Marlins owner assesses state of franchise, why key revenue boost is coming very soon
Former Florida Marlins ownership bemoaned years of financial losses, until that — combined with years of losing on the field, too — ultimately motivated Jeffrey Loria to sell.
But as he begins his fourth season as the Marlins majority owner and control person, Bruce Sherman made clear on Monday that he’s not deterred — or thinking at all about selling — despite the economic toll of COVID and what had been baseball’s worst TV deal combined with low Marlins Park attendance during his first two years of ownership before last season was played without any fans.
Instead Sherman sees hope on the horizon — a talent-rich system considered among the best in baseball, a team coming off a playoff berth, and what he expects will be something of a windfall in new TV money.
Sherman, speaking to reporters for the first time in a year, confirmed our report that the Marlins are closing in on a new TV deal with Sinclair-owned Fox Sports Florida, one that would replace a longterm contract struck under previous team ownership that paid the Marlins about $20 million annually for rights. That deal, which ended last October, was the worst TV deal in baseball.
Asked if he expects the new deal will more than double the team’s annual rights fee, Sherman said: “I wouldn’t be satisfied at that level. We’re excited to be competitive with the other teams. We’re in a very good market in terms of population.”
The Kansas City Royals’ new TV deal — the most recent one struck by Sinclair — reportedly pays the team $50 million annually.
Market size is a significant factor for Sinclair in determining rights fees for teams, but far from the only one.
The Miami-Fort Lauderdale market is the 18th biggest market, as far as number of TV households, per Nielsen’s 2021 market report. Tampa-St. Petersburg is 13th. Kansas City is 34th.
So the Marlins, in theory, should be getting far more than the Royals’ $50 million annual rights fee and not enormously less than Tampa Bay’s $80 million to $82 million, which is what the Rays’ deal is worth (including an equity component), according to two sources.
But those Rays and Royals deals were struck before the pandemic, a factor that cannot be overlooked because COVID-19 is impacting baseball and television economics.
The boost in TV money is critical, because it would allow the Marlins to afford a higher player payroll.
“We’re very pleased where we are,” Sherman said of the TV negotiations, three days before pitchers and catchers report. “We’re in a good spot. The documents take a long time. We’re excited about all our fans will see the Marlins on TV this year, at the right time and the right place. We’re excited about the partnership. There will be a renaming of the network [Bally Sports Florida].”
Joined by his CEO Derek Jeter, Sherman addressed other issues in a Zoom session with reporters:
▪ Asked if ever asks himself why he needs the aggravation of losing money as an owner of a low-revenue team during a pandemic and if he ever thinks about whether he should sell the team, Sherman said: “Not for a moment. The industry lost $3 billion last year. We shared in those losses like everybody else. This year is going to be challenging through the pandemic.
“I love baseball. I love the organization we’re trying to build. I love winning and I think we’re on the right path. We have to continue on the path. The economics, especially with the pandemic, I’ve been disappointed. But we’re very excited about the future both operationally and financially.”
▪ On the impact of COVID-19 on baseball, which limited last season to 60 games (instead of 162) and resulted in a regular season with no fans at any games:
“The pandemic impacted last year. It will impact this year,” Sherman said, with the team planning to open the season with attendance capped at about 20 percent (7000-8000).
“None of us know what the new normal is going to be. But all industries have suffered from this problem. We believe in everything we’ve done, from the changes we’ve made in the stadium to what we’ve done in the farm system to the success we had last year.
“If you look at the growth of the population, with the flood of people moving to Florida, we would like to capture our share of them as baseball fans. Our plan is intact. It is just going to take some time. The pandemic did cost us a lot of fan involvement.
“The key is to stick to the plan, try to create more fan interest and put a great product on the field both entertainment wise and baseball wise and continue to grow… Everybody in our investment group understands that.”
Sherman wondered what “it would have been like to have some of those [Marlins 2020] playoff games in Miami. It would have been a lot of fun…. It was strange watching it from a box 200 feet from the field [as an owner].”
▪ Sherman said fans will have “a truly extraordinary fan experience when you come to Marlins Park. I’ve been to many parks and it’s a superior experience than you get in a lot of other arenas, stadiums, etc.We have to engage people to give it a shot.”
▪ On the roster: “We think we’ll be even better this year. We’ve added a big bat in Adam Duvall just recently. And it will continue to be a competition in spring training for the 26-man roster. The 40-man roster is pretty much set.”
▪ There were at least four published reports in 2017 that Texas billionaire Michael Dell (through his MSD Partners investment firm) contributed $175 million in preferred stock to help finance Sherman’s $1.2 billion acquisition of the team, and that the team (Sherman, primarily) must pay back the entire $175 million — with 14 percent interest — within three years or that Dell instead would be given equity in the franchise.
Asked if that deadline has passed and whether Dell has been repaid or instead received greater equity in the franchise, Sherman said: “the Dell organization is an investor just like our entire ownership group, nowhere near the levels you’re talking at. There are no issues with paying him. This is a strong ownership group starting at the top right through every owner.
“There’s no deadline. He’s an investor now and he’s receiving whatever he’s supposed to receive. It’s a much smaller element of the total capital structure than you mentioned.”
▪ Sherman said he moved to South Florida this year; he previously lived in the Naples area.
This story was originally published February 15, 2021 at 2:48 PM.
