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Sherman/Jeter seeking investors, $250 million


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https://www.fanragsports.com/heyman-marlins-seeking-investors-with-project-citrus/

 

 

 

The Miami Marlins’ new ownership group, led by iconic Yankees shortstop Derek Jeter and Florida businessman Bruce Sherman, within two months of closing on the $1.2 billion deal to buy the team, has launched a campaign to add significant dollars to its coffers.

 

An email, with the title “Project Citrus,” and a November 2017 date, trumpets the opportunity to invest in “The Miami Marlins Major League Baseball Club.” (The document is marked as “confidential” but was obtained by FanRag Sports — see below).

 

Two people who have seen related emails suggest the Marlins are expressing a hope to raise $250 million from the additional investors it seeks, though that figure isn’t contained in this document and is unconfirmed. The Marlins organization declined comment through a spokesman on the offering, and also on the targeted amount.

 

The new group, with Jeter as the CEO and de factor managing partner, obviously had the money to close the deal and win the team, and MLB people have expressed that they are quite comfortable with the group’s major players and its financial situation. But, as it came so soon into the new ownership’s tenure, the offering did raise some eyebrows among those who received it, with some wondering about the group’s financial state – but, the belief for now is that the Marlins are merely looking to expand their current group and perhaps defray the outlay of some partners, who may feel a bit stretched to meet previous owner Jeffrey Loria’s asking price.

 

Some who’ve seen the “teaser” (or preview) email – which makes a nice pitch for the potential of the team but also points out “mistakes” of the previous regime, including former manager Ozzie Guillen’s famous rhetorical faux pas – also wonder if the new ownership group is concerned about the need for a cushion to guard against future near-term losses, and are merely playing it safe. Jeter’s group, which won the team by being the one to meet Loria’s price (groups led by Wayne Rothbaum and Jorge Mas, two very wealthy businessmen, did not, and were especially leery of the price after seeing all the books), took several months before raising the money to meet the agreed-upon price.

 

MLB commissioner Rob Manfred has had only praise for the new group and has expressed no concerns publicly. Asked what he thought about the sale at them at the recent ownership meeting in Orlando, Manfred said he was pleased by two things: the price and the makeup of the new group. MLB was thrilled to add Jeter, who has a pristine reputation in addition to his Hall of Fame career, and Sherman, who is always cited as successful and pleasant man who consistently gushes about how thrilled he is about the “dream come true” opportunity.

 

Though some suggest it is highly unusual for a new group to seek significant monies so soon after closing, it may turn out to be a prudent thing to do considering the new group contains no known Steve Ballmer-types (the new Clippers owner reputed to be worth $25 billion), and also considering the Marlins’ stated loss of upwards of $60 million this year, and expected near-term losses in coming years. Sherman, the main investor, is believed to have committed close to $400 million of his own money, and while he obviously can afford it (since the sale closed), new deep-pocketed investors may also make things more comfortable.

 

Sherman obviously is fabulously wealthy, but others around the game were originally surprised he could come up with the $400M since he doesn’t show up on some national billionaire lists – though of course, those lists are often notoriously guess-driven and Sherman may be a lot richer than the makers of those lists think. Jeter was reported by FanRag to have put in about $25 million of his own money, and he is believed to be a four-percent partner.

 

To meet Loria’s asking price, the new group is financing about one-third of the purchase price, and also has a “preferred equity” piece, provided by Michael Dell, for around $100 million (though other, earlier reports indicated that number was nearly twice that amount) that needs to be repaid. It’s possible the new group could be aiming to do that sooner rather than later.

 

The previous ownership group led by Loria ran up the player payroll to about $115 million, well north of what is supported by the current revenues, which are near the bottom in MLB, and the new ownership is believed interested in cutting the payroll into the $85-to-$90 million range. That isn’t shocking since no one wants to lose $60 million annually, but it will be no small task considering “natural” raises for players with increasing contracts and arbitration raises to come might bring the payroll to $130 million, or more, if they did nothing.

 

 

 

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I'm not really seeing why this is a big deal. MLB has (I hope) learned its lesson from the Frank McCourt saga and I have to think they would not have approved this sale if Jeter and Co did not have the money. Considering the Marlins are going to have future financial issues for some time, it makes sense that they would try and get additional investors.

 

 

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I'm not really seeing why this is a big deal. MLB has (I hope) learned its lesson from the Frank McCourt saga and I have to think they would not have approved this sale if Jeter and Co did not have the money. Considering the Marlins are going to have future financial issues for some time, it makes sense that they would try and get additional investors.

 

Yeah, this part of the story doesn't seem like a huge deal. When the sale was announced, Manfred was even asked about the group wanting to add more investors and did not have an issue with it.  

 

 

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Just seems like they aren't as wealthy as they need to be

 

Yea this. It's unsettling.

 

Had trouble coming up with investors to make the purchase... just barely gets enough to be approved for the purchase... says payroll needs to be slashed because there isn't enough revenue coming in... then immediately starts asking for even more investors? Not a pleasant feeling for us. 

 

 

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I'm not really seeing why this is a big deal. MLB has (I hope) learned its lesson from the Frank McCourt saga and I have to think they would not have approved this sale if Jeter and Co did not have the money. Considering the Marlins are going to have future financial issues for some time, it makes sense that they would try and get additional investors.

 

It's being made a big deal by people who are pissed at the imminent rebuild.  I'm not thrilled about losing certain players, but we can buy a farm system.  We have to build it.

 

Looking for additional money is not a big deal at all.  Sherman can go get as many investors as he'd like, and I would encourage him to, as long as he doesn't drop below 51%.  More money, if done properly, can easily mean a faster rebuild.

 

 

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Yea this. It's unsettling.

 

Had trouble coming up with investors to make the purchase... just barely gets enough to be approved for the purchase... says payroll needs to be slashed because there isn't enough revenue coming in... then immediately starts asking for even more investors? Not a pleasant feeling for us. 

 

Seems like this franchise is doomed to be the "red-headed step-child" of MLB. 

 

 

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