November 29, 2006
FishStripes Responds
Yesterday I asked why the Marlins don't finance their own stadium. FishStripes explains:
The main reason is they can't afford it. According to Forbes, on April 6, 2006, the entire Marlins franchise was worth $226 million and had an operating income of $-11.9 million. Granted that has changed since the reduction in payroll wasn't in full swing until late November of 2005, so the balance sheet may look more favorable after the 2006 season. But still, I think it would be hard to secure financing to build a $425-$450 million dollar stadium when all the collateral the team could put up is $226 million. I'm no banker, but I would be surprised if the Marlins could secure that loan. The only way they could is if MLB wants to be banker.
Well, I don't think that's exactly right. The franchise itself has value, and any land the franchise buys then has value. Real estate tends to do very well in the long term. Also, the bank should take into account that if the Marlins get their own stadium where they receive the parking and concessions revenue, as well as all ticket revenue, the franchise would be worth a lot more. I don't think it takes all that much to get the Marlins franchise value to $500 million if they build a new stadium. My guess is that with all the extra revenue generated, they could pay the loan, which is all that really matters.
Posted by David Pinto at
09:30 AM
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Fishstripes is mis-informed. Anyone doing a real estate deal of this size would have investors, they wouldn't be fronting the entire cost all by themselves (certainly not by staking the entire value of their business on the deal). There is no reason why the Marlins can't drum up investors. There IS a reason why they wouldn't want to - why privately finance something when you can make the public do it?
Jeffrey Loria, friend of the people.
Loria is an ass, but I disagree, JC. The stadium is a business, if the business does not draw customers it's worth less than cost. It will never be built. Loria will not fund, public will not fund, and any investor(s) with that much dough and that little sense have long since been fleeced. Fish can move, play the hand dealt, or draw paying customers. They'll move.
Let's also not forget that -$11.9 operating profit number is also absolute bullshit.
The same Forbes article says the Yankees lost $50 million in operating profit. I don't know who lost what, but if you believe the 11.9, you'd have to accept the $50m.
Let us not forget that no one goes to Marlins games. They have pathetic attendance and that announced number is usually higher than the number that actually shows up at the ballpark. No need to build a stadium for a fanbase that doesn't evens support a pretty good team. I have friends who live in Florida that love the Marlins but they need to be moved.