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Marlins One of 3 MLB Teams To Drop In Valuation


DcFishFan
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http://www.sun-sentinel.com/sports/miami-marlins/marlins-blog/sfl-miami-marlins-forbes-blog-20140327,0,2134588.story?obref=obinsite

 

"At $159 million (down from $195 million), the Marlins had the lowest revenue of any franchise and were one of six teams to lose at at least $8 million last season. "

 

If no one shows up for the games maybe Loria will lose enough money and sell. Discuss.

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So, he dropped 8 mill (if Forbes is right about EBITDA) in '13 on top of about 60 mill (which nobody has disputed) in '12.

 

Which explains why payroll this year is still so minimal despite 1) the extra 24 mill (estimated) from the new MLB TV deal, and 2) being rid of much of the cost of dumping the '12 fiasco.

 

At 500 mill (if Forbes is right about value) the M-D county sale-penalty for this year and the next 3 years is only 5% of 250 mill, a paltry 12.5 mill.

 

DCFish, you might be right. If attendance sucks again, facing age 74 he may say "Who needs this?" With crap attendance and the always-rising costs of everything except payroll and maybe another operating loss this year, not to mention that most or all of the Dobbs, Furcal, Baker, Marmol, Jones and Mcgehee signings may turn out be failures -- that bunch adds up to about 11 mill -- which would probably mean another 90+ loss season, why bother?

 

If there's another operating loss this year, the franchise value probably takes another hit, who needs that?

 

He may decide that it's not worth waiting until age 77 to avoid the minor 12.5 mill penalty, especially since they seem to blow that much or more just about every year and every year they don't win is probably another small whack out of franchise value -- the only way he ever really cashes in.

 

If I had 500 mill of capital tied up in the Marlins, which should be earning at least 10% -- 50 mill -- per year of current cash income like clockwork, I wouldn't be able to sign on the dotted line fast enough. I don't have 500 mill, but the not insignificant sum I do have did 10% last year and the results could have been easily duplicated on Loria-type money. Baseball team? I don't wanna own any stinking baseball team. All of your eggs in one basket? No thanks.

 

The year-to-year operating returns in baseball are bad enough without going backwards. The total '13 EBITDA earnings of the 30 MLB teams on about 33 billion in assets were (according to Forbes) about 300 million. That's about 1%. That absolutely stinks. The saving grace is that average franchise value usually increases, last year by about 7.7%. Add that to EBITDA and you're at 8.7%, give or take. Not bad at all.

 

But Loria didn't participate in any of that last year -- he lost 8 mill operating and another 20-25 mill in franchise value. On top of the 60 mill operating hit the previous year.

 

So, there's hope. Thank your lucky stars he's not 50.

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Here's another reason he might or might not want to sell, the details of which are a complete unknown to us.

 

It all depends on how many lawyers have been beavering away at estate and/or sale planning, if any, but I'll guess probably a lot and probably for years.

 

While a sale transaction can probably be structured to minimize and defer income taxes, the absolute worst case is 20% of the gain of 330 mill (500-158 cost-12 to M-D.) The income tax would be about 66 mill. Not a problem if it's an all-cash deal -- you have 487+ mill of proceeds. You're left with 422+ mill. The problem arises upon death. Then the estate gets whacked for another 40% tax if those assets are still held. That's another 169 mill, total 235 mill of tax. Plus 12 mill to M-D. Total 247 mill. Net 253 mill.

 

If the interest passes only by way of his estate, the tax rate is going to be 40%. That's 200 mill the estate has to pay. Absent planning, that would probably force a sale, the estate not having 200 mill in cash laying around or the ability to borrow it. But, the net is 300 mill, which is better than 253 mill. 47 mill better.

 

What we don't know is how a succession or sale has been planned. Tons of life insurance (as in about 200 mill or close to it) would mean no sale is necessary on death. Any inheritor (Samson?) would acquire the asset at the stepped-up basis of the value at death and owe no capital gains tax on any appreciation to that point, estate taxes having been paid. Or, part or all of the asset may already have long ago been placed in an irrevocable trust (beneficiary[ies] unknown) that takes it out of the estate entirely. That sort of thing is not public information. Or. And. And/or. The possibilities are endless.

 

We simply have no idea what has been planned or put in place.

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I know this isn't him but I thought this was funny....

 

Gov. Chris Christie of New Jersey announced on Friday that the chairman of the Port Authority of New York and New Jersey, David Samson, has resigned, the latest fallout from the scandal surrounding the closure of several traffic lanes on the George Washington Bridge. Mr. Christie said he had disc...

 

http://www.nytimes.com/2014/03/29/nyregion/christie-press-conference-on-bridge-scandal.html

 

Sent via Flipboard

 

 

 

 

 

 

Sent from my SGH-M919 using Tapatalk

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