The news came out last Friday that Miami-Dade County is suing Jeff Loria, the former owner of the Miami Marlins, and the Marlins Organization for their portion of the profits made from the sale of the Miami franchise to Team Jeter this offseason.
Before we get into whether or not Jeff Loria owes Miami-Dade County any money, let’s go over Loria’s history as an owner in the MLB. Buckle up, y’all. It’s ugly. It’s awful. He’s the worst. And if our track record of calling out awful sports figures and love for the Montreal Expos carries any weight, you’re in for a treat.
Jeffrey Loria: The Worst Owner in the MLB
In 1999, Jeffrey Loria bought a 24% stake in the Montreal Expos for $12 million dollars, becoming the managing general partner. Loria had initially tried to buy the team in 1991 from then-owner Charles Bronfman, who opted for a Canadian buyer, taking less money for the team to keep the owner local. Loria and his group apparently offered $35 million more than the accepted offer, but also mentioned that he wanted to move the team to Miami.
Eight years later after that initial attempt to purchase the team, Loria owns 24% of the team and is the managing partner. Immediately Loria puts out a statement that the low budget operations of the team’s past were over and done with. In order to change their small ball culture, Loria restructured the ownership agreement allowing him to call for cash investments in the team in exchange for team equity.
What does that mean? That means that Loria could call his minority owners and ask for additional cash investments in the team. If an owner was unable to up their investment, Loria would buy their equity, the idea being that he would buy it at the increased value. To break it down a different way, Loria was calling to tell other partners that their share was worth more than they paid, and then paid them the lesser worth and added money to the team. That’s a GameStop equity acquisition. Your share was worth $10, but now it’s $50, so give me $50 or I’ll give you $10.
The first cash call Loria put out, only four partners were able to up their investments. Loria’s ownership grew to 92%, a controlling share, within two years.
In his first year, the low budget ways were over and Loria doubled the team’s payroll… from $17.9 million to $33 million. That’s the guy we’re talking about here, people. The “big budget” team would never get out of the bottom payroll ranks during his time there.
The Best Laid Plans…
In order to bring in more money to the team, Loria had one big piece to his master plan: A New Ballpark. Without the money to build it himself, Loria set out to make an agreement with the Canadian Government. Labatt Park, Loria’s dream, married the new design of modern ballparks with some elements of retro style. Think Safeco Field meets Camden Yards. All he needed was the money and the land approval.
The first snag happens when the City of Montreal didn’t see the need to build a new ballpark since the Expos had a perfectly good, inexpensive option in Olympic Stadium. The “O” had a lot of problems. Not only was it poorly located and in disrepair, it was MASSIVE. Like… MASSIVE. Remember the Metrodome in Minneapolis? Imagine that it had not been built with either baseball or football in mind, but instead, a World Cup. The Twins wouldn’t have lasted. Instead, the stadium was built with baseball in mind, complete with backstop and everything. This also influenced the way the 1996 Olympic Stadium was built, as it would later be repurposed as Turner Field, home of the Atlanta Braves. The stadium plan fell flat time and time again, as the City of Montreal refused to use public funds to build it.
Jeff Loria also made some very odd moves in his tenure as managing partner. The strangest being the termination of the contract between the club and Canada’s largest English-speaking sports TV station, The Sports Network, or TSN as it’s more commonly known. TSN also had coverage of Toronto Blue Jays and was the ESPN of Canada. The NHL has suffered from the lack of hockey on ESPN and other leagues like the NBA, NFL and MLB have prospered. So you can guess how this move panned out.
By the end of the 2001 season, the minority owners had turned to Bud Selig, pleading for him to intervene with Loria’s ownership moves. The minority owners claimed that Loria’s motive was to tank the team and move them to Florida, as he had always intended. Selig didn’t do anything because he’s Bud Selig and he loves doing nothing, and the owners now began to wonder if Loria and the Commissioner were conspiring to move the team out of Montreal.
They were half right.
In 2001 the MLB owners, in a 28-2 vote, decided to fold the Minnesota Twins and Montreal Expos franchises after the 2002 season. Thankfully, the Expos survived after the Twins filed an appeal due to their contract with the city and the Metrodome, which stated the MLB had to honor the length of their lease. Loria then sold the Expos to the MLB for a total of $120 million dollars, more than 10x his original investment in the team.
Immediately following the sale, the MLB and Selig gave Loria a $38.5 million dollar loan to buy the Miami Marlins from future Red Sox majority owner John Henry. Loria took everything of value with him to Miami, including the team’s computers and scouting reports. The Expos were left scrambling and never recovered. They left Montreal after the 2004 season.
The minority owners of the Montreal Expos filed a lawsuit against the MLB, Bud Selig, and Jeff Loria under the Racketeer Influenced and Corrupt Organization Act, claiming that Loria swindled the team away from them in an attempt to sell the team. Their case was tossed out of court in 2005.
So Jeff Loria moves to Florida and wins a World Series in his second year as owner. In the 14 years Loria owned the Marlins, they had 4 seasons above .500. The Marlins also failed to find themselves in the top half of team payrolls during that span, except for the one time in 2012.
So what was Jeffrey Loria doing to help the Marlins win? Nothing. The answer is nothing. He walked into a franchise that was rife with young, inexpensive talent. He then set out to obliterate that lineup by letting players walk and creating a revolving door for his managers.
There are also some very curious moves made by Loria in Florida, like the trade that sent Miguel Cabrera and Dontrelle Willis to Detroit. Trading away your top players isn’t something an owner trying to win a championship does, unless, of course, it’s for some very good prospects. In fact, at one point after the City of Miami voted against funding a ballpark, Loria traded away the teams best players saying, “we’re getting our finances in line with our revenues.” In 2012 after their first season in their new ballpark (more on that in a bit) Loria completed a 12-player deal with the Marlins, one that didn’t make them better, instead it dumped payroll.
Jeffrey Loria was never going to spend money on players to help the Marlins win. That’s been clear. It’s been the clearest thing about him.
But let’s talk about Marlins Park since that’s what you’re all here for.
Same Story, Different Place
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We know Loria’s penchant for a publicly funded ballpark. It was his #1 priority in Montreal and his #1 in Miami. The Marlins at the time were sharing Pro Player Stadium with the Miami Dolphins. As soon as he purchased the team, Loria began work towards getting the Marlins a stadium of their own. The City of Miami and Miami-Dade County were reluctant to devote public funds to the venture, especially after all of the news surrounding Loria’s departure in Montreal.
So Loria pulled an old trick out of his playbook: he threatened to leave. Despite winning a World Series less than 5 years prior, Loria made threats to relocate the team if he didn’t get a publicly funded stadium.
In February of 2007, the county held a hearing to discuss the use of public funds. At this hearing, then MLB President and COO Bob DuPoy stood in front of the Miami-Dade County Commissioners and said, “I just want you to know that if you decide not to make a decision tonight, that will be the death knell for baseball in Miami. We are out of time.”
WHAT IS THAT.
This a franchise that is barely 10 years old and the MLB is putting the squeeze on the county to keep the team. What kind of heinous insanity is this? This is Jeff Loria’s world.
After deliberating that night, the Miami-Dade County Commissioners agree to a deal that allows public funding to be used for a new ballpark for the Marlins.
How much funding did they approve?
Well, after saying no every single time, the city and county caved. The threat of losing a professional sports franchise was the tipping point, and frankly, it was the smart move. You can’t allow a two time World Champion team to just walk away. Their hand was forced.
So aside from spending more than their fair share on the new stadium, Miami and the County had some provisions put into their contract with the team. One of those provisions entitles the City and County to profit-sharing in the event the team was sold within 10 years of the stadium’s construction.
The Long and the Short of the Suit
Miami-Dade County is suing Loria for $50 million dollars, or $35 million less than the Marlins projected payroll in 2018. That $50 million was to be put aside by Loria to cover any claims from Jeter and partners as the buyers. The County wants a Judge to freeze that account until they can decide how much profit-sharing they want, and to stop either side from draining the fund, something Loria would most definitely do.
Why do I say that? The lawsuit claims that Loria puffed up his expenses on the sale, therefore allotting no money left to share.
“The Loria Marlins clearly believe that their unsupported, self-serving, and fuzzy math is a sufficient basis to deceive the public,” it says within the filing “but the Non-Relocation Agreement, the implied covenant of good faith and fair dealing, and simple common sense require much more.”
The Miami City Manager has also stated that he intends to file a suit against Loria himself as well.
The Miami Herald has been doing some great work on this and I’ll let them take it from here:
The profit-sharing element of the agreement requiring the Marlins to play in Miami was designed to discourage Loria from “flipping” the team on the heels of increased value from moving into the government-funded stadium. The agreement gave the governments a diminishing share of profits from any sale over the next decade. For the final year of the deal, 2018, Miami-Dade was entitled to about 4 percent of the profits and Miami less than 1 percent.
On Feb. 1, Loria’s lawyers and accountants delivered to the county a summary of their profit calculations, showing the $141 million paper loss on the sale. The largest deduction came from the underlying value of the team under the terms of the 2009 agreement. While Loria bought the Marlins for $159 million in 2002, the county agreement pegged the team’s value at $250 million in 2008 and allowed it to increase 8 percent each year.
The county claims the Marlins got the math wrong on that calculation, saying the team claimed $374 million in growth when it should really be $180 million. It also questioned how Loria could claim more than $300 million in debt and cash contributions to the franchise. County lawyers said they were entitled to proof of the significant payouts and loans claimed by Loria.
The lawsuit also cites leaked financial records from the Marlins published by Deadspin in 2010, revealing some of the team team’s confidential accounting from 2008 and 2009. It notes that “while the Loria Marlins claimed to the public they were not profitable, they were in fact one of the most profitable teams in Major League Baseball in 2008.” – Jeffrey Loria claimed no profits on his $1.2 billion Marlins sale. Miami-Dade is suing, Miami Herald
Jeffrey Loria sold the Marlins for 1.6 Billion and the turned around a valued the team at $250 million.
This whole thing stinks worse than dead fish, or what Loria left behind in Little Havana.
Loria the Liar
At the root of this whole story shouldn’t be the finances of the City, the County, and Loria, but really what the Marlins organization has done in the last 20 years. They have done very little to deserve anything they have gotten. It has been all smoke and mirrors. It’s been the perfect plan, laid out with perfect execution by Jeff Loria, the world’s worst sports owner.
The new ownership group came out quickly to distance themselves from the lawsuit, despite being named as defendants. Of course, it’s the smartest PR move, but what it’s really a deflection. All the new ownership has done is complete the final stage of Loria’s plan.
Completely dismantle the team, lose the fans, alienate the city. Sell.
- / 1 year ago
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