I find it amusing that these documents pretty much validate everything many of us have been saying on this forum for years, and yet there are still a few clowns claiming that the Marlins are being greedy and up to unethical behavior.

 

You find it amusing? It's kind of driving me up the wall. I mean, sure, if it was Mungo or something, whatever, but it's the media. Articles like those are misleading people.

you're never allowed to make any money back without the media lambasting you.

 

Yup. Between the media and some of the "fans" you'd think it was some sort of sin to turn a profit. I guess people forget that the partners could earn about $7 million a year on their $200 million in 30-year Treasury bonds with zero risk and without lifting a finger except to check that their coupon interest had been credited (nobody clips coupons anymore, it's all electronic.) Any business involving the degree of risk of MLB wouldn't return less than $20 million average per year on $200 million.

 

I especially like Samson's comment, "We could have had Cabrera and no ballpark."

 

I don't think people understand how important it was to bolster the balance sheet prior to the stadium bond sale, and even at that those bonds barely got sold. IIRC, Loria had to step up to buy the last $6 million that was unsubscribed, which was extraordinary, normally the underwriter(s) would guarantee to pick up any shortfall for their own inventory. But, that was the nasty environment that existed when the bonds were moved. So, for once, Samson is exactly right.

 

There is no doubt that Florida Marlins, LP's cumulative operating deficit is $62 million. Probably since 2002, but that figure would also include any losses from 1999 through 2001 when the partnership owned the Expos as it simply changed its name from Montreal Expos, LP to Florida Marlins, LP, and any pre-'02 cumulative operating deficit at that point would have remained on the books. In any case the current bunch of partners have lost a cumulative $62 million over somewhere between 8 and 11 years, and we don't know what the split (if any) is between the Expos and the Marlins.

 

Here's a little trivia that's actually not so trivial.

 

Based on bizofbaseball.com's numbers, the most recent year of Pirates, Angels and Mariners concession (non-parking, Rays not included because their figure included parking) income per fan per game averaged $4.93. The Marlins? $1.64.

 

On their '09 attendance of 1,577,853, that difference cost the Marlins $5.2 million. or approximately one additional player of the caliber of Cantu.

 

And not just in '09, but in every single year since 2002 (as far as Loria is concerned, and actually since 1993.) Thanks, Wayne, what a wonderful stadium lease!

 

Or, 8 years of $5 extra million of revenue might have meant that we could have had Cabrera AND the ballpark. Thanks again, Wayne!

 

Then there's parking. The Marlins' parking revenue figure for '09 was $450K. On attendance of 1,577,853, estimating conservatively at about 4 per car that's 400K cars parked. At $10 per, that's $4 million, which got to be at least $2 million (maybe closer to $3 million) after expenses. Not $450K as a small percentage of the profit. Damn, Wayne, you've got to be the best lease negotiator seen around here in a long, long time!

If the only way you can afford a stadium is by giving the fans the worst product (at least financially) in baseball and earning the entire payroll in profit, then you can't really afford a stadium. Look, it worked, and Loria and Samson might have been smart to do it, but I don't believe baseball should allow their teams to operate like that. Hopefully when the new stadium opens they will legitimately spend and the fans will come and it all will have worked. We'll see.

 

This is silly.

 

If you look at the documents, the Marlins were bringing in about $21 million in ticket revenue each year in 2008 and 2009, while averaging about 18,000 in attendance over both of those years.

 

Consider 2004 and 2005. The Marlins had just won the World Series and had retained most of the main pieces. They even gave Carlos Delgado a huge contract. And yet they were only averaging about 23,000 in attendance. That's pretty pathetic under the circumstances and not sustainable because the ticket revenue does not match payroll ($55 million in 2005), so there was a market correction.

 

The problem is that the Marlins have tried to give the Marlins the best product. They made a legitimate effort to make the postseason in 2004 and 2005 and the fans still did not come. Thus, the problem lies with the fans. The problem with the fanbase probably has multiple causes. Some of it is probably due to Miami being a bad baseball town. The thought that a lot of it had to do with the stadium (with a retractable roof), since good teams alone weren't drawing. Instead of pouring all of their revenue in free agents in 2006 and 2007 (and so on), the Marlins redirected their finances in what they considered to be a better investment, which is a new stadium. They obviously think that a new ballpark is the only investment that has the ability to bring in the fans (to increase their revenue) and keep baseball in South Florida.

 

I would blame the fans for not making a better effort to support the team when it was good (2004 and 2005) and state/local politicians for making the stadium financing so difficult. Loria&co was the only entity that appeared to have the best interests of South Florida baseball in mind.

it's 42 pages

 

Except that the cumulative operating loss appears, in all of its unmistakable glory, on page 1.

I find it amusing that these documents pretty much validate everything many of us have been saying on this forum for years, and yet there are still a few clowns claiming that the Marlins are being greedy and up to unethical behavior.

 

You find it amusing? It's kind of driving me up the wall. I mean, sure, if it was Mungo or something, whatever, but it's the media. Articles like those are misleading people.

I read so much in the media that makes me angry, that I can't help but be amused anymore.

 

Very few journalists have actual expertise in finances or economics these days, so I just tend to laugh the ignorance off.

it's 42 pages

 

Except that the cumulative operating loss appears, in all of its unmistakable glory, on page 1.

I was aware but I was trying to be nice. I'm assuming someone is just using someone else's article as their source when they see "Ah crap, 42 pages?! I'll assume what Capozzi wrote was the whole story."

this thing is a b*tch to print, anyone have it in an easier to print format? or a PDF?

#Marlins president David Samson said MLB will seek legal recourse to find the source who leaked dead.spin docs on teams finances

https://twitter.com/...tus/21948113971

 

 

Furthermore,

As the AP reported, the Pirates pulled in about $30 million in total net profit in 2007 and 2008, while the Marlins nearly matched that number in 2008 with a whopping $29.46 million and another $4-plus million coming in in 2009. For reference, former Marlin Miguel Cabrera made $26.3 million total in 2008 and 2009. Both clubs were recipients of large amounts of revenue-sharing money

http://mlb.fanhouse....kusspor00000002

After reading the Sun-senital this morning i'm very glad i cancel my season tickets this season, i know their will be folks making all kind of excuses for the owners, don't want to read how this team can't afford to keep a good player for just a million dollars and we wonder why no one want to attend games, every time you talk about getting a player someone would post we can't afford him, well it seem otherwise, if only the FO would stop stuffing their pockets we can get good players, ok, start the piling on and i know who will be first.

If the only way you can afford a stadium is by giving the fans the worst product (at least financially) in baseball and earning the entire payroll in profit, then you can't really afford a stadium. Look, it worked, and Loria and Samson might have been smart to do it, but I don't believe baseball should allow their teams to operate like that. Hopefully when the new stadium opens they will legitimately spend and the fans will come and it all will have worked. We'll see.

 

This is silly.

 

If you look at the documents, the Marlins were bringing in about $21 million in ticket revenue each year in 2008 and 2009, while averaging about 18,000 in attendance over both of those years.

 

Consider 2004 and 2005. The Marlins had just won the World Series and had retained most of the main pieces. They even gave Carlos Delgado a huge contract. And yet they were only averaging about 23,000 in attendance. That's pretty pathetic under the circumstances and not sustainable because the ticket revenue does not match payroll ($55 million in 2005), so there was a market correction.

 

The problem is that the Marlins have tried to give the Marlins the best product. They made a legitimate effort to make the postseason in 2004 and 2005 and the fans still did not come. Thus, the problem lies with the fans. The problem with the fanbase probably has multiple causes. Some of it is probably due to Miami being a bad baseball town. The thought that a lot of it had to do with the stadium (with a retractable roof), since good teams alone weren't drawing. Instead of pouring all of their revenue in free agents in 2006 and 2007 (and so on), the Marlins redirected their finances in what they considered to be a better investment, which is a new stadium. They obviously think that a new ballpark is the only investment that has the ability to bring in the fans (to increase their revenue) and keep baseball in South Florida.

 

I would blame the fans for not making a better effort to support the team when it was good (2004 and 2005) and state/local politicians for making the stadium financing so difficult. Loria&co was the only entity that appeared to have the best interests of South Florida baseball in mind.

 

Agree totally. Why should these guys break the bank when nobody shows up? I find it funny that the media takes a shot at the team saying they have no fans, and in the same breath they say that the FO screws the fans. Which one is it? Listening to the Big O on 560 yesterday all the callers were spitting venom about the Cody trade, and he asked one of the guys when the last time he went to a game, and the guy couldn't remember. As much as people like to hate on them, the FO has tried in the past signing big guys, and it doesn't put butts in the seats. Why should they keep trying?

After reading the Sun-senital this morning i'm very glad i cancel my season tickets this season, i know their will be folks making all kind of excuses for the owners, don't want to read how this team can't afford to keep a good player for just a million dollars and we wonder why no one want to attend games, every time you talk about getting a player someone would post we can't afford him, well it seem otherwise, if only the FO would stop stuffing their pockets we can get good players, ok, start the piling on and i know who will be first.

 

 

It's a million for the rest of the year, and then Cody is arbitration eligible, and will probably make 10 million. Is he worth that? Would you rather have Cody than sign Dan Uggla? No right? So basically we would be paying him an extra million, and then at the beginning of the season we would be right back in the same place we are now, except the games count more, and we will be determining whether or not Maybin is good enough to be our day to day guy. At least this way they play Maybin for the last month and a half, and can look around in the off season if he doesn't pan out. They only complaint I have with the FO on this one is why didn't they move him at the deadline and try to get something for him.

Additionally, the team is still competitive, even with a low payroll. Sure, we haven't made the playoffs, but we have been in the thick of the wildcard race going into a few Septembers and it really hasn't made that much of a difference in attendance. We aren't like the O's or the Pirates or The Royals who have had losing season after losing season. Loria and the FO have, for the most part, fielded teams that can win. The Marlins still need to get over the next hump and be a perennial playoff caliber team, but fans need to realize that baseball probably has the hardest postseason to get into and while settling for a .500 or above record shouldn't be the status quo, it still means more than say the Dolphins squeaking into the first round of the playoffs and getting eliminated. Exciting, winning teams don't make it to October sometimes. Is it disappointing? Yes. But that doesn't mean going to a regular season game is depressing or not fun.

 

Believe it or not, I think Loria has built somewhat of a foundation of winning here, by which I mean in the regular season. We've had more winning seasons under his reign than under Huizenga and Henry combined. That is a great first step in building longterm legitimacy. It is just a shame that some fans are "Playoffs or Bust" and won't come out until the races become tight.

this thing is a b*tch to print, anyone have it in an easier to print format? or a PDF?

 

 

I tried printing it and all I got were very light copies that were more illegible than the ones printed on deadspin. It makes it hard to keep flipping between pages and then going back to see what footnotes talks about what numbers :confused

if only the FO would stop stuffing their pockets we can get good players, ok, start the piling on and i know who will be first.

 

 

You did read the part in this thread where we determined the Marlins have been operating with negative equity, right? An investment in the red often doesn't translate into the front office "stuffing their pockets". As Marlins fans, I really think we should know that the Media will find ways to bring us down. It seems to appear that when we're winning, they'll harp on attendence and if they have a bad week they'll be left out of discussion entirely. I sincerely believe that if the ESPNs and the FOX Sports of the world keep trying their hardest to convey that the marlins are a losing and unsupported team we will continue to have trouble drawing fans to the park. Not to mention the term "firesale" seems to hover around the organization, which j imagine doesn't help attendence, either.

you're never allowed to make any money back without the media lambasting you.

 

I don't think people understand how important it was to bolster the balance sheet prior to the stadium bond sale, and even at that those bonds barely got sold. IIRC, Loria had to step up to buy the last $6 million that was unsubscribed, which was extraordinary, normally the underwriter(s) would guarantee to pick up any shortfall for their own inventory. But, that was the nasty environment that existed when the bonds were moved. So, for once, Samson is exactly right.

 

 

Overall, great analysis, ... However, I believe the bond shortfall had more to do with City of Miami and Miami Dade's finances, the way the stadium is financed w/ hotel bed taxes and the continued economic slump than the Marlins' financial picture.

After reading the Sun-senital this morning i'm very glad i cancel my season tickets this season, i know their will be folks making all kind of excuses for the owners, don't want to read how this team can't afford to keep a good player for just a million dollars and we wonder why no one want to attend games, every time you talk about getting a player someone would post we can't afford him, well it seem otherwise, if only the FO would stop stuffing their pockets we can get good players, ok, start the piling on and i know who will be first.

 

 

It's a million for the rest of the year, and then Cody is arbitration eligible, and will probably make 10 million. Is he worth that? Would you rather have Cody than sign Dan Uggla? No right? So basically we would be paying him an extra million, and then at the beginning of the season we would be right back in the same place we are now, except the games count more, and we will be determining whether or not Maybin is good enough to be our day to day guy. At least this way they play Maybin for the last month and a half, and can look around in the off season if he doesn't pan out. They only complaint I have with the FO on this one is why didn't they move him at the deadline and try to get something for him.

 

I'm not talking about Ross, didn't we let Goad go because of a different of a million, i may be wrong, the stats experts straighten that out, didn't the FO only give Oggla money after MLB and the players union expose the money their were receiving from revenue sharing, we can make all the excuses we want for the FO.

I can't help but say we've had this conversation before when the Forbes' *estimates* came out showing a similar trend: losses every year going back in 2001 and earlier followed by a huge profits recently. Many posters and bloggers ran with the latter, forgetting the former (even when they summed up to nearly 0) to characterize the ownership, franchise and market in a bad light. Now we see the real numbers, and some of the same people doing the same stupid thing. Nonetheless I'll give them credit somewhere: the market appears much worse than expected. Concessions, parking are terrible - we know that. But the amount the team relies on revenue sharing (average $s46 million a year) is huge and among the biggest source of alleviating the Marlins' poor local revenues and substantial debts. Now here's the thing: we know that's improving with the new stadium. How much though? And more local revenues means a lower ranking in revenue sharing. One will go up some, the other down by not so much so. What may not is the ridiculously low media rights contracts. The Marlins revs are very low in comparison to the Pirates

Let me preface this to say that what we have seen are audited financial statements done by a CPA firm--most likely a fairly large firm. I would bet my life on it. I say this because NO ONE would accept anything different. Not the (1) MLB, (2) creditors, (3) other partners (minority owners), (4) city, (5) county, (6) loan holders, (7) potential partners--just off the top of my head. Audited financials are done to give anyone looking at it a high degree of confidence that nothing is distorted or missing.

 

So the estimate question of bad debts and the amount would have to be accepted by the CPA firm and would have to be realistic (within a range) of what management (the

Florida Marlins) has given them. Otherwise the CPA would NOT put their stamp of approval on the financials. That is true for any number presented.

 

Now I have found a blog on the Sun-Sentinel supposedly written and reviewed by a CPA Jorge Castoles. He has compared the Forbes numbers with the deadspin number. He states the financials have been misstated for 3 items: (1) ownership payments of $10M under an account entitled Administration (which I don't find) (2) Management Fees--Related Party of $2.8M (which I do find) and (3) stadium improvements of $11M which I somewhat find. So if anybody finds any of this stuff do let me know.

 

I can't comment on (1) because I don't find it. Anywhere. In a partnership an "owner" or partner does not draw a "salary" UNLESS they actually operate the business 100% of the time. This isn't the case with the Marlins and at least Loria. I don't know the other partners so I can't comment on them. Ownership "draws" come out of the partnership equity which there isn't any.

 

(2) Management Fee - Related Party. Yes there is such a line. It could be a payment paid for services rendered to someone in (1) who is working 100% of the time in the business. It could be a brother, sister, mother, daughter, etc., spouse. I don't know about ex-spouse or ex-children (Samson). It also could be a payment to another entity which we know this partnership own the Jupiter Hammerheads. So it could be a related party through ownership. Hard to tell when you don't know who the partners are and the ownership of the other entites.

 

(3) stadium improvements of $11M which the Sun-Sentinel shows as ballpark expenses. Well, the question is which ballpark. According to the financials we see there are a couple lines listed as depreciation/amortization of intangibles and stadium improvements and other assets. This is the only number that equals $11 M. The amortization of intangibles may be the benefit of having a baseball franchise. That is, the value of the name of Florida Marlins that Huizenga/Henry "built up". Yes, we could say as fans, WHAT VALUE? But it was a viable baseball team who had one 1 WS within, what 4 years of the franchise founding???? So once you buy a going business, the "value" of Huizenga/Henry go down which we recognize as amortization (don't laugh) as the positive value of the name as the new owners, Loria's group builds. (Be careful, don't swallow your tongue.)

 

So I am not sure where this guy is coming from unless he has more information then what is shown.

 

Now the financials do say that there is a possibility that the entity will decrease in value due to the downturn in the economy which South Florida is under. This is a note to whoever is reading saying there could be a downturn. Again this is also something you only find in audited financial statements. Also on the last page it comments about subsequent events--anything that has happened prior to the printing of the financials which would significantly effect your reading of the financials. This date is February 10, 2010. AGAIN another footenote which indicates a certified audit.

 

Let me give you an example of a subsequent event. Two events have occurred in ABC Company prior to issuing the financial statements. (1) A fire in the men's bathroom e trash basket which required a repainting of the bathroom. (2) The head engineer of the research & development division left his wife, ran away with the CEO's secretary taking the new lumbumbuckeroo device worth millions and on which the patent has not been filed. Now which one is important to the financials? I assume I don't have to answer that. What happens then is the invention theft is disclosed on the financials along with the potential loss of earnings, etc.

 

 

Now Entendu mentioned about the equation Assets = Liabilities + Owners' Equity. On page 1 of the financials (shows 2 at bottom of page) the assets are $146.7M, the liabilities are $208.1M and owners' equity NEGATIVE $61.4M. OR in the equation

 

$146.7M = $208.1M - $61.4M SO the equation does balance

 

$146.7M (assets) = $146.7M which means for the Marlins the creditors (vendors, loans holders, etc. of $208.1M) are owed more than the assets are worth (at this point in time)

 

Entendu, sorry I haven't had a chance to look at the other financials. But your comment about the Pirates have more assets could be true. It could be the baseball team and the ballpark are owned by the same group. The Marlins rent a facility so some of the assets the Marlins use may be shared with the Dolphins. Like lawn equipment. The Marlins don't have their own ticket offices so that equipment most likely is shared. With the Pirates are an older franchise they probably own a lot more stuff.

 

In a partnership the taxes paid by a partner is on whatever net income is their portion from the partnership. And it doesn't necessarily have to equal the partnership interest. I know this sounds strange but it all depends on the partnership agreement and how old the partnership is.

 

I'll give you an example. OLD partnership (I can't remember when the date changed but some time since the 70's if I remember the tax law) some were family owned. Mother, father and 3 kids if I remember correctly. At that time the kids paid income tax just on their own income and not based on their parents' income tax rates. So in this partnership it was written that the mother and father only shared in the net losses and/or depreciation, and the three kids shared in the net income. An "allowable deduction"/expense were BIRTHDAY PRESENTS and COLLEGE TUITION!! Another where some partners were Canadian and some were US citizens (family members). The net losses went to the Canadian partners because the tax rates in Canada were much higher, and the net income went to the US citizens because the tax rates were lower. Obviously the IRS changed the rules. So what I'm saying I don't know what ANY of these partnership agreements say, what tax laws are governing them, etc. Unfortunately when you practice tax accounting you have to know ALL THE RULES no matter when they were enacted.

 

 

I found (3) which is ballpark related expenses of $10.66M which Jorge thought was mistated. But I don't know why he thinks they are wrong. One thing you don't know to which stadium it refers. Are we talking Sun Life or the new stadium? If it were Sun Life it is classified properly. It belongs there, but not sure what it is. Could it be cost of keeping the field or is that covered in the lease? I have to assume the presentation is fine.

 

I don't think it has to do with the new stadium because of page 8 (which shows page 9 at the bottom on the page). There is a footnote on this page regarding the new stadium and talks about FASB ASC 840 Leases. It states that for financial purposes only the partnership (the Marlins) is considered "owners" of the ballpark during the construction phase. This has to do with the Marlins' responsibility on the cost overruns. So during this building period any ballpark expenditures goe under Construction in Progress on the Balance Sheet. Then upon completion is goes to a sale-lease back treatment with city/county.

 

I really don't understand what this gentleman is speaking about. I wish he explained his objections more.

For a team in such trouble financially, we sure gave a lot of money to a very replaceable bench player this past week. Sorry, I couldn't resist.

After reading the Sun-senital this morning i'm very glad i cancel my season tickets this season, i know their will be folks making all kind of excuses for the owners, don't want to read how this team can't afford to keep a good player for just a million dollars and we wonder why no one want to attend games, every time you talk about getting a player someone would post we can't afford him, well it seem otherwise, if only the FO would stop stuffing their pockets we can get good players, ok, start the piling on and i know who will be first.

 

"Excuses" being the fact that they've spent more money than they've earned?

 

Why don''t you care about that?

I feel cheated...AGAIN..as a fan. LORIA and SAMSON lied for years about keeping the payroll low, about making money. They denied that they were saving up money to pay for their contribution to the stadium. They lied. It is what it it and it stinks. And the Cody dump, just to save a few bucks, hurts. Giving away a clubhouse leader who could mentor along our promising youngsters. Reprehensible.

For a team in such trouble financially, we sure gave a lot of money to a very replaceable bench player this past week. Sorry, I couldn't resist.

 

 

Oh you.

After reading the Sun-senital this morning i'm very glad i cancel my season tickets this season, i know their will be folks making all kind of excuses for the owners, don't want to read how this team can't afford to keep a good player for just a million dollars and we wonder why no one want to attend games, every time you talk about getting a player someone would post we can't afford him, well it seem otherwise, if only the FO would stop stuffing their pockets we can get good players, ok, start the piling on and i know who will be first.

 

"Excuses" being the fact that they've spent more money than they've earned?

 

Why don''t you care about that?

 

 

Unfortunately they are reading the articles in the newspapers and blogs and not looking at the financials. And maybe they can't read them. They are not the easiest thing to read AND if they were we wouldn't have high price lawyers and accountants, lol. Let alone government officials (IRS) :whistle

 

I believe I read the article he/she is referring to in the Sun Sentinel and speaking about the article reading 11.1M of profit when the end profit was 3.9M for 2009. The article writer did not give the Marlins credit for paying over $7M in interest expense. When you borrow money on your house do you get that money interest free? So if the fan owning a house has to be pay AND gets to deduct it on their tax returns (if they itemize), why not give the Marlins the same ability to deduct the interest and keep that in the discussion?

 

You are right, Rabb, they are getting back some of their money the partners already took out of their own pockets. Money the partners put in hoping to get a return--in $. They haven't so far. And in actuality the partners can't even take anything until the entity makes up for ALL losses. And right now that's over $61M.

This is all ridiculous. Enough blasting the Marlins for handling their business. The reason why these documents were kept secret is because of exactly what is happening right now. People who dont know enough about the subject end up talking too much.

After reading the Sun-senital this morning i'm very glad i cancel my season tickets this season, i know their will be folks making all kind of excuses for the owners, don't want to read how this team can't afford to keep a good player for just a million dollars and we wonder why no one want to attend games, every time you talk about getting a player someone would post we can't afford him, well it seem otherwise, if only the FO would stop stuffing their pockets we can get good players, ok, start the piling on and i know who will be first.

 

"Excuses" being the fact that they've spent more money than they've earned?

 

Why don''t you care about that?

 

 

Unfortunately they are reading the articles in the newspapers and blogs and not looking at the financials. And maybe they can't read them. They are not the easiest thing to read AND if they were we wouldn't have high price lawyers and accountants, lol. Let alone government officials (IRS) :whistle

 

I believe I read the article he/she is referring to in the Sun Sentinel and speaking about the article reading 11.1M of profit when the end profit was 3.9M for 2009. The article writer did not give the Marlins credit for paying over $7M in interest expense. When you borrow money on your house do you get that money interest free? So if the fan owning a house has to be pay AND gets to deduct it on their tax returns (if they itemize), why not give the Marlins the same ability to deduct the interest and keep that in the discussion?

 

You are right, Rabb, they are getting back some of their money the partners already took out of their own pockets. Money the partners put in hoping to get a return--in $. They haven't so far. And in actuality the partners can't even take anything until the entity makes up for ALL losses. And right now that's over $61M.

Yeah, I noticed that too, they aren't using the "true profit" as Biz of Baseball called it.