The Biggest Ongoing Scam in Professional Sports Is in Miami
Marlins owner Jeffrey Loria deceived taxpayers, pocketed funds meant for team improvement, traded away high-value players to make a buck. It's time for fans to protest the MLB about it.
Somewhere, an enterprising baseball writer must be working on a book that is the opposite of Moneyball. This story wouldn't be about a bright, idealistic, young executive who, on a budget dwarfed by those of other major league teams, fields winning ball clubs with underrated players whom he acquires cheaply.
This book—let's call it Scamball—would be about an owner in his 70s who signed All-Star caliber players, hoodwinked the taxpayers into funding most of his new stadium, and then after just one season after the stadium opened, sold off the best talent and pocketed the profits.
What actor could play such an owner? Maybe Alan Arkin, who has portrayed a variety of charming con artists. Or maybe Anthony Hopkins—after all, he made a great Richard Nixon. They don't have to actually look like Miami Marlins' owner Jeffrey Loria. They just have to convince you that they are devious enough to pull off the biggest ongoing scam in professional sports.
Three years ago, Deadspin, in a terrific piece of investigative journalism, confirmed what many had thought all along. The Marlins were using the rich stream of cash flowing in from Major League Baseball—their cut of the national television contract and licensing money as well as their share of the "luxury tax," the penalty money divvied up after teams like the Yankees go over the salary threshold—not to do what they were supposed to be doing, namely providing their fans with a better baseball team. Instead, the cash flow was simply treated as profit by Loria and team president David Samson. Loria and Samson had, for years, been poor-mouthing, insisting that they were barely breaking even financially (though in 2007 Forbes reported that the Marlins actually had the highest operating income in baseball), and they needed the help of local government to pay $645 million for the new stadium (and accompanying parking facilities) that they said they needed to be competitive.
Samson called Deadspin's leak of the financial documents "a crime," though in fact it would have been more accurate to say that the documents revealed a crime. Finally there was conclusive proof that the Marlins could have paid, at the least, for a major chunk of the new ballpark's construction costs. Yet somehow, with shrewd behind-the-scenes manipulation, Loria managed to get Miami-Dade County to agree to a deal for more than $400 million in loans with honey-coated extended payment terms. That wasn't all: Miami and the County would cover three-quarters of the cost, leaving the Marlins responsible for only around $155 million.
The sweetest part of the deal for Loria was that the team alone would get any revenue from ticket and suite sales, advertising, concessions, and any future naming rights. Another hidden financial treasure that will become apparent if Loria chooses to sell the Marlins in the near future: The very existence of a luxurious new stadium, even if it's owned by the county and not the team, can double and even triple the sale value of a major-league franchise.
By the way, the taxpayers of Miami-Dade County never got a chance to vote on the deal, which will, over the next couple of generations, cost them an estimated $2.4 billion in lost revenues and interest.
With Opening Day about a month away, it appears that Loria has not only gotten away with it, he's done it again.
He recently said that the 2013 Marlins "are not a Triple-A ball club." This may be the first genuine truth he has told in some time: The 2013 team could be more accurately described as a Double A franchise. The 2012 Miami club finished dead last in the National League, 29 games behind the first-place Washington Nationals. What the Marlins are fielding this year is essentially that team minus four-time All-Star shortstop Jose Reyes, four-time All-Star pitcher Mark Buehrle, and two-time All-Star pitcher Josh Johnson, all of whom were traded, along with their substantial salaries, to the Toronto Blue Jays.
In return, Loria received from Blue Jays seven players, three of them optimistically labeled as "prospects." In deals like this, prospect could be defined as "player to be named later."
Exactly how much money Loria will save from trading established players for virtual unknowns can't be calculated for many years. But there are two safe bets. First, Loria will, when the returns are in, have made a tidy profit. Second, that profit won't go back into acquiring free agents or player development.
Oh, and let me add a third. If any of these prospects pans out as a major-league star, Loria will trade him and his salary to a contending team for another minor-league prospect and pocket the difference in salaries.
Marlins fans have been picketing Loria's office with bed sheet signs and bull horns, but they're aiming at the wrong target. There are always going to be people like Jeffrey Loria in baseball or any other professional sport. The only thing that can prevent them from scamming the fans is strong leadership at the top. If Marlins fans want results, they should send a few representatives to Commissioner Bud Selig's office in New York. There's a clause in Selig's contract mandating that he act in "the best interests of baseball." Right now that would mean stepping in to prevent owners like Loria from using a big-league team as a front for squeezing money from taxpayers.