When Bruce Sherman and Derek Jeter formed a group of investors to purchase the Miami Marlins for approximately $1.2 billion, it confused just about everyone. Sure, there were other bidders to contend with, but earlier that year, Forbes valued the Marlins at $940 million, placing them among the five least valuable MLB teams. They had been operating in the red under Jeffrey Loria, leaving behind hundreds of millions in debt to assume, too.
But when you take a look at the financial opportunities the Marlins ownership will have in the coming years, Sherman and Jeter’s investment begins to make sense.
The Marlins’ current lack of value is largely due to their weak local TV contract and routinely poor home attendance.
As for the former, the Marlins are locked into a TV deal with FOX Sports Florida that pays less than $20 million annually, but expires after the 2020 season. Their ratings for game broadcasts are down to 1.16 in this non-competitive summer, MLB’s third-worst local rating. Fortunately, despite the steady drop in cable subscriptions annually, MLB teams have enjoyed massive increases to their television revenue. Expect FS Florida to up the ante if they were to maintain their relationship with the Marlins under a new long-term contract.
Consider that the Tampa Bay Rays reached a deal with their FOX affiliate in February that will pay the small market team $82 million annually until 2033, up from $35 million in 2017. While Tampa Bay is a larger television market and the Rays average a TV rating that just about doubles that of the Marlins, this bodes well for Marlins ownership negotiating a steep raise of their own.
Another way they can add revenue is by selling the naming rights to Marlins Park for $2-4 million per year (based on industry standards). Roughly two-thirds of MLB teams utilize naming rights for their stadiums and Marlins president of baseball operations Chip Bowers made that a priority of his upon taking the job. On Tuesday, a new Jeter profile by ESPN’s Jerry Crasnick confirmed it’s still “on the agenda.”
This new ownership group was not only tasked with turning around poor revenue numbers, but also working around a slew of bad contracts. Unloading Giancarlo Stanton’s behemoth of a contract—10 years, $295 million commitment entering 2018—and shipping off Christian Yelich, Dee Gordon and Marcell Ozuna was just the start; the Marlins continue to be handicapped by inefficient deals.
Edinson Vólquez and Junichi Tazawa are collecting $20 million combined from the Marlins this season, even though neither still pitch for them. Recently re-injured Martin Prado ($13.5 million) and inconsistent Wei-Yin Chen ($10 million salary plus $8 million signing bonus installment) don’t carry their weight. Both will earn even more in 2019 thanks to the back-loaded structure of those agreements. Even the relatively productive Starlin Castro ($10.8 million) is somewhat of a misfit considering the new direction of the franchise.
If you've read this far, congratulations: here’s the good news. There is light at the end of the tunnel when it comes to the pile of bad contracts. After this season, Vólquez and Tazawa will be off the books. Combined with midseason departures of Brad Ziegler, Justin Bour and Cameron Maybin, nearly $36 million from the present payroll is freed up for the future.
The Marlins must reinvest some of it in arbitration eligible players like J.T. Realmuto, Derek Dietrich and Dan Straily (all due raises). But I expect them to unload Dietrich and/or Straily via trade before Opening Day, shifting their obligations to another team looking for depth. Castro is expendable as well, so when it is all said and done, the Marlins could have less than $60 million committed to the 2019 roster with a completely clean slate beyond 2020.
Entering a new decade with improved revenue streams and a maturing, homegrown core, the Marlins can once again make a splash in free agency. If they can settle on a reasonable price to extend Realmuto, we’ll finally have a team worth getting excited about.