If Miami Marlins owner Jeffrey Loria goes against his word and sells the ballclub, the sooner the better for Miami-Dade County taxpayers.
That’s because the 2009 contract negotiated among the Marlins, the city of Miami and Miami-Dade County says the percentage of profits the governments would pocket if the team is sold is greatly reduced — and grinds to zero — over the next two years.
Profit-sharing was one of the last issues negotiated in what was widely viewed as a lopsided deal in favor of the Marlins. It was so contentious it delayed a final vote on building the ballpark by a month. The parties finally agreed that if Loria was to sell the team during the first year of the contract, starting in 2009, the county and city would split 18 percent of any profits.
If Loria was to sell the team in 2013, the city and county would split 7.5 percent of any profits. In 2014 that number lowers to 5 percent, and starting in 2015, all profits go only to the Marlins.
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Calculating exactly what that means to each stakeholder is tough because the Marlins could claim all types of costs that would lower their profit margin. But factoring the $158 million Loria paid for the team in 2002, and a Forbes Magazine estimate of the ballclub’s value last month at $450 million, if the team were to sell in 2013, the governments would split about $22 million.
Calls Wednesday to team President David Samson and spokesman P.J. Loyello were not returned. But in media interviews, the Marlins insisted they are not selling or moving the ballclub.
On Tuesday, only four months after trading former franchise cornerstone Hanley Ramirez and his remaining $40 million contract to the Los Angeles Dodgers, and dumping pitchers Anibal Sanchez and Heath Bell, the Marlins sent most of the remaining popular names on the team packing to Toronto. The series of trades will reduce payroll by more than $200 million, but Tuesday’s trades still haven’t received the required endorsement of Major League Baseball.
The purge, which sparked immediate outrage, did not come as a surprise to stadium opponents. Loria suffered the indignity this year of having the lowest attendance of any ballclub in a new stadium in more than three decades.
County Mayor Carlos Gimenez — who won his post in part by fighting the ballpark deal — speculated Wednesday that Loria could avoid splitting any profits by selling 49 percent of the team now, and the remainder in 2015 when the profit-sharing ends.
“They stopped one trade short — they need to trade owners,” Gimenez said. “I’ve never cared for this ownership group, and look, they’ve done it again. I don’t think they’ve got any credibility left.”
Miami Commissioner Marc Sarnoff said the public has lost confidence in the Marlins ownership.
“I think he’s [Loria] set up the team for a sale that would maximize his profits,” Sarnoff said. “I think everyone is looking for him to sell, and I think it’s a good day when he does.”
In an interview Wednesday with Miami Herald columnist Dan Lebatard on 790AM The Ticket, Samson wouldn’t say if the team plans to increase payroll from what is now a $16 million roster, and said the Marlins would be in Miami for “generations.’’
Neil deMause, who chronicled a one-sided stadium deal in his book Field of Schemes, said Loria may have simply decided there was more benefit to having a low payroll than chancing a high one and not winning.
Loria, in Chicago for the baseball owners meetings, spoke with CBSSports.com baseball writer Jon Heyman Wednesday about the 12-player trade the Marlins made with the Blue Jays Tuesday night.
“We finished in last place. Figure it out,’’ a defiant Loria told Heyman.
Loria also emphatically said he isn’t selling the team. “Absolutely not. That’s more stupidity.’’
Only two years ago, Loria was threatened with a spanking by MLB after using revenue sharing from the league’s wealthier teams to cover payroll for two years, and not signing players to long-term deals. Without reaching into his own pocket, Loria made the largest profit in baseball those two years. Under pressure, he soon signed Ramirez and Josh Johnson to lengthy contracts.
“The only thing I can assume is he made promises” to increase payroll if the stadium was built, author deMause said. “He tried it and it didn’t work, so he’s going back to his old model.”
County commissioner and stadium proponent Dennis Moss said he’d be disheartened if Loria simply focused on maximizing profits.
“I want the Marlins to refill their roster,” he said.
The roster changes also could set back plans for a retail and restaurant district that stadium supporters had said would revitalize the surrounding Little Havana neighborhood and fill the adjacent parking garages. A year after the Marlins opened their doors, it still hasn’t materialized.
Real estate agent Horacio Aguirre, who specializes in the area, called the idea of drawing restaurants to stadium district now “rubbish,’’ noting that already-disappointing attendance is sure to tank.
“There has been absolutely no evidence of any development caused by the stadium, and until they can bring more people into the stadium, that won’t change,’’ he said.
To many, Tuesday’s massive changes cemented fears that Loria is a carpetbagger who took the team’s reins a decade ago only looking for profit.
The initial 2009 agreement sparked controversy when the Marlins cried poor and refused to make their finances public. It was later revealed that the team had in fact made $52 million in operating income, the most in the league, in 2008 and 2009.
Citizen uproar over the matter cost several elected leaders their jobs and soured the public against the Marlins leadership.
The $634 million stadium and parking complex contract called for the Marlins to spend $120 million on construction, and allows the team to keep almost 100 percent of concession revenue. The city shelled out $119 million for six parking garages, and the county through a variety of tourist taxes spent $395 million to complete the deal.
The ballclub doesn’t pay taxes because the county owns the building. The team also agreed to pay the city between $10 and $12 each for the 5,850 parking spaces, every year. The club keeps profits made from reselling the spots at a higher price.
The Marlins pay the county $2.3 million a year in rent, though it’s using that money to pay back a $35 million loan from the county. Ballpark construction is also widely expected to come in under the $515 million budget, meaning any savings would come from the $120 million Loria is responsible for spending. That won’t be known for certain until next year.
The contract also stipulates that if Loria were to sell the team, any new owner would be bound to the conditions in the contract.