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Hammerin' Hank on WQAM said...


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If you take $22 million a year and increase it by 3% each year over the next 40 years and discount it at 6% the present value is $501 million. I think the incremental revenues in a new stadium would be close to $50 million in the initial year so he could buy his own stadium and have millions left over for the other stuff. If you discount over 30 years rather than 40 years you get $423 million.

 

I don't follow you. What does the 3% increase and 6% discount mean. Present value I understand. And I agree that the incremental revenue should be around 50 Million in year 1, but what about year 2-40. Bear with me, I have a degree in finance, but it's from UF and I graduated with just a 3.8 GPA so take it for what it's worth.

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Hank Goldberg doesnt give 2 sh*ts about professional baseball in South Florida so take his statements for what they are worth.

 

Hank obviously is more of a football and basketball fan than baseball but out of the local media he's the only one with any original thoughts and insight into the stadium situation and just because he hates Loria and Samson doesn't mean he hates baseball.

 

 

 

He's been jealous of the Marlins success ever since 97' and he bashes the team/organization every chance he gets.

 

I listen to Boog if I want to hear knowledgable baseball talk.

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If you take $22 million a year and increase it by 3% each year over the next 40 years and discount it at 6% the present value is $501 million. I think the incremental revenues in a new stadium would be close to $50 million in the initial year so he could buy his own stadium and have millions left over for the other stuff. If you discount over 30 years rather than 40 years you get $423 million.

 

I don't follow you. What does the 3% increase and 6% discount mean. Present value I understand. And I agree that the incremental revenue should be around 50 Million in year 1, but what about year 2-40. Bear with me, I have a degree in finance, but it's from UF and I graduated with just a 3.8 GPA so take it for what it's worth.

Each year the incremental revenues generated by the new stadium should increase due to increases in tickets prices, parking fees, advertising fees, luxury boxes, etc. so the monies available to pay for the stadium ($22 million in Year 1 in the calculation) should increase every year and I assumed 3% yearly increase (historical rate of inflation). What this means is that the $22 million from Year 1 becomes $22.7 million in Year 2 and then $23.3 million in Year 3 and so on (each year increasing by 3%).

 

The 6% is the interest rate I used to discount the future cash flows from the above paragraph.

 

I hope that explains it.

 

What I'm trying to illustrate is that Loria would generate so much more revenue in a new stadium compared to DS that he can well afford to buy it on his own and still have plenty left for other stuff. Of course it would be better for him if taxpayers buy him the stadium so he can keep more of the money for himself.

 

 

I listen to Boog if I want to hear knowledgable baseball talk.

 

I used to like Boog's show but since around this time last year his show was taken over by talk about his football pool which I can't imagine anyone other than the handful of people in the pool care about and that along with his idiotic and never ending manager (or coach) doesn't matter talk that has driven me away from his show. He also repeats Samson's figures regarding the team's finances as if they are fact and that bothers me.

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Hank Goldberg doesnt give 2 sh*ts about professional baseball in South Florida so take his statements for what they are worth.

 

Hank obviously is more of a football and basketball fan than baseball but out of the local media he's the only one with any original thoughts and insight into the stadium situation and just because he hates Loria and Samson doesn't mean he hates baseball.

 

 

 

He's been jealous of the Marlins success ever since 97' and he bashes the team/organization every chance he gets.

 

I listen to Boog if I want to hear knowledgable baseball talk.

 

 

Why is Hank jealous of the Marlins' success? I'm not questioning your statement, I'm just curious. (I don't listen to him enough to know.)

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Hank Goldberg doesnt give 2 sh*ts about professional baseball in South Florida so take his statements for what they are worth.

 

Hank obviously is more of a football and basketball fan than baseball but out of the local media he's the only one with any original thoughts and insight into the stadium situation and just because he hates Loria and Samson doesn't mean he hates baseball.

 

 

 

He's been jealous of the Marlins success ever since 97' and he bashes the team/organization every chance he gets.

 

I listen to Boog if I want to hear knowledgable baseball talk.

 

 

Why is Hank jealous of the Marlins' success? I'm not questioning your statement, I'm just curious. (I don't listen to him enough to know.)

 

Because he's a Dolphin guy :shrugs

 

Honestly, there are too many conspiracy theories in the South Florida media for me, not everyone is out to get _______ because of ________

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Rferry, an owner with deep pockets could get it done. Even Loria could get it done if he pledge additional future revenues to cover the funding gap.

 

Sure, a richer owner COULD. And that IS a strike against Loria. But there's little incentive for an owner of the Marlins to do so. And MLB wouldn't allow it. So it's insignificant.

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Rferry, an owner with deep pockets could get it done. Even Loria could get it done if he pledge additional future revenues to cover the funding gap.

 

Sure, a richer owner COULD. And that IS a strike against Loria. But there's little incentive for an owner of the Marlins to do so. And MLB wouldn't allow it. So it's insignificant.

Back in the spring of '04 if Loria had covered the $30 million funding gap he would start generating the incremental revenues by '07 or '08 but by not doing it and holding out for a "better deal" he has jeopardized or at least delayed and the flow of incremental revenues by who knows how many years so I think there was an incentive to cover that gap. I think the other owners would have preferred if Loria had covered the gap because if he had covered it then by '07 or '08 the other owners would no longer have to support him through revenue sharing welfare checks.

 

Revenue sharing is really the problem here as it creates a disincentive for Loria to get the deal done. Once he gets a stadium he gets approximately $50 million in incremental revenue but he losses $30 million in revenue sharing so it's only a net +$20 million. If MLB eliminated revenue sharing then there would be more on an incentive for Loria to get the deal done. I hate revenue sharing.

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I can tell you that the other MLB owners did not want Loria to settle in 2004 or 2005. At that time, they were negotiating with DC to build a dream ballpark at zero cost to MLB, which would have influenced any stadium deal negotiated thereafter.

 

I, too, question the effect of revenue sharing. However one thing is certain: it has helped everyone. It gave the league stability, allowing it to grow. Investments like MLBAM would not have been possible if the weakest links of the chain were not secured. And you are right that in some cases (notably teams unable or unprepared to benefit substantially from winning or whom the tax severely punishes), the revenue sharing system acts as a disincentive to its intent: improving a team's on field product, and thus making the league more competitive. It some cases, the owner could make more money with efforts to hide or restrain revenue than by winning. The Marlins, Athletics and Twins are not those teams. The Yankees, Red Sox, Mets, Royals, Devil Rays and Pirates are.

In the case of the Marlins, your reasoning is a bit off. Using past figures the Marlins lost $20M in 2003 and received $20M in revenue sharing transfers (net: 0). All things being equal, that $50M revenue spike will result in outgoing revenue shares of no more than $10M (net: 40). Making for 40 million reasons why Loria should want to get the deal done.

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I can tell you that the other MLB owners did not want Loria to settle in 2004 or 2005. At that time, they were negotiating with DC to build a dream ballpark at zero cost to MLB, which would have influenced any stadium deal negotiated thereafter.

 

I, too, question the effect of revenue sharing. However one thing is certain: it has helped everyone. It gave the league stability, allowing it to grow. Investments like MLBAM would not have been possible if the weakest links of the chain were not secured. And you are right that in some cases (notably teams unable or unprepared to benefit substantially from winning or whom the tax severely punishes), the revenue sharing system acts as a disincentive to its intent: improving a team's on field product, and thus making the league more competitive. It some cases, the owner could make more money with efforts to hide or restrain revenue than by winning. The Marlins, Athletics and Twins are not those teams. The Yankees, Red Sox, Mets, Royals, Devil Rays and Pirates are.

In the case of the Marlins, your reasoning is a bit off. Using past figures the Marlins lost $20M in 2003 and received $20M in revenue sharing transfers (net: 0). All things being equal, that $50M revenue spike will result in outgoing revenue shares of no more than $10M (net: 40). Making for 40 million reasons why Loria should want to get the deal done.

 

You're forgetting that right now he's getting $30 million in revenue sharing but with a new stadium he would no longer get that $30 million so his incremental revenues with a new stadium net of the lost revenue sharing is only $20 million ($50 million less $30 million). If the assumption taht Loria will become a revenue sharing payer at the tune of $10 million per year is correct then his net incremental revenues would only be $10 million. Under this scenario he wont move a finger until he gets the perfect deal and revenue sharing should get much of the blame as to why we don't get a stadium deal done.

 

I guess I like revenue sharing in theory but they need to put safeguards to prevent abuse.

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  • 2 weeks later...

I heard it too. He mentioned it twice. The second time was during his interview with M. Berandino. According to him the only people in this meeting will be: County Manager G. Burgess, officials from the City of Miami and MLB only (no one from the team).

 

I guess we'll have to wait.

 

Maybe gobucks, marlins2003, cape or quadruple play can add to this.

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I heard it too. He mentioned it twice. The second time was during his interview with M. Berandino. According to him the only people in this meeting will be: County Manager G. Burgess, officials from the City of Miami and MLB only (no one from the team).

 

I guess we'll have to wait.

 

Maybe gobucks, marlins2003, cape or quadruple play can add to this.

 

Interesting that they continue to leave the Marlins out of it.

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