Marlins Financial Statement

As most of you should know by now, the Marlins' (among other teams) financial statements were leaked to deadspin.com around 2 a.m. on Monday morning and the internet went all abuzz.

I did see it about the time it was released and busily started saving pages just in case it had short shelf life, but I refused to look at it since it was 42 pages long.  I just went to bed.

Naturally, there were articles written about it--and I'm not naming names--which proved that sports writers didn't have to take finance, accounting or economics when getting their college degrees.

Yesterday I had a long day at work and the last thing I wanted to do was read through a 42 page financial statement on an off-day. However, I did, finally, read the first six pages, and the Marlins LP (LP stands for Limited Partnership) are getting a raw deal in the press.  I really wish I could get a real copy of the statement.  Reading the deadspin one is killing my eyes.  Oh, by the way, the statement includes the Jupiter operations, the stadium development and operations.  Not just the Marlins.

Most of the articles written say that the Marlins made $39,214,00 in profits in 2008 and another $12,677,000 in 2009.  These numbers are the Operating Income, which do not represent the club's profits.

Every now and then you can find one that uses Net Income, which is closer to the "profits" than the above.  They have the Marlins making $29,462,000 in 2008 and $3,900,000 in 2009.

The Marlins did make money in 2008 and 2009, but contrary to popular belief, it didn't go into Loria's pocket.  The Marlins used the money to pay down longterm debt.

You know all that stuff about the Marlins operating in the red for all those years? It turns out it to be true.  The partners (owners) of the team have lost everything they put in to buying the club and an extra $61 million dollars along with that.  The "profits" were used to buy down the Accumulated Debt from $173 million in 2007 to $140 million in 2009.

As much as this pains me to say, David Samson's explanation for where the money went is probably correct.

Samson said there was another part of the equation: the need to borrow money for ballpark financing.

 

"We had to show that we were a healthy company that was not overleveraged, having too much debt," he said.

 

"The information that is now public basically confirms everything that we have said over the years in terms of how we have operated the team with an eye toward one thing, and that was making sure that baseball would be secure in South Florida, and we would be able to contribute what was required in order to consummate a stadium transaction."

It is true, it's hard to get funding if the organization is over leveraged.  And the Marlins needed to do anything they could to work out a stadium deal if they were going to remain in South Florida.

Like I said, I haven't examined the whole the financial statement, and maybe I will.  But the stories out there aren't holding water, that I can see.  No one should expect the Marlins LP to be in business to lose money.  That said, I really don't know the business of baseball and I do understand that the owners mainly make their money back and more when they sell the team.  But I do know this, they sure as heck aren't getting rich off the Marlins at this point.

I need to go take a shower, since I never thought in my life I would stand up for Loria and Samson.

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