8:50pm: The Marlins issued a statement to Hanks indicating that the purchase agreement included language protecting the new ownership group from claims relating to the stadium agreement. “This claim has absolutely nothing to do with the [current] ownership group,” the organization says.
6:31pm: Miami-Dade County is suing the Marlins, the former ownership group led by Jeffrey Loria,and the team’s current ownership group, according to a report from Doug Hanks of the Miami Herald. The litigation will address a dispute that has arisen over the municipality’s rights to a share of profits from the sale of the organization that was wrapped up last fall.
Details of the suit are still somewhat sparse at this time. But the general parameters of the matter were laid out by Hanks a few weeks back and are touched upon in the above-linked post. The county claims “fuzzy math” was utilized to prevent it from recouping a share of the sale profits.
Generally, of course, a local government would not have a direct claim to the proceeds of the sale of a sports franchise. But Miami-Dade County forked over hundreds of millions of dollars to enable the construction of Marlins Park. As part of the 2009 agreement that led to the new stadium, the county (along with the city of Miami) is entitled to a five percent share of certain profits from the franchise sale. Loria now claims that the $1.2B sale did not leave him with any profits within the terms of the contract.
It’ll surely be interesting to see how this litigation plays out. The current ownership group (led by Derek Jeter and Bruce Sherman) will necessarily be involved, given that it now owns the entity that inked the original contracts, though its potential exposure to liability is not clear at this point. While it’s always possible that things could end up being settled out, the discovery process could lead to the airing of quite a lot of fascinating information regarding the Marlins’ finances. That possibility, no doubt, will also play a role in how things shake out.
Whether or not the team will be impacted moving forward, the suit also promises to be of quite some relevance to the ongoing debate over the public financing of stadiums. The Marlins Park episode has long been cited by opponents as a prime example of the harms the public can suffer when municipalities pay for the facilities utilized by sports teams.
Good for them, I complained loudly about this!!!
Good for them.
And yet this will somehow still be blamed on Jeter.
Only an idiot would blame Jeter. Loria is a piece of dung. I am so happy to have him out of professional sports.
Hope Loria loses his shirt.
5% Of “certain profits” from a sale will not lose him his shirt.
Unless of course he spent everything he had on that shirt?
Loria is one of the biggest pos in business. He screwed over Montreal for a buck and now he’s done it to Miami. I hope they win in court.
And he was facilitated directly by Bud Selig, it would be awesome if they could drag that scumbag into the suit too.
and this is why you don’t pay for private goods with public funds. Honestly, does this nonsense happen anywhere else besides professional sports?
Sadly lots of places but I wholly agree.
Pretty much everywhere else…name an industry and it’s likely subsidized by taxpayer money…
washingtonpost.com/blogs/govbeat/wp/2015/03/17/the…
Good link. Yeah, the only socialism in this country is corporate socialism
Why does MLB keep letting owners like him have franchises?
Jeter has the exact same vibe as him too, if you are anyone outside of New York.
Nice try. Two keen differences.
1a) Jeter owns <5% of the Marlins.
1b) Loria owned near ~100% of the Marlins.
2a) Loria turns everything he touches into a mess.
2b) Jeter inherited that mess.
1) Loria brought 2 WS titles to the Marlins
2) Jeter inherited a mess because his group outbid the 2nd highest by $300M
Titles > ruining an entire city financially.
Cool.
Loria did not own the team in 1997 when they won the first title. He bought the team in 2002, just a year before the second title. After a flurry of moves, about half of the team was brought in to win the title. Realistically he is half responsible for 1 title.
Or letting him have a franchise TWICE.
Just to expand on my point a little further.
3a) Loria’s owned the Marlins for 15 years, with history of turning the Montreal Expos into ruins.
3b) Jeter just became minority owner less than 6 months ago —taking over Marlins team which finished last in NL attendance — 12 in the last 13 years— missed playoffs every year— since 2003– and haven’t had a winning record since 2009 – year Giancarlo Stanton’s debut, with one of, if not worst Farm system in all of MLB.
Anyone can see a total complete, and utter Rebuild is the only way, if you are anyone out of Florida.
Amazon does this.
It’s a mutual benefit. Let’s not forget that, in the long hall, these teams emply hundreds of employees, spend hundreds of thousands annually with local vendors, their mere presence greatly benefit the surrounding business (public transportation, taxi services, utilities, bars and restaurants, hotels and police man-hours) and are taxed heavily over the course of their lease. I wouldn’t say the public should pay the majority of it but there’s a symbiotic economic relationship that exists between the private ownership and the city at large,.
Loria, during his tenor as Marlins owner, is a perfect example between the team that chooses to “tank” vs non-competitive teams (75 wins and below) that decide to jettison expensive veterans or players with few years of control away to slash salary AND most importantly get back talented prospects that are intended to be the foundation a 5 year plan to return to competitiveness. Looking at teams with 75 wins or less last year I can’t see too many teams other than maybe Oakland, Mets and the Marlins (77 wins) that can be accused of tanking.
Loria is a billionaire. The taxi drivers are not.
Your missing the point completely. Look.. I’m NOT defending Loria and his actions. He’s the worst kind of owner because he’s won on affordable contracts and then torn teams apart to save money. I’m saying that there’s a huge benefit to a city and other business when they have a major sports team and they build new stadiums. I’m not inferring the public should pay the majority of the expense but I think they should pay something significant since its to their benefit too.
All owners are close to if not are billionaires. They still are smart and want to make a profit.
Loria is a tenor, I assumed he was a soprano!
Just kick him in the nuts a few times. That’ll make him a soprano.
however, those people employed are part time at best – baseball at least has 81 home games, but other sports have significantly less days of employment (football with 10 including preseason). On top of that, the teams have no real obligation to stay in their stadium/city. The NFL’s Rams franchise left the city and county of St Louis with about $144 million of debt and maintenance costs. Study after study shows the impact on surrounding businesses are not worth it
Most corporations do this actually whether it is in the cost of tax breaks, regulation relaxation, land donation, etc in order to attract business, one day officials will realize it is never a good thing
Let us not forget too that many of our biggest corporations have squeezed out smaller businesses, pay low wages, & provide little to no benefits, all of which end up being subsidized by the government(taxpayers). Read about the Gilded Age, cause we’ve been in one ourselves here for quite some time.
Here in Port Saint Lucie, FL the city gave a company from out west called Digital Domain 40 million dollars of city tax funds to bring them to the city. Two years later the company was losing money and bailed on the lease. City had to sell assets recovering only about 10 million back. Unfortunately, it’s not just sports. Politicians use our money all the time for what they think is best.
Didn’t it happen in the 80’s with all the major car manufacturers in Detroit ? When they had that big bail out for them?
This is a lawsuit I can get behind
I hope they drive Loria out of the game for good and take a good chunk of what he stole from it.
Thank goodness this is happening. This way he’ll never come back to sports. MLB should ban him from trying to buy another team and screwing another American city. Good for them, I hope they win the court case.
Fangraphs hired a new writer with a legal background who had an excellent piece on this issue the other day. Worth the read.
She felt a traditional lawsuit was unlikely to succeed but that there might a legal path to force Loria to open his books and if he fudged his numbers, he could then be forced to pay.
Not to criticize so much as to offer some added context …
It isn’t an either/or. You can sue on multiple claims and see what sticks. And it’s not so much that a contract claim couldn’t succeed as it is that there may be some limitations, with the equitable theory of accounting representing a potential method for opening additional avenues to recouping cash.
Generally, I think we don’t quite have the full picture yet (from what I’ve read anyway) and that it’ll be a lot easier to parse it all when we see the actual complaint.
EDIT: Reading the comments on the FG post … Sheryl clarifies a key question I had re how the contract works. Rather than trying to discuss it all here, I’ll recommend reading both her post and the comments beneath it.
fangraphs.com/blogs/how-miami-could-still-get-its-…
What you are trying to say is that it is legal to throw spaghetti at the wall and see what sticks. No need to use extra words
I’m conflicted. Obviously, I want justice to prevail. And obviously, I want Loria to get what’s coming to him. But I also don’t want a city to have their stupidity rewarded. Councils need to learn not to fund the business ventures of billionaires.
“But I also don’t want a city to have their stupidity rewarded.”, I was thinking the same
How does the county accept the proposal and now they want some kind of justice? They were the fools to begin with
Nonetheless, Loria is a cancer
And another thing, “[they] were deemed entitled to a five percent share of any profits from the franchise sale”, come on, they didn’t think this could be overcome?
Because they have a contract with Loria that’s how!
The stupidity and downside in publicly funding a sports stadium is an entirely different than taking legal action to wholly enforce the terms of a contract, no matter how stupid the original purpose of that contract is. I highly doubt Miami-Dade County believes its decision to get in bed with Loria will be “rewarded” if it prevails in this lawsuit. Rather, they believe (and probably rightfully so given Loria’s history) that they were defrauded of a large sum of money that is rightfully theirs. No one wants to be involved in litigation, but often it’s an inevitable choice, especially when it’s to be made financially whole again.
Unless you’re class action lawyers
and then they all want to be involved in litigation !
If you agree to strip your clothes off and belly flop on to a fire ant hill in exchange for $1, just because you’re an idiot doesn’t mean you don’t deserve the $1
We see now that they obviously had put provisions into the contract to protect themselves from the various ways Loria could attempt to screw them over. Now that he’s still trying to screw them over, they are taking the appropriate legal action. Doesn’t sound stupid to me at all.
I agree tired of these owners pay for these stadiums. Have always felt all these clubs should take a % of profits in a kitty and then if they want a new stadium some place then owners pay for it.
$158,000,000 paid in 2002
$1,200,000,000 sold for in 2016.
$0 profit claimed by Loria.
That’s not fuzzy math. That’s criminal.
The problem is that Loria can claim that during those 14 years, he ended up with losses and even with the sale he didn’t had profit
Sure, he could claim that but that doesn’t make it true. Let’s say he operated at an astronomical amount of $50 million in net losses each season (no way it is that high). He owned them for 15 years. That’s $750 million in net losses. Add the $158 million he bought the team for and you get $908 million. That leaves $298 million in profit.
There’s just no way a guy bought a team for $158 million, sold it 15 years later for $1.2 billion and somehow made no profit.
Amen to that. I agree, and hope he gets what’s coming to him in court.
Ding ding ding…Loria is a f’ing crook and he should never be allowed to purchase any professional sports team ever again
Well you still have to deduct taxes and transaction expenses
There’s lots of legal shenanigans that can be played here, but first I’ll make a correcton to your post. First, the contract on the stadium was signed in 2009, not when he bought the team, the value of the franchise would have been evaluated at that time. It’s altogether possible that he managed to overvalue the worth of the team in 2009. Had he said in the contract that it was worth 1B, well then he could easily argue that there was no profit.
Legally, profits are easy to hide for a single corporation, by transferring them to another corporation. For actors, there is a rule that you never sign a contract that states you get a portion of a movies profits, as movies never turn a profit. The term is “hollywood accounting”, but it can be used in other businesses as well.
AlvaroEspinoza Your math is wrong and here’s why. EXPENSES!
Every dime he sank into the franchise between 2002 and 2016 is ADDED TO HIS COST BASIS! Since 2002, the cost basis has grown.
It’s just like if you bought a house in 2002 for $100,000.
Over the years you add another $100,000 of improvements.
When you go to sell the house today, your cost basis is now $200,000.
If you sell that house for $200,000, you will have no profit!
Of course, I have no idea what the figures are. None of us do.
I’m just saying that your simple math example is flawed.
But the normal yearly operating expenses wouldn’t come off the top of the sale as expenses again! He already took those as losses on his taxes from year to year!
That’s Fraud!
heck I would love to see the league put a team in Montreal like the way they ran the Nationals and then find a buyer the same way
If they don’t get their money, lock the team out of their stadium. I’m tired of cities paying the Lion’s share of the cost to build a new stadium and then the billionaire owner making money hand over fist at the expense of the taxpayer.
I concur
So elect different muni and state leadership. When stadium issues come up there’s almost always a bipartisan effort to throw tax dollars at the team to keep them from moving out of town. The evidence is inconclusive when it comes to how wise it is to do that in the long run. But that’s what happens.
A complete and total circus
The Jordan Belfort / Snake oil salesman of MLB.
without the drugs.
Fuzzy math? No profit within the meaning of the contract? Obviously, the contract and accounting need to be reviewed but there have been several similar type suits in the past including James Garner suing Universal Studios and music artists suing their recording label. Should be interesting and the IRS hopefully is watching.
James Garner of the Rockford Files
Did not expect to read this
I like it
Also, Miami Dade County should have spoken up before the deal was official
They could have gotten an injunction and an arbitrator involved
Although, i have no idea if the law is in their favor!
Many articles on the Net including: hollywoodreporter.com/thr-esq/james-garner-a-lawye…
A deal is a deal. They agred to an underlying valuation of 625 million pre-stadium with 8% annual escalators. That took the value to over 900 million leaving 300 million profit after the sale minus debt, taxes and closing costs which all together wiped out the initial profit.
This is all political theater. It was an awful deal and by crying about it the current regime highlights that fact and gains support from the outraged voters
I’m sure it’ll help fill the seats in Miami too.
Absolutely it’s political, but it’s also simply a move to recover a large sum of money that the County believes it deserves. Regardless of how awful the deal was in the first place, the County shouldn’t be deprived of the opportunity to demand the money it was promised – per the contract. The law doesn’t discriminate between smart and dumb, it adjudges what’s right and wrong. That may sound overly simplistic, but at the end of the day, this is a contract matter. If Loria didn’t abide by his terms of a contract he agreed to, he should be held accountable.
$60 Mil.
That’s a sizable lawsuit
Loria is a slug should have been in jail years ago
Get every penny you can from him, Miami. Then stick the IRS on him.
Jeff Loria should be banned from everything.
DUHNT DUHNT
Lets get the IRS in on this too, the feds should take a cut of those capital gains
I hope his a** gets cleaned out. He is arguably the dirtiest owner in mlb history and it’s time he took a huge loss for once. He single handily ruined the marlins
Frank McCourt may have something to say about that
Does he still own the parking lots at that toilet of a stadium
They share the same thing in common:
Friendly relations with commissioners:
Here are the three stooges:
Frank McCourt
Jeffrey Loria
Fred Wilpon
They should all be admonished for robbing their team’s fans of a real chance to win when their own agenda was clearly different.
McCourt
Take that snake to the cleaners.
Hope they take him to the cleaners. Freaking scum bag
Loria is horrible, knowing that, the city and county should have insisted on 3% of the total sale price vs. 5% of the profits. When doing business with a snake you need a contract that box the snake in and not give him the opportunity to screw you
Hey Brewers…though I understand your point I question whether that would be enough. With the axiom, “cheaters will cheat”, had the contract been written the way that you suggest Loria would have wormed his way through a sale agreement with provisions that brought the sale price down to get compensation another way (consultants’ contracts, payments to 3rd parties, etc.).
Miami got in bed with a con artist and only now they’re whining about being screwed. They’re losing a dollar and screaming they deserve a dime.
move the team to another city.
Yep, here comes the truth! All traded players will have to revert back to the Marlins due to breach of contract. All deals are null and void. This just messes up fantasy baseball as we know it.
What? No
Hopefully Jeter is looking at serious prison time for this…..he deserves it after fixing the 2009 World Series. Scumbag!
That’s a long, long time to be butthurt…
You are a friend of yourself when you are in the bathroom with an old playboy magazine. You’ve been in there for the past few months and have lost sense of reality. Ask your mom for a sleeping pill.
It’s not Jeters doing! He has a 10% ownership stake in the team! His group bought the team, not sold it or had that contract with Dade Co.
reminds me of Mike Brown and the Cincinnati Bengals.. should’ve just let them leave. I remember someone doing the figurative math and every adult taxpayer in Hamilton county paid $260, but that’s obviously loose math and I could be remembering incorrectly
Miami deserves better. Its a great city, I hope Jeter can get them back on track.
Heater fired the mascot now he will have fire peanut vender.
Get the IRS involved. This criminal owner has stolen taxpayer dollars and evaded paying taxes by cooking his books. He belongs behind bars.
This should be a warning to other cities who are asked to foot the bill for these stadiums. It’s too bad nobody’s gonna learn from this.