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Marlins to profit bigtime in 2006


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The Florida Marlins baseball franchise will pocket a bundle next season by slashing its player payroll by over $50 million and trading 10 of its star players. The team will bank nearly $72 million in broadcast rights, shared revenue from the league and its cut for the sale of the Washington Nationals before selling one ticket. Marlins brass say they're considering bailing out of South Florida and shopping for a new home because taxpayers refuse to finance a new $500 million domed stadium.

 

http://www.bocaratonnews.com/index.php?src...litics%20Gossip

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:plain

 

Unless the cut of the Washington Senator's sale is really, really, really significant, I don't see how you can argue the Marlins lost a lot of money, or even lost money period.

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Still believe the team lost 8 figures last year?

 

You believe a team whose only revenues are from a small fan base paying some of the cheap ticket prices which many of them would throw away when it began to rain at 6 pm and had its largest player payroll in franchise history, renowned scouting staff and legal consultants didn't run operating losses?

 

South Florida needs to stand on its two feet for once. It was supposed to be a wonderful market. All it's turned out to be is a shelter for a leech who suppresses the Marlins, its owners, its fans and MLB.

 

 

FWIW, I estimate teams to be getting between $10-12M from the sale of the Nationals. ($450M + $10M profits in DC - $100-150M losses in Montreal = $300-350 / 29 ) The national media contracts are rising (while the Marlins' local is still below-average for a market of its size). This is why people have been predicting for awhile this would be a crazy offseason. I don't know where he's getting the $72M figure from. I suspect he's including revenue sharing based on the recent figures, but they won't be getting that much - if any - this year thanks to the cutting of costs to post an operating profit.

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The Marlins top-tier ticket prices are on par with many other teams' top prices. The Marlins give an extremely good value in the upper deck and outfield when compared with other teams, thus bringing the "average" ticket price down.

 

And RFerry, we've been through this, you're simply spinning your tires. The team does not spend in any aspect that would place them above the bottom third of the league, yet they receive MLB welfare doles among the top 5 in the league. Yes, you can manipulate figures to make it appear that losses were sustained, but that's before amortizing the tax deductible loan used to pay for the team, or accounting for the $70 million they recieve from MLB annually.

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Tires that spin are better than ones that are flat, Mr. I Can Run A MLB Front Office On Pennies.

 

When you're drawing as little revenue - as MLB, Loria and every Marlins owner, Forbes and most members of the media - contest the Marlins are, of course they're running operating losses. Although throw in revenue sharing - an unreliable source of revenue or irrespective to the home market's worth to the club - and they're likely breaking even.

 

Next time take a look at whose sitting in those seats behind home plate, then look out to the Fish Tank where people are paying less than what a movie ticket costs, and tell me where the median lies.

 

Sounds like rferry wants a job.

 

Sounds like someone wants a razor.

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Tires that spin are better than ones that are flat, Mr. I Can Run A MLB Front Office On Pennies.

 

Is that aimed at me or Loria...because I'm not the one who fired Fred Ferreira to save a few dollars.

You, if you don't recognize that 1. actions taken this year to correct the misspendings are not representative of past years, and 2. the best player Ferreira has been able to sign here, with all the money spent on amateur signings (which up to this recent decision to decline to offer arbitration to some players proved or atleast suggested they weren't holding back funds) and a crack staff of the Marlins and Expos' best, has been Jose Campusano, Jose Campusano! Next you're going to be telling us Loria is cheap for trading a .230 hitting third baseman.

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LOL there are STILL FO apologists.

 

I do believe that they lost money last season. How much, I dont know.

 

Does anyone know what they pay in rent?

 

I heard Eddie K talking about this about 2 weeks ago. He was saying how before the Marlins sell one ticket they are already recieveing 70+ million from MLB. Its rediculous to think that the team is losing so much money and that they couldve held a competative team this season instead of pissing off the fan base once again.

 

Loria and Samson are a bunch of carpet baggers that really only care about the bottomline. I do realize Loria brought this town a WS but look at my sig if you wanna know the rest.

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You believe a team whose only revenues are from a small fan base paying some of the cheap ticket prices which many of them would throw away when it began to rain at 6 pm and had its largest player payroll in franchise history, renowned scouting staff and legal consultants didn't run operating losses?

 

South Florida needs to stand on its two feet for once. It was supposed to be a wonderful market. All it's turned out to be is a shelter for a leech who suppresses the Marlins, its owners, its fans and MLB.

 

 

FWIW, I estimate teams to be getting between $10-12M from the sale of the Nationals. ($450M + $10M profits in DC - $100-150M losses in Montreal = $300-350 / 29 ) The national media contracts are rising (while the Marlins' local is still below-average for a market of its size). This is why people have been predicting for awhile this would be a crazy offseason. I don't know where he's getting the $72M figure from. I suspect he's including revenue sharing based on the recent figures, but they won't be getting that much - if any - this year thanks to the cutting of costs to post an operating profit.

Come on rferry, you're going to have to present more than "I estimate," "I don't know," and "I suspect" mixed in with a lot of rhetoric. Throw some real, factual numbers down instead of playing with your cards facing you.

 

As for the figures you presented, taking the max of your guess (12 million) away from the $72 million outlined in the article leaves us with a number of $50 million before at the gate receipts are included. The situation in South America is not dire enough to where a team with only 20 million left to make up in ticket revenue, apparel sales, and other team affliated profit areas cannot see black at the end of the year, much less in South Florida.

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Rferry....you're right about SoFla having a lousy fan base, but you're letting that bias your opinion on the economics, and you're wrong about the economics. To the rest of you.......There's nothing that you're going to say that will make Rferry admit that he is wrong or may even possibly be wrong. He has his opinion, however misguided many of us feel that it is. He's stuck, because he's a facts and stats man, and here's a situation where you don't get to see all the facts. Just what MLB wants to show you. So many of us can go on believing that the Marlins are making money and have made money. I know I do. Rferry can go on believing what he wants. His opinion doesn't explain why the value of MLB franchises keeps going higher and higher, even for the small market teams. And no team has gone bankrupt in recent memory.

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Tires that spin are better than ones that are flat, Mr. I Can Run A MLB Front Office On Pennies.

 

When you're drawing as little revenue - as MLB, Loria and every Marlins owner, Forbes and most members of the media - contest the Marlins are, of course they're running operating losses.

 

The Devil Rays don't have losses, but then again, they have a payroll of 20 Million compared to ours of 50.

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Has it not dawned on any of those of you who believe this insane notion that somehow the Marlins are a profitable (or at least a break-even) entity or somehow Jeffrey Loria didn't lose tens upon tens of millions propping up the Montreal Expos and then the Florida Marlins that none of this would have come out when the minority owners tried unsuccessfully TWICE to steal back the franchise or that since the franchise is incorporated as an LLC each minority owner has access to the company's financials for their own tax preparation purposes that someone (since there is no love lost between Loria and the Canadian minority investors) wouldn't have spilled the beans by now?

 

Instead, you feed your conspiratorial beliefs by accepting as gospel the rantings of a political gossip columnist from a podunk paper, and an author who has never said a positive word about he organization since day one.

 

It is without argument that the Marlins operate under the worst lease agreement in baseball. In 2003, long before any of these issues were raised, David Samson opined that for the Marlins to break-even the franchise would have to sell 72,000 seats a night under that lease. And yet no enterprising South Florida reporter has been able to piece together enough information to prove that statement false.

 

And this notion that somehow there is this shell game going on regarding tax-writeoffs and debt amortization that somehow are masking the real bottom-line of the franchise makes zero sense when the greatest value of these accumulated losses would be if and when the franchise is sold and used to offset potentially windfall profits from the sale when the tax consequences would be the greatest.

 

Put simply, creating a hypothetical scenario where the franchise is making let's say $10 million year, but fifteen million in carryforward losses also exist, using them now you leave the organization vunerable to a much greater tax consequence if the franchise is sold at a large profit. I submit it would be better to pay $ 3million in taxes on $10 million each year than to waste those accumulated carry forward losses for five years to knock $75 or $150 million off the sale price.

 

I believe Loria has lost at least $50 million dollars since purchasing the franchise, $50 million that he's he had to reach into his pocket to fund. This isn't funny money, these are real dollars invested in trying to keep the team competitive and financially solvent.

 

I suggest some of you need a course in corporate tax law and to read the pleadings from the minority suits, or perhaps have your tax attorneys review the complete body of relevant data. I'd also suggest you listen to the words of condolence from almost every former member of the team traded who almost to a man recognized Loria did everything humanly possible to support the franchise and they all understand why ultimately it came to this.

 

So keep living in your dreamworld and search out the bogeyman under whatever rock you think he exists if somehow it gives you comfort. But know, in the end, you are on a fool's errand.

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That was a nice, coherent post 2003. But it doesn't give me facts.

 

The last numbers I can find from Forbes (which I would submit as the most reputable financial institution commenting on the Marlin finances to this point) indicates the following: The Marlins on the 26th of April 2004 had a value of $172 Million, up from the $158 Million Jeffery Loria purchased the team for originally. In 2003 they netted $101 Million in revenue, with a negative $11.6 Million operating income (earnings before interest, taxes, depreciation, and amortization), player expenses of $66 Million, and Gate Receipts of $27 Million. Now, pure math gives us that:

 

$101 Million + (-$11.6 Million) = $89.4 Million

$89.4 Million - $66 Million = $23.4 Million

$23.4 Million + $27 Million = $50.4 Million

 

Now, let's get Forbes' posting as of the 28th of April 2003 have slightly different numbers. The value of the team according to Forbes was $136 Million (meaning there was an upkick of 27% from one year to the next). The revenue for the franchise was also lower in 2002 than it was in 2003, at $76 Million. Operating income was a slightly worse negative $14 million, while player expenses were $53 Million. Keeping with the lower trend, gate receipts totaled $8 Million.

 

$76 Million + (-$14 Million) = $62 Million

$62 Million - $53 Million = $9 Million

$9 Million + $8 Million = $17 Million

 

Clearly, a much better year both on and off the field for the team in 2003 than 2002. But one must think that though the profits might not be as high as they were the year of the championship, attendance has continued to increase since the 2003 season and would lead to a consistently higher number than $8 Million for gate receipts. Also, while the salary has been on the high end in both 2004 and 2005, one would figure that revenue (though not as high as 2003) must be a bit higher than it was in 2002 when interest in the team was at a four year low. Now, I'm not trying to say that there isn't something Forbes could be missing, but these are the only reputable numbers we have. If we're going to discredit numbers from newspaper articles then I submit numbers from the management could possibly be just as misleading. Forbes is completely impartial in the matter, and has a long standing reputation for being among the best in the financial world. I believe these numbers are trustworthy, and if 2002 (a very down year for the club) and 2003 (a very high year for the club) are any indication, this club is not in the financial peril it claims to be.

 

Forbes' posting (4.26.2004) - http://www.forbes.com/forbes/2004/0426/066tab_26.html

Forbes' posting (4.28.2003) - http://www.forbes.com/free_forbes/2003/0428/mlb_29.html

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What you're doing Juanky is counting gate receipts twice, first as part of the revenue line (there is no indication in the Forbes pieces that the stated revenue doesn't include gate receipts) and then again separately as a unique line item. How else could revenues be over $100 million considering their PPS lease agreement unless gate receipts (which according to Forbes includes clubseats which we all know are pledged to paying off the stadium bonds) were included?

 

You'll notice Forbes shys away from suggesting or estimating profitability of this or other franchises. There's a reason, they don't have a clue whether the franchise is profitable or not and are unable to calculate real costs like interest (interest is not some fictional accounting trick, paying interest, whether it is deductible or not, is done with real dollars), or organizational expenses. Baseball is the only sport where the parent club carries so much of their minor league burden - football for example doesn't have a minor league, nor does basketball - or costs of scouting, signing draftees, business insurance, (the list is endless) etc.

 

I know I'm not going to change the mind of one of you who are convinced that Loria is making a bundle or even breaking even since acquiring this franchise. But I'm here to say you're deceiving yourselves.

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I've been the only one in this debate that has stretched over three threads (a common trend by those who are clowned, ignore it and start a new thread) has delved into numbers. It is others that are presenting their "if the team won't pay a mascot, they aren't paying anyone" theories. And counting past year's revenue sharing to a new year's books - a year in which expenses has been cut drastically and they expect to post the first operating profits in how long!?! Oh, yeah, of course, MLB will write them that same check. Absolutly. Of course.

 

By MLB's books under the John Henry era (remember how Henry operated the club? Nothing like most people expect a rich local owner would), the Marlins ran losses, with very low revenues and mid-level expenses. Under Forbes' estimates, which are more reasonable and include revenue sharing payments, the Marlins are breaking even or making a small profit. From reports from Sarah Talalay and Doug Pappas, the Marlins aren't in good financial health. I've linked to this material and asked for those to read it in the thread before this. I took this material and designed a worksheet for estimating the Marlins' revenues and expenses in the the thread before that.

 

I'm not saying the books hadn't been cooked or that they won't, I'm saying it's entirely unreasonable for the Marlins to 1. rely on revenue sharing that is for renewal this year and has been considered a failure at worse or useless at best by many analysts, and 2. to cook the books to prove their point. Everyone in position to do anything about it knows the Marlins have a terrible lease. They've experienced firsthand how poor the location and the stadium's amenities are for the region. It's just that these people don't care. The bellyaching by the Marlins is to encourage fans to act on their behalf. I think they're doing a poor job and are coming off two-faced as many people they're targetting do not understand the issues or enter with a chip on their shoulders. But that's irrevalent to the discussion I believe. What is that the Florida Marlins are not a profitable venture and steps need to be taken for and by their owners to turn that around.

 

His opinion doesn't explain why the value of MLB franchises keeps going higher and higher, even for the small market teams. And no team has gone bankrupt in recent memory.

 

That's irrevalent to the point. The books are hidden from view from potential investors as much as they are from you and I. The reason why franchise values keep climbing is that the amount of people with deep pockets who want to own major league franchises is always higher than available franchises.

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