[freedomtowernight_edited.jpg] 26th Parallel: Florida Marlins Do It Again

Thursday, December 06, 2007

Florida Marlins Do It Again

A shrug and a sigh.

That was my reaction to the Florida Marlins - Detroit Tigers trade involving the last 2 remaining members of the 2003 championship team. A trade involving Miguel Cabrera and Dontrelle Willis has been rumored and discussed for a while, and considering the track record of the Marlins franchise and their propensity to sell off their star players, this was hardly surprising. This partially explains my reaction.

My reaction is a byproduct of being a Marlins season ticket holder and fan since the start (1993) and experiencing both the joys of their two World Series titles in 6 years (exactly the same number of titles the Red Sox have captured in the past few years), and the almost immediate sadness of key players being traded away.

As the Sun-Sentinel's Dave Hyde succinctly put it:
I can't even work up a good anger anymore. I can't type venom, or talk nasty or muster even an ounce of ugliness other than to ask in a weary tone: When does this ever end with the Marlins?
When loyal fans merely shrug their shoulders and sigh at the news of a blockbuster trade, there is something wrong with the organization. People can make fun of the Marlins' low attendance all they want, but the latest in a string of loyalty-crushing blows delivered by the Jeffrey Loria/David Samson team justifies every single key reason why ex, current and potential Marlins fans stay away from the stadium in large numbers.

To put it simply, the loyalty shown by hard-core Marlins fans (among the best fans in sports for all we put up with) is not returned by the people who depend on the fans the most: the owner and president of the franchise. After a while, even the most loyal get fed up and say "the hell with them".

By the way, Henry Gomez posted a five-part series analyzing the Marlins' fan base and that of the other Miami-area sports teams here. It is an excellent, number-crunching analysis that only Henry can deliver, and helps to dispel some widely-held myths regarding South Florida sports fans. I strongly recommend checking out the series.

More from Dave Hyde regarding "poor boys" Loria and Samson:
But if this were about improving it would be one issue. This is about money, only money, though not in the way you think. The Marlins could afford Cabrera and Willis with no problem. Of course they could, no matter what the perception is.

This has been said before but needs to be shouted on days like today. This franchise makes bundles of money. It turns a wonderful profit. Take out the calculator and add up what they got last year:

$30 million. That's in revenue sharing.

$12 million. That's an estimated local TV deal, according to a source.

$18 million. That's from the national TV deal.

That's $60 million right there. That's before they sell a ticket, sign up a corporation or cash one of the increasingly lucrative checks from the merchandising arm of Major League Baseball. That's against a $32 million payroll last year that could dwindle to about half that this year.

Oh, right. There's the cost of running a minor league system. Please. If Loria and Samson wanted to take that saved $20 million this season and put it toward the new stadium fund, fine. Who wouldn't be for it if they followed through with that idea?
About the stadium, the deal is, what, $30-60 million short? Do the math. It's obvious that Loria and Samson would rather pocket their profits than using part of it to help fill the funding gap for the new stadium, one that will make them and their descendants rich for generations. But no, they are carpetbaggers of the first degree. As Jim Mandich stated on the radio yesterday, Marlins ownership has no equity built in South Florida. In other words, they have no roots here, nor do they care about setting down any (unless the price is right, of course). South Florida fans are savvy and smart enough to realize this. Montreal baseball fans know too, but they learned the hard way: Loria and Samson raped them for several years as part of the Montreal Expos before leaving town for Washington.

Still believe Jeffrey Loria can't afford the money? Take a look here (courtesy of SporTech Matter):
Reached by phone, Jeffrey Loria, who according to Yale also donated $20 million, said he made the gift because "I'm a [Yale] graduate, and I could afford it, and it's time to give back to the university." Mr. Loria is an art dealer, as well as the owner of the Florida Marlins, and over the years he has given several works of art to Yale.
If he wants to give back to his alma mater, that's great and I respect that. But if he can plunk down $20 million for an institution he cares about, don't you think he could do the same for the baseball team he owns and stands to make a killing on some day?

A
fter you answer this question with the obvious, the next question which should immediately pop into your head is:

Still wondering why an area rich with baseball fans can't draw?

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7 Comments:

Blogger Henry Gomez said...

Several things to dispute here. First of all is the revenue numbers. Just because in a given year you make X amount of money doesn't mean you make that every year. For a small market team like the Marlins they might spend a large sum of money on players every few years (remember they signed Pudge for $10 Million and re-signed Lowell for $10 Million a year) when they are close to contention. During those years money is lost. Then you have the cost cutting cycle where money comes in. In other words teams like the Marlins can't afford to have high fixed and escalating payrolls.

Secondly in addition to all the of the costs associated with the big club there are a lot of costs of maintaining the minor league system.

Also if the Marlins are putting away some extra money to have for the day that hopefully a stadium gets built (remember they committed close to $200 Million for it) I applaud that. It's called saving for a future capital expense.

And lastly those donations made to Universities are never made in a lump sum. They are announce as $20 million but I wouldn't be surprised if it was simply a commitment for $20 million over the next 20 years. A million a year is not going to allow you to keep Cabrera or Willis. Remember we got Cabrera and Willis by trading away other players that people said we couldn't live without.

As much as we'd like it to be like it was when we were growing up where players don't move, those good old days aren't coming back. Fans need to have allegiance to the team not the players otherwise they are bound to always be disappointed.

12:34 PM, December 07, 2007  
Blogger Robert said...

Henry,

I'm not a financial expert, but I do understand the concept of making a profit for future expenses, as you well stated.

However, I don't buy the argument that these guys don't really have the money to keep at least a core group of players for more than just 2-4 years. Remember, they spent $10+ million on I-Rod back in 2003 and again on Carlos Delgado in 2005. In other words, they have been able to come up with the money in the past. Just as payments to universities are spread out, so are payments for players AND stadium deals. It's great that they've committed $200 million for the stadium. They need to plunk down the extra $30 million and "get the damned thing done", as Loria himself implored a couple of years ago. They can afford it, and you and I both know who stands to make a killing out of the stadium deal in the long run.

I understand that these aren't the good ol' days when players played on the same team for 10 years or more. I'm not asking for that. Perhaps I'm too idealistic, but if there's one thing I value as much, if not more, than anything it's loyalty and authenticity. In the end that's really what this is about. Where is Loria's loyalty to the Marlins fans? Where is his loyalty to this community. As Mandich so eloquently stated the other day on the radio, where's the equity built to the community that helps fill his pockets?

This franchise has had the terrible history of breaking teams up just when it appears that they might have something lasting. I also understand the economics of baseball, but if small-market teams such as Oakland and Minnesota can keep core players for several years (longer than the Marlins), then the Marlins can too.

Sure, they probably got half of the 2010 All-Star team in this trade, but they'll end up being gone in a few years anyway, just like Dontrelle and Cabrera. At some point, Marlins management must make a solid commitment to field the best team possible EVERY year. Most fans realize the economics, but reasonable people get irritated when you trade away your most popular players every other year and feed someone else's success. Like I said in my post, South Florida baseball fans can smell a rat a mile away, and we have one which comfortably resides at Dolphins Stadium. Loyalty and allegiance to a team is earned by owners showing a true commitment to the local community. No one can tell me that Loria has done that. Just ask the people in Montreal.

The 2003 World Series championship was the perfect opportunity for the Marlins to finally build a team that fans could identify with for a good 5-7 years. What happened? That team evaporated completely in less than 4 years. You pick your core players you want to build around, and move on. Who makes up the Marlins' core now? Hanley? Dan Uggla? They'll be gone in 2-3 years flat. Any wonder people don't go to the games?

I'm sorry, but I have lost almost all respect for Jeffrey Loria and David Samson. IMO, they lack integrity. As the administrator for my office's season ticket pool, it sickens me that I have already committed to 2008.

3:59 PM, December 07, 2007  
Blogger Henry Gomez said...

I'm going to answer you completely when i have the time. i think you'll see what i'm saying.

10:35 PM, December 11, 2007  
Blogger Henry Gomez said...

Here you go. Hopefully you'll read the whole boring thing:

The Pudge contract was $10 million for one year and the money was paid over 3 years. I remember at the time people criticized the Marlins saying it was stupid to spend so much on one player for one year when the team couldn’t afford it and they weren’t close to contending. As it turns out those people couldn’t have been more wrong. Since it was a one year deal Pudge was a free agent who significantly raised his market value the Marlins truly couldn’t afford him in 2004.

After winning the world series in 2003 the Marlins moved D. Lee to get Hee Seop Choi. Lee had been a great defensive player for the Marlins but never the clutch hitter he would become within the friendly confines of Wrigley. Choi was a bust so the Marlins sought to fill that hole with Delgado who was a free agent.

You have to be fair to the Marlins, they tried to keep as much of the team together as they could for 2004 and 2005, even getting Delgado. They did much more than what the club did after it won it all in 1997. By opening day 1998 the whole 97 team was gone.

You can’t blame Loria for what Huizenga and John Henry did. He’s not responsible for that history. Loria has proven that he wants to win and will spend money when it looks like the club is close.

By the way when the Marlins traded Delgado to the mets they got their current starting first baseman, Mike Jacobs.

I think the transactions above show that players today are like stocks. You have to buy low and sell high. And just like stocks you can’t fall in love with them, or buy and hold. Especially if you are a small market team.

Another thing you need to consider is the way MLB contracts and the collective bargaining agreement work. The rules are complicated but generally a team owns a players rights for the first few years of his major league career. After a couple of years the player is eligible for arbitration which means they go to an arbitrator with an amount they want to be paid for one season and the team gives a number it’s willing to pay. Both sides make their case to the arbitrator based on the player’s stats and what similar players in the majors are paid and the arbitrator declares a winner. The winner gets/pays the salary they proposed. No negotiating or compromise. But since teams can take players to arbitration for about three years it’s a way for them to avoid signing long term deals that decrease payroll flexibility and that can bite them in the ass. You never want to get to the last year of a player’s arbitration eligibility because then he becomes a free agent and if he leaves you get nothing for him. So a star like Miguel Cabrera becomes a very valuable stock.

You mentioned that player salaries are spread out over years like those donations to universities. But that’s not a good a comparison. A player like Delgado got a 4-year/$52 million contract and Lowell got a 4-year $10 million contract. If those players had been on the roster last year we would have been paying $22 million in one season for two positions. Now look at what their replacements (Mike Jacobs and Miguel Cabrera) did and you have to ask whether the incremental salary that Lowell and Delgado would have earned would have been worth it. My guess is that with the pitching injuries we had they would not have made that much of a difference in terms of wins and losses.

I don’t think the team will make a killing in the new stadium. I think they will be able to compete at a level closer to the average club. Remember this “sweetheart dea" is a deal that most clubs the Marlins compete with already have.

You talk about loyalty. But the way Loria can show his loyalty to the fans is to win. If in 3 years they win the pennant or the World Series again does that not show that he is loyal, even if it is with a completely different cast of players?

You mention small market clubs like Oakland and Minnesota, but those are bad examples. Where is Barry Zito today? Where is Tim Hudson today? Where is Jason Giambi today? Where is Miguel Tejada? All have been traded away by the A’s. Hudson only played one more season with the A’s than Dontrelle pitched with the Marlins. Johan Santana, ace of the twins and the best pitcher in baseball is on the trading block. Buy low and sell high.

I also want to show you a few things about revenues as I mentioned in my earlier comment.

According to Forbes that has been tracking baseball revenues by team for a few years the EBITDA for 2007 was $43.3 Million

Link

In 2006 the number was -$11.6 million

Link


In 2005 the number was $3 million

Link

In 2004 the number -$11.6 million

Link

As you can see, the operating income of the team fluctuates wildly. When you total up those last 4 years you see a net of $23.1 Million or $5.77 Million per year. That won’t cover half of Miguel’s annual contract when he becomes a free agent.

I wish the situation were different too. But until the Marlins get a stadium and/or there is a more equitable revenue sharing scheme in MLB our team will be a day trader in a world ruled by big institutional brokers.

I strongly recommend the book "Moneyball". It's very entertaining and sheds light on how the whole players as stocks thing works.

12:39 AM, December 12, 2007  
Blogger Robert said...

Henry,

You made some good points. I understand the general concept of baseball economics, but I think the issue with the Marlins, which is as much reality as perception, is that the franchise has gone through wild fluctuations in success. How many baseball teams go from WS champs to worst team in baseball in a year, then rise back up to the top only to go back down a few years later? The Oakland A's and Minnesota Twins, the teams I mentioned, have each done consistently very well since 1999 (have made the playoffs 5 and 4 times each respectively, and finished no worst than 2nd between
1999-2006. The A's lost a lot of good players during that time as you mentioned, but they also kept Barry Zito for 7 years and still have Eric Chavez (nine years). Minnesota had Torii Hunter for 9 years and Santana is at 8 years. It seems that those clubs did a much better job of selling high and buying low, and managed to keep at least a small core to build around. Beinfest has done a terrific job, but his hands have been tied a bit more than his counterparts in Minnesota and Oakland.

The Marlins have never given that a real shot. I really thought they were headed in that direction when they signed Lowell to a long term deal and signed Carlos Delgado. Delgado was only here a year, as was Pudge. Pudge still had some good years left after he left, as Delgado. You can also argue that Lowell hadn't reached his peak yet with the Marlins, although he was close. Same with Dontrelle. Time will tell. Perhaps the ironic thing here is that Marlins fans may actually be less bitter if they were more like the Twins or A's, teams who haven't won it all but contend most years and keep at least some of their popular players for a while, rather than the roller-coaster ride the Marlins have given us.

I was a fan of Loria pretty much through 2005. It wasn't until they started looking out of town and complained about their situation that many of us started to go south on him. I understand the economics, however, and I am eternally hopeful that a new stadium will at least give some semblance of stability to the franchise and the fans. In the end, that's what Marlins fans want.

Looks like the stadium deal is closer to reality, thanks to MLB who finally stepped in. The Marlins appear to be getting a better deal in paying their entire share up front.

9:48 PM, December 12, 2007  
Blogger Henry Gomez said...

Lowell, like Lee has benefitted by getting onto a team with a more hitter-friendly ballpark. The fact remains that we had Lowell in Cabrera's natural position. The Marlins won the world series in 2003 with a 91-71 record. In 2004 they had most of the same team and went 83-79. And in 2005 the Marlins also went 83-79 and were in the wildcard race until there were a couple of weeks left. That year as the numbers above show, the Marlins only made $3 million. It was after two seasons of fielding very credible teams that they dismantled it. Even after the dismantling, they lost 11.6 million in 2006.

I don't know how you can ask them to spend half their salary structure on 2 players of a 25 man roster.

Beinfest has done a terrific job, but his hands have been tied a bit more than his counterparts in Minnesota and Oakland.

Yes, the he does have his hands tied but I don't think it's Loria's desire to tie them. We have an owner who wants to win but has shallow pockets and a bad stadium deal.

We can fix the stadium part and hopefully as I said the team will be more competitive.

Fun fact. The Marlins have had 4 winning seasons in their 15 of existence. 3 of those seasons have come in the Loria/Bienfest/Samson era. Throw in the 2006 season where the baby Marlins won 78 games and I'd say they have done a pretty good job buying low and selling high.

5:43 PM, December 13, 2007  
Blogger Henry Gomez said...

Another fun fact for you. Through the last 5 seasons, the Dolphins who have a deep-pockets owner "who wants to win" have a winning percentage of .385 and have failed to make the playoffs.

The Marlins with their "cheap" owner who "doesn't want to win" have amassed a record of .501 and of course a World Championship.

12:10 AM, December 16, 2007  

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