Forbes values Miami Marlins franchise at $520 million

Steve Mitchell-US PRESSWIRE

Forbes released its annual estimates on Major League Baseball franchise values, and the Miami Marlins have climbed up to $520 million, a 16 percent gain from last season. But hidden in those numbers are arguments in favor of the Marlins' cost-cutting.

The Miami Marlins have come out multiple times this offseason citing heavy losses as the reason behind the massive fire sale trade with the Toronto Blue Jays. The Fish insist that they lost games (true) and lost money (questionable), and thus needed to lose payroll in a big way to accomplish what is increasingly sounding like another "market correction."

Well, the financial magazine Forbes recently released their annual estimates on the value of MLB franchises, and the Marlins were valued at $520 million, a 16 percent increase from last year. This makes you wonder why the Marlins are cutting costs while gaining value at the same time. After all, fans knew that the addition of a new, taxpayer-funded stadium would boost both revenues for the team and franchise value when it comes to resale, as any sale of the Marlins would certainly include Marlins Park in the deal. Naturally, the Marlins' franchise value would climb as a result.

But despite this news being the latest in a number of releases making the Marlins look bad for trading off much of the team's core, there are factors within that 16 percent gain that are beneficial for the Fish. Here is the Miami Herald on the topic:

The boost came thanks to the gains that a team gets with a new stadium. But the bulk of the gain came from a rising tide generally lifting all teams. That includes a richer revenue stream from MLB’s television contracts, increasing dollars from MLB’s online ventures, and even an investment windfall from an endowment set up with proceeds from the league’s 2006 sale of the Washington Nationals, according to Forbes.

The 16 percent gain is not just the stadium, but in fact the sort of gain you would have expected to see from all major league teams. When you look at the actual Forbes list, you can see that the Marlins' 16 percent gain is actually modest compared to the rest of the league. Only 10 teams other than the Marlins had 16 percent jumps or less in value last season, and while that includes some interesting names like the Los Angeles Dodgers (15 percent? Really?), the point stands that the Fish did not gain as much as other teams. This includes struggling franchises like the San Diego Padres (31 percent) and Kansas City Royals (29 percent).

The other factor that the Marlins may cite on their side is that, despite Forbes's estimated increase in value, the magazine estimated that the Marlins did indeed lose money last season. Forbes estimates that the Marlins lost $7 million last year in operations. That ranks as the third-lowest estimated operating income in the league, ahead of only the Texas Rangers (lost $8.7 million) and Los Angeles Angels of Anaheim (lost $12.9 million). You can expect those teams to stop losing that kind of money once their mammoth television contracts kick in, but where does the relief come for the Marlins? Only six teams in MLB last year are estimated to have lost money, including the Marlins. The Fish, however, had the lowest revenue of those six teams, barely beating out the Toronto Blue Jays in that category. After the trades, the Fish can expect that number to dwindle as well.

However, despite the estimated operating loss, the Marlins still cut a lot of operating costs in slashing the payroll by 60 percent. The team likely expected ticket sales to level off at midseason levels at the start of 2013, regardless of what they did to the franchise. Seeing that, they figured the operating loss was likely to be greater this year and adjusted as they saw fit. But a $60 million decrease in payroll to cover what could have been perhaps a $20 million loss in revenue from last year to this year still seems extreme. The Marlins have been claiming that they lost what seems like closer to $40 million last season, yet the impartial third party observer Forbes estimates it at only $7 million. Unfortunately, without access to the books, there is no way anyone outside of the Marlins and Major League Baseball can really know, but one figures the estimate could not be all that far off.

The report is just another number to be used in the ongoing narrative between the Marlins legitimately losing money or swindling the fan base and county once more. It is unclear just which side this information benefits more, but it is likely that the Marlins would rather have any financial information of theirs suppressed in order to avoid any potential backlash.

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