Samson: Costs far exceed payroll

Marlins president David Samson said the team is not in line to make a major profit this year.

BY BARRY JACKSON

bjackson@MiamiHerald.com

 

Even before selling a single ticket or a single sponsorship, the Marlins are expected to collect more than $55 million this season from a combination of revenue sharing as well as local, national and international broadcast contracts.

 

Because the team has a player payroll of $18.7 million (including $3.25 million to ex-Marlins Ivan Rodriguez, Carlos Delgado and Al Leiter), that would seem to suggest owner Jeffrey Loria will make a substantial profit in 2006.

 

Not so, Marlins president David Samson repeatedly has insisted.

 

''Jeffrey has not taken one dollar out of the team this year. He has not put one dollar into the team this year,'' Samson reiterated last week. ``And that will stay the same next year.''

 

Samson, who said Loria lost more than $80 million during his first four years as Marlins owner (2002-2005), declined to reveal how much money the Marlins are earning and spending this season.

 

So how can a team not be profitable when it's expected to pocket substantially more from revenue sharing than it spends on big-league payroll?

 

OTHER COSTS

 

Samson said the Marlins have a ''positive EBITA,'' which refers to earnings before interest, taxes and amortization. But Samson said the team ends up only breaking even after factoring in those three ''substantial'' costs and depreciation.

 

''I can certainly understand there are individuals who may incorrectly believe that there should be a direct correlation between our payroll and the perceived amount the team receives in revenue sharing [and other revenue sources],'' Samson said.

 

``What individuals are not thinking about . . . is they're talking about EBITA, which does not include many cash items that are required to be paid for by the team. There was absolutely no money extra from the first day of our year to the last day of our year. There was not an extra dollar that was not spent on something.''

 

Samson pointed to several categories of expenses that are costly beyond player payroll, but declined to give precise expenditures. Among them:

 

? Baseball operations, which includes amateur and international player signing bonuses and running the minor-league operations. ''That's over $20 million, minimum,'' Samson said.

 

? Administrative expenses, ''which is tens of millions of dollars, just to run the team, to pay the employees, and I don't mean the players.'' As owner, Loria does not earn a salary.

 

? Marketing. ``We are probably in the top five in baseball in marketing expenditures in terms of billboards, buying time on TV.''

 

? Paying (along with the other teams) the expenses to operate the MLB offices in New York, including employee salaries.

 

INCOMING MONIES

 

The Marlins earned $28 million in revenue sharing last year and collect about $20 million for national and international TV and radio contracts, and more than $10 million for local TV and radio deals. The sale of the Washington Nationals is expected to deliver another $10 million for each franchise.

 

Marc Ganis, a Chicago-based sports consultant who is familiar with baseball economics, hasn't seen the Marlins' books, but said he would think the Marlins likely would be profitable this year unless repayment of loans and debt from past losses are factored in.

 

But Samson said the Marlins' bottom line this year does not include covering losses from the past four years. ''We haven't been able to do that,'' Samson said. ``We don't have enough money to do that.''

 

Would Loria consider using revenue sharing money toward a stadium deal? Samson called that ''preposterous,'' adding that revenue sharing ``is meant to help finance our baseball operation.''

 

Samson said even though Loria hasn't signed off on next year's payroll, it likely won't be dramatically higher than this year's. Next season, the Marlins won't owe any more money to Rodriguez, but they will be obligated to pay $2 million to Delgado, who now plays for the Mets, and $1.25 million to Leiter, who is retired.

 

No current Marlin is under contract for next season, but the team owns rights to everyone on the roster except impending free agents Wes Helms, Brian Moehler, Matt Herges and Joe Borowski.

 

http://www.miami.com/mld/miamiherald/sports/15652622.htm

I am calling bulls*** on Mr. Samson here.

 

 

 

 

And that line about marketing? Maybe if they didn't have such lame marketing ads, they might get people going to the park!

:lol :lol :lol :lol

 

The crackerjack returns.

 

Puhlease. It's times like this I'm actually legitimately angered I spend money on this team.

 

Hmm...let's see, cited losses of $20 million last season. All other things equal, a cut of $45 million on salary this year to last and...we're breaking even! Yay for fuzzy math.

All things aren't equal. As you should surely know.

 

Granted Samson's message is falling on deaf ears. No fan cares about administrative costs or minor league salaries, whether they make up 10% of the budget or 90%. This will go in one ear and out the next, leaving only an excuse to dislike the man.

All things aren't equal. As you should surely know.

 

Granted Samson's message is falling on deaf ears. No fan cares about administrative costs or minor league salaries, whether they make up 10% of the budget or 90%. This will go in one ear and out the next, leaving only an excuse to dislike the man.

 

 

:violin

 

Are you actually suggesting that the Marlins managed to take on $20 million in operating costs in a year AFTER they had 5 first round picks?

 

Let's do it simply:

 

2005: $65 million payroll, 5 first round picks, an alleged $20 million loss

2006: $18 million payroll, 2 first round picks, allegedly breaking even. So, to offset the $40 million windfall from non-invested revenue sharing money (and assuming that the Marlins ticket revenue remains roughly the same as the slight decrese in attendance is easily offset by the price-hikes across all ticket categories) the Marlins would have to find some way to add $20 million in expenses just to break even. That doesn't even factor into consideration that last year's picks proved more expensive than our "on a budget" selections this year...it wasn't as if Sinkbeil was a name, or even a sure-fire #1, he just smacked of signability. Nor were there any international signings of consequence, or any reasonable perception that the Marlins have reinvested in the latin-America scouting department. As a matter of fact, I recall many debates here that we weren't doing nearly enough in international scouting and with the amount of money we have lying around, that area should be addressed.

 

Of course, this comes from David Samson, and he'd be able to sell you ocean front property in Arizona without hesitation so I'm not the least bit surprised of your misguided faith.

It's because they charge you more on the back end of your EBITA if you are a crappy liar.

 

Samson lost my respect, what an ass.

Samson, who said Loria lost more than $80 million during his first four years as Marlins owner (2002-2005), declined to reveal how much money the Marlins are earning and spending this season.

Further proof Loria is repeating his Montreal tactics, trying to destroy the team as part of his strategy to demand a stadium.

 

Unfortunately, the Herald prints it without any research into the numbers, which are all BS. They included, with a straight face, the claim that depreciation and the no doubt sky high FO salaries are legitimately taken into account when calculating profits? BS! Depreciating the players' value is the biggest scam in sports accounting, and bears no relation to real world economic effects. It's legal, but to claim it reflects any actual loss is bogus. And it is well known that the other expenses MLB teams deduct are often inflated, perhaps fooling gullible reporters, but not anyone with even a cursory knowledge of sports economics.

 

At any rate, fellow fans, the part of this article that goes even farther to prove the point is this statement from the Prince of Darkness:

 

Samson said even though Loria hasn't signed off on next year's payroll, it likely won't be dramatically higher than this year's.

 

So forget that new CF, that retooled bullpen, etc. Forget having a payroll even within shouting distance of the next lowest in MLB.

 

These are their Montreal tactics, purposely making decisions that depress attendance, tv ratings, and fan interest. All so these carpetbagging clowns can line their pockets while saying: "We can't survive in this market without a new stadium, paid for by the public." Disgusting!

 

It looks like it's GOOD BYE MARLINS. Too bad it can't be GOOD BYE SAMSON AND LORIA.

Pardon the pun, but something smells awfully fishy about all of this. :thumbdown

Samson acts like we're the only team that has to pay personnel , and all the other costs.

 

I'm sure all these other owners that put much much more money into the product on the field are losing money.

There's some fuzzy math going on there, if not outright deception (either by Samson or the writer).

 

Sampson talks about things that are outside EBITA and the article then lists marketing, baseball expenses, and admin expenses. Those items are all part of EBITA, in other words those admin expenses and marketing expenses are taken before calculating EBITA. Samson already admits that the Marlins have a positive EBITA so he's admitting that they have a profit after deducting marketing and baseball/admin expenses. Why bring it up like it's after EBITA? EBITA exludes 3 things - Interest, Taxes, and Amortization. Marketing expenses are not any of those 3 things.

 

The other thing I don't believe is that Admin expenses, which are listed separately than baseball expenses, are in the "tens of millions" of dollars. I'm guessing that Admin Expenses are for the accountants, computer geeks, clerical staff, maintenance, office space, paper clips, etc. - people and items that any company would have. "Tens of millions" implies to me that it's at least $20 million. Let's give him the benefit of the doubt and say it's $20 million on payroll, which is typically the biggest admin expense. That's over 300 employees making more than $60,000 per year each. I find that hard to believe in a company the size of the Marlins. I think Samson is referring to the same expenses twice in both baseball expenses (which I truly believe is in the tens of millions) and admin expenses.

 

I don't think they're making tens of millions of dollars in profit this year but I don't like them implying that the profit they admit to doesn't include marketing and admin expense.

No. Impossible. There is no way that you have found a way to spend over 35 million dollars (not counting any money they might be getting after that initial 55 mil). You're cutting costs on the scouting department, you're cutting costs on the payroll, you don't even employ the full compliment of stadium staff, and you honestly want us to believe this team is barely breaking even?

 

Go to hell.

:lol :lol :lol :lol

 

The crackerjack returns.

 

Puhlease. It's times like this I'm actually legitimately angered I spend money on this team.

 

Hmm...let's see, cited losses of $20 million last season. All other things equal, a cut of $45 million on salary this year to last and...we're breaking even! Yay for fuzzy math.

 

 

I made a long, angry post about this in the topic "2007 payroll". It would have been more appropriate here.

TSwift, your short take here is so right on that even the most ardent Loria supporter should see through the SamsonSpin version. Essentially, he is so full of crap that one can only imagine the GIGO (garbage in garbage out) the people who have dealt with him in negotiations have to stomach.