be worth 9 figures and afford to lose 8 figures every year for 4 years straight.

 

There's fuzzy math all around here, and I don't think Loria deserves a free pass.

You actually think this franchise has made money the last three years?

 

I know you're angry your seats went up and you already committed to '06 season tickets under what you consider are false premises, but be logical here. The only reason this team has survived this long is because of money generated by the luxury taxes and other monies from MLB media contracts and merchandise, and Loria reaching in his pocket. But survival doesn't mean profitability.

Made gobs of money? No. Broke even or lost (relatively) insignificant amounts? Yes.

 

Revenue sharing is a big reason why, but the fact remains the Marlins do play in a very lucrative media market, and they do receive quite a bit of MLB welfare. You can't blame the system in place, it helps the team immeasureably. Heck, Loria has to take very little out of his pocket when you consider what's being thrown his way from MLB and other income sources, and this year he's actually going to end up pocketing some of that money.

 

The fact remains that we're talking about self made millionaires here...not trust fund babies. I highly doubt John Henry put the Marlins in a situation where they were completely and remarkably unable to turn a profit with the negotiated lease, and I also doubt that Jeffrey Loria would knowingly accept a lease that bad in a market as apathetic as this without knowing something we're not being told.

 

Notice something interesting?

 

Huizenga dumped the team after 5 years (or after his amortization priveleges were gone). Henry did the same, and Loria's banging the drums for a new stadium now. None of the owners wanted to stick around after that amortization write off was gone, meaning the possibility for cooking the books was gone too. Every single owner claimed the team was losing money but they stick around, yet they all want to drop it like a bad habit once the 5 year amortization period is gone. Shockingly coincidental, right?

You forget that Loria still owns the team and will for the foreseeable future, so your theory goes out the window. Miami wanted him to sell and he said hell no. That's no secret, I reported that here weeks before Samson went public with it and Hank Goldberg was touting it for months.

 

Maybe you do believe he's going to sell the team. I don't. Even if he eventually moves the franchise elsewhere, his amortization period is over. Henry sold because he knew he couldn't get a stadium and the lure of Boston allowed him to do so, not because of an accounting benefit.

 

I'm not even convinced that the amortization schedule outlined by the writer applies. If it did, you'd see half the teams in baseball turning over like clockwork every five years. That a huge loophole in the tax code to not have people taking advantage of it.

 

But as I said, using those losses in advance of a sale only eliminate them when an owner needs them most, when he sells.

 

You also ignore, as does the writer, that Loria isn't the only owner of the Marlins. There are at least two other local owners plus the minority group from Canada, all of whom would be privy to the franchise's financials because it's an LLC, and if the Marlins were making money you have to know that would have leaked out to the media by now.

 

So you can continue to believe as you wish, that's your perrogative, but I don't buy it.

Agree to disagree.

 

However, it isn't fair to compare the Marlins to any other franchise in baseball. To my knowledge, we're the only team that's as "orphaned" as we are, and we're simply a team. No stadium, no television network like NESN or YES or even FSN local (which is a big reason why the Red Sox and Dodgers set records for their sales) comes with ownership. It's an attractive 5 year tax write off for million-dollar corporations looking for creative ways to not pay the IRS...in that scenario, it would benefit all involved parties to simply keep their mouth shut.

 

I've maintained all along (even before the purge) that there is a lot going on in the book-keeping end of this franchise that neither the fans nor the media is privy to...and the information that we're getting spoon-fed is probably poorly taken out of context.

 

To go full on conspiracy theorist, the two "firesales" in team history coincided with the final year of the 5 year amortization period, meaning that time was running out for the high-priced toy to be an easily explainable reason for losses, and a much lower priced, easily believeable profitable team must be put in place. If we finish next to last in attendance, and next to last in payroll, is it that hard to believe we'd actually make some money in 2006?

TSwift, we're in agreement thinking that Loria is only suffering oerating losses which he is recouping through revenue sharing. However to me that points out that the Marlins are not profitable and are needing serious restructuring instead of relying on the third party income. No one knows how if the luxury tax will be extended past this CBA. It hasn't done what it was expected or intended - slowing salary growth and Steinbrennerism. With new stadiums and increases in both broadcast rights payments and other MLB subsidies, some may consider the welfare unnecessary. Even Steinbrenner is find way out of it, proposing to use a loophole to transfer luxury tax payments to stadium construction. However for the Athletics and Marlins, both who have bad leases in bad ballparks... but it takes a lot more than two to force an issue in a room of 29, without a seat on the Executive Council.

I guess the smartest thing for Wayne to do would be to just let Loria have all those extra revenues...Then he could happilly build his Play Land.

Money from the skyboxes and club seats go to pay off debt on the stadium (actually on the land). Back when Dombrowski was Pres ad GM he was quoted as saying the Marlins rceived about $2 million from concessions where other teams regularly got $25-30 million (trying to remember) annually.

 

 

 

 

 

Interesting. But, if club and skybox sales go 100% to the bank, it seems like Loria and his crack sales staff would be selling the hell out of the orange seats and downplaying the others. Granted the AC is the biggest draw, but there are ways to sit in the orange and be comfortable (except on those brutal Sunday 1:00 games, where a visit to the card shows or the team stores can recharge your batteries).

 

Also, on the club/skybox seats, how long must 100% of them go to the bank? Every loan I've ever seen has a payment, term, & amortization schedule. What is the current principal balance of the loan used to build JRS?

good discussion. I have to side with TSwift on this one.

 

 

2003,

Do you believe Loria lost 20 millions?

 

Another question. Does everyone knows if Wayne's rent payments are adjusted by inflation or go up every year?

FreshFish, according to Forbes, the Marlins made $3 million in 2004 after revenue sharing. They probably received about $20 million in revenue sharing, meaning their losses were about $17 million. So, yes, they're losing money and MLB welfare is saving them. Loria just doesn't want to rely on MLB welfare, with good reason.

FreshFish, according to Forbes, the Marlins made $3 million in 2004 after revenue sharing. They probably received about $20 million in revenue sharing, meaning their losses were about $17 million. So, yes, they're losing money and MLB welfare is saving them. Loria just doesn't want to rely on MLB welfare, with good reason.

See, that's the technicality that's annoying. They lost 17 million dollars through operating costs, bad lease, blah blah blah. But at the end of the day they were 3 million dollars up. And this isn't coming from Joe Schmo Expo fan, whom though I agree with a lot he says isn't the most credible of source, it's Forbes. If your bottom line has 3 million written in black, you can't claim this is a horrible year. And if the ammortization is accurate using the 15 million dollar total, that's another 15 million Forbes might have included in the loss department not knowing it wasn't a 'real' loss. So they gained 3 million, with the possibility that they could have possibly gained more. That's 2004, attendance/prices went up in 2005. Imagine next year.

 

Disgusting.