Thoughts on Florida Marlins management

I have 2 problems with the Marlins management.

The 1st is that they are taking monies clearly intended for player salaries [“improve onfield performance” says the CBA] and using it for other purposes [stadium]. But they are not the only team doing it [just the most consistently blatant] and MLB and the Players Union are complicit in that abuse, since until this week, no team had ever been publicly called out on that strategy, other than occasional grumblings by some of the more aggrieved owners who realized they were unintended sugar daddies [Hank Steinbrenner & John Henry].

But even if the Marlins were ‘allowed’ to break the spirit of the CBA on revenue sharing, given certain MLB political and financial intrigue, it’s still wrong, especially to a fan base which has been told that the Marlins couldn’t afford to spend more.

That’s my 2nd problem. The Marlins, as well as most MLB franchises, are intentionally misleading about their finances. So while I believe that being intentionally misleading is part of David Samson’s job description, not some character flaw, it still does not change the fact that he states things which are not true. Loria’s & Samson’s problems are that the Marlins finances are among the least complicated in MLB, since they do not own a Regional Sports Network [RSN].

When teams have RSN’s — most of the big market teams have them, i.e. Yankees and Yes Network — then what they are earning in local revenues from cable rights can be manipulated since they can set the rates to be the most advantageous for each of the companies who share the same owner.

On a yearly basis Forbes gives us a pretty good idea of what MLB [actually they do the same for all major sports] teams are earning and their estimated worth. In the case of teams with no RSN’s, Forbes basically gives us an excellent idea, because the numbers they put out are more straightforward. What I have done with the Forbes numbers is to fill in some of the detail blanks to show it as a Profit & Loss financial statement.

The public slap down of the Marlins spending also serves as an official confirmation that Forbes estimates of the Marlins operating profits since 2006 are accurate. Below are Forbes operating profits and my estimates [which tie into the Forbes numbers] of revenue sharing [RS] the Marlins have received:

2006 – $43 operating profits / received $38 in RS
2007 – $36 operating profits / received $35 in RS
2008 – $44 operating profits / received $38 in RS

The revenue sharing system intended that low revenue teams like the Marlins could compete with higher revenue teams. The Marlins deserve to be called out for keeping that money [$111 over the past 3 years] and then attempting to mislead others that they did not.

To be fair, if the Marlins had not secured a stadium deal, then those $111 would have remained in their pockets, instead of going towards the stadium. The Marlins without a new stadium could have probably gotten MLB to agree to relocating them. After all, Loria already has experience in running down a franchise and forcing MLB into a relocation. see Montreal Expos.

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A tale of two piggies

It was the best of [MLB] crimes [profitable],
it was the worst of [MLB] crimes [dishonorable]

I was hoping that my headline could read, “pigs get fat, hogs get slaughtered.” But as you will soon read, the hogs assault on their fans and free-agency eligible players will continue, largely unabated.

Gather round children, let us tell a tale of greed. Not the type of greed which serves a role in a capitalist society, but the sort of greed which prospers lecherously on the backs of others, greed of TARP-esque dimensions. The piggies / hogs I refer to are the owner and the financial face of the Florida Marlins franchise, Jeffrey Loria and David Samson.

As described in Juan C. Rodriguez’s Sun-Sentinel blog, yesterday the the MLB Commissioner’s Office and the MLB Players Association issued a statement which read in part:

In response to our concerns that revenue sharing proceeds have not been used as required, the Marlins have assured the Union and the Commissioner’s Office that they plan to use such proceeds to increase player payroll annually as they move toward the opening of their new ballpark.

Given that they were dealing with a franchise which redefined “improve its performance on the field” to mean that revenue sharing monies could be used to pay for their portion of the new stadium costs, I was disappointed at the weak language — “increase player payroll annually” — used in the agreement.

If spending one dollar more in player payroll in each of the successive seasons would seem to put them in compliance with that language, then it is hard to see how effective this agreement could realistically be. It is puzzling why the terms could not have been more defined. After all, this franchise probably could have doubled their 2009 team payroll of $36 million and still shown operating profits. They certainly could have done that [doubled salaries and still show operating profits] in each year since 2006. Someone please just look at the numbers below. The numbers are based on the Forbes reporting which are disputed only by those who stand to be embarrassed by their accuracy — read here and here.

How To Understand What The Florida
Marlins Have Done Since 2006

Pretend that a generous neighbor on your block gave you $10,000 yearly to “improve the look” of your home because he had a vested interest in having the neighborhood look better. Imagine further that you turned around used the money to pay down the principal on your mortgage instead of fixing up your property. Could you convince that neighbor that his monies didn’t go into your pocket? Could you make the case that the property looks better when it carries less debt? If you could, you are ready to be an executive for the Florida Marlins.

Replace the term “improve the look” with “improve its performance on the field” and you have the equivalent of what the Florida Marlins have done to those teams which are net revenue sharing payers [Yankees, Red Sox, Mets, Cubs etc].

If you were that generous neighbor and suspected that your monies were being misused for four years and finally confronted your abusively free-loading neighbor and the best you could negotiate was that the abusively free-loading neighbor would be gradually less abusive over the next three years, well then you are destined for greatness as a negotiator in the world of MLB finances.

Somewhere in a cell at the Federal Correctional Complex in Butner, N.C., a fella named Madoff is reading about the Marlins and wondering, where’s the outrage?

I supported the new stadium, not because I wished to further enrich this management crowd, but because I thought it was necessary for my city to have a MLB future. A future which at some point practically all local fans hope does not include Jeffrey Loria, an owner who is as welcome in South Florida as Art Model is in Cleveland. This wrist slap by MLB is a disappointment. Who knew that Loria and Samson, like the Rosato brothers, would end up being protected by both sides in this revenue sharing drama. The only consolation is that the protection for the Rosato brothers proved to be only temporary.

Below is a Profit and Loss financial statement I have put together for the Florida Marlins since 2002 using Forbes Business of Baseball figures.

Please click on image below to enlarge or print.

It is a far, far better thing that they can do, than they have ever done; if they would only please sell the team.

The Juan Rodriguez blog post referenced is copied in full at end of post.

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Florida Marlins: Low payrolls prompt Players Association to take action

Posted by Juan C. Rodriguez on January 12, 2010

The Florida Marlins ranked last or second-to-last four consecutive seasons in final payroll. That did not go unnoticed in the Commissioner’s Office or with the Players Association.

In a joint statement released Tuesday, the Players Association said it had concerns the Marlins were not in compliance with Article XXIV (B)(5)(a) of the Collective Bargaining Agreement. That provision states:

“A principal objective of the Revenue Sharing Plan is to promote the growth of the Game and the industry on an individual Club and on an aggregate basis. Accordingly, each Club shall use its revenue sharing receipts (from the Base Plan, the Central Fund Component and the Commissioner’s Discretionary Fund) in an effort to improve its performance on the field. Each Payee Club, no later than April 1, shall report on the performance-related uses to which it put its revenue sharing receipts in the preceding Revenue Sharing Year. Consistent with his authority under the Major League Constitution, the Commissioner may impose penalties on any Club that violates this obligation.”

The Marlins were one of “several clubs” Major League Baseball and the Players Association discussed. Here are the statements each of the sides made subsequent “extensive discussions”:

MLBPA Executive Directior Michael Weiner: “In response to our concerns that revenue sharing proceeds have not been used as required, the Marlins have assured the Union and the Commissioner’s Office that they plan to use such proceeds to increase player payroll annually as they move toward the opening of their new ballpark. Today’s agreement, which covers the period 2010 through 2012, calls for ongoing communication among the Marlins, the Commissioner’s Office and the Union as the Marlins proceed with that plan. It also permits, after consultation among all parties, adjustments in the Marlins’ plan to respond to unforeseen developments, and calls for arbitral intervention if disagreements arise. We greatly appreciate the willingness of the Commissioner’s Office and the Marlins to engage with us and ensure that all terms of the Basic Agreement are met.”

Marlins’ President David Samson said: “The Marlins have consistently made every effort to put the best product on the field and our record supports the fact that we have been successful in that regard. Throughout the discussions, the Marlins maintained that there had been no violation of the Basic Agreement at any time. While we know that the Marlins will always comply with the Basic Agreement, we were happy to work cooperatively with the Union and the Commissioner’s Office on this matter.”

MLB Executive Vice President, Labor Relations Rob Manfred added: “The Basic Agreement contains confidentiality provisions that preclude the parties from publicly discussing the specifics of the Marlins’ finances. There will, therefore, be no comment by any of these parties on any further specifics of this agreement. All three parties agree that the Basic Agreement provision on the proper use of revenue sharing dollars is an important part of our agreement. Today’s announcement is the product of a positive dialogue between the MLBPA, the Commissioner’s Office and the Club.”

Bottom line: Looks like the Marlins payroll will increase incrementally leading up to the opening of their new ballpark in 2012, perhaps by greater leaps and bounds than they planned.
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