A new baseball stadium was supposed to fix South Florida’s lukewarm embrace of professional baseball. But the Marlins’ first season in their new ballpark may have made things even worse for the team.
Splurging on payroll last year gave owner Jeffrey Loria a $100 million lineup that he couldn’t afford without a windfall from a winning season. The trades that followed last year’s 93-loss debacle sent payroll down 60 percent to the second-lowest in baseball, leaving fans more furious at the Marlins than at any time in the franchise’s 20 year-history.
And while cutting payroll used to produce profits, the added debt and operating costs of a new $634 million stadium have left team executives predicting another loss on top of last year’s team record $47 million operating loss.
“The attendance impacted everything,’’ said David Samson, the team’s president, in a recent interview. “We looked at our revenue numbers, and the team has to be able to sustain itself.”
As the new season opens Sunday, the team appears to be in the baseball equivalent of a foxhole, waiting to fight another day. With a payroll estimated at $45 million — only the Houston Astros pay out less, at $32 million — the odds of the Marlins winning the National League pennant are pegged at 150-to-1.
Samson says attendance needs to increase at least a third from last year for the Marlins to afford a mid-range payroll of $80 million in the coming seasons.
That’s highly unlikely. Would-be ticket buyers don’t seem eager to forgive Loria for cutting costs so quickly after occupying a stadium set to cost taxpayers $2 billion over the next 40 years. Season-ticket sales have fallen by 60 percent to around 5,000, and the Marlins recently became the only major league team using Groupon to sell seats for Opening Day, according to the online discounter.
“Fans really put their emotions into the 2012 season, and they really got hurt,’’ said Michael Jong, a 26-year-old writer for the independent Marlins blog Fish Stripes, and a fan of the team since he went to a 1997 baseball-themed birthday party at what was then called Pro Player Stadium. “They thought things were going to change.”
A review of 10 years worth of Marlins financial statements illustrates the predicament now facing the team. Since Loria bought the Marlins in 2002, boosting the payroll has failed to bring the spike in ticket revenue needed to turn a profit. Only when he slashed player costs did the team record a cash surplus, according to the records.
A source with access to the Marlins’ audited financial statements allowed a Miami Herald reporter to review them and a 10-year summary of the reports during one two-hour session. The reporter could take notes but not make copies of the documents, meaning a thorough examination of the accounting and fine-print was not possible.
The review did identify some key financial metrics the team has not revealed before, including yearly revenue from tickets, payroll costs and how the team borrowed and paid down debt.
Before 2012, the team’s worst year financially in the Loria era was also its best on the field: 2003, when the underdog Marlins managed to beat the New York Yankees in the World Series.
By the end of that championship season, the Marlins posted an operating loss of $43 million — due in part to attendance that was the third-worst in the Major Leagues. Ticket revenue rose the following year as the Marlins charged more and cut back on discounts, but attendance inched up just one notch to fourth-worst in baseball.
Source: Miami Herald
