Forbes, a global leader in business analysis, has published their annual evaluation of Major League Baseball and each of the 30 MLB teams, including the Miami Marlins. The report is a tactful and cautious evaluation of significant figures for each team, such as revenue, attendance, market value, and a net valuation breakdown.

These reports yielded one primary observation: Major League Baseball is doing amazingly as a whole. But a deeper dive shows drastic differences between the separate organizations.

What did Forbes find for the Marlins?

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Via Forbes

The Good

Finding #1: Observable increase in net value since 2017.

The Marlins have temporarily survived their latest rebuild, although not without some bruises and scarring. An increase of $31M in operating income, from 2018 to 2019, shows that the Marlins aren’t sunk quite yet. Why? Because trajectories matter in business, and although a two-year data point is far from a strong projectable trajectory, it shows progress. Progress which many felt would be impossible following an immediate reconstruction of the roster, as well as a shaky start with new ownership and the fanbase.

Even if we take a one for one approach with payroll, the $22M saved in payroll reduction from 2018 to 2019 would still yield an increase of $9M to the team’s operating income.

Finding #2: Sherman and Jeter weren’t fabricating the team’s issues with expenses; still paid $15M in stadium upgrades.

One of the common contrarian opines against the current ownership group is that the team “will make money anyway.” The phrase is often utilized to explain away any money that is put into the organization as unimportant or insignificant. Turns out the contrarians are not correct this time. The Marlins lost over $50M in 2018, and $22M in 2019. Yet, the organization went further into debt in order to upgrade the stadium and fan experience.

Regardless of your opinion on the ownership group, this never would have happened with previous regimes.

Finding #3: Revenue—not to be confused with net gain—has gone up since 2017.

We again take a look at trajectory. The Marlins’ revenue continues to increase, which may come as a surprise if you didn’t have the data in front of you. Baseball’s revenue sharing is partially responsible for this increase, but the revenue sharing is now a consistent variable. The trajectory itself is not impacted yearly.

Finding #4: Paid attendance has remained flat; superficially inflated totals from previous ownership account for decline in announced attendance.

This point has been previously stated, but is worth repeating now that it has been confirmed. Although much is said about the Marlins decrease in attendance, it is now known that the decrease in numbers is more closely related to method of counting than actual attendance dips. The previous ownership group inflated their head count, and the current one does not. It is that simple. Miami had an attendance problem prior to ownership, and nothing has changed; no increase and no decline.

Finding #5: Revenue trends show that there is a path to success in this market (it’s not a hopeless venture after all).

There is a path in Miami for the Marlins to make money, and not just light money. In 2015 and 2016, Loria and Co. made $15.4M and $15.8M respectively; compare this to the Yankees who only had a $8M+ and $13M+ those same years. Prior to selling, he made more of a profit than the New York Yankees.

You can do that when you keep payroll manageable and also have a team that keeps enough of the city’s attention (i.e. José Fernández). However, attention is not the only route; you can also win. The current owners of the Miami Marlins can make money here; it’s just about digging their way out of a hole that they did not create, but they did buy.

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The Bad

Finding #1: The Marlins remain in the red/negative, even after the team’s latest payroll reduction.

The new ownership group of the Miami Marlins purchased the organization in August 2017, meaning that they have been in charge for two seasons of Marlins baseball. During that stretch, they have endured operating losses of -$53M (2018) and -$22M (2019). The slight year-to-year increase was discussed in “the good” section of this piece, but now we focus on the obvious: an organization losing $75M is not a pleasant sight. There is hope that the trajectory will eventually break even and yield profit, but right now is not the time for a celebration.

Finding #2: They are getting absolutely no value (wins/losses) for their current payroll.

All one needs to do is take a look at the MLB standings of the previous two seasons to reach this conclusion, but it is nice of Forbes to put it into a nice formula for us. Briefly put, the Marlins are paying too much for each win their roster churns out.

To be fair, these poor investments derive from contracts handed out years ago, such as Chen and Prado, but it doesn’t make the current issue any less pressing. The Marlins are grossly inefficient.

Thanks, Loria?

Finding #3: Only the Texas Rangers have more debt dragging down their overall value than the Marlins do.

Run any type of business, and you will find yourself balancing debt and overall value. Debt encompassing a percentage of your organization’s net value is simply a part of the game; only five franchises (i.e. NYY, BOS, TOR, LAA, and SF) are at 0% debt/value.

However, the Marlins take this approach of balancing debt/value to a risky extreme, as they currently have 40% of the value eliminated in debt.

This number should greatly decrease over the next few years, as errors from the previous ownership continue to be cleared out. Also, for those that believe Bruce Sherman isn’t in this for the long run, think again—selling before clearing that debt wouldn’t even get him back to even. Only way to make money in this organization moving forward is to win the market over (more on that in a second).

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The Ugly

Finding #1: The Marlins are the least valuable team in all of Major League Baseball.

That any Miami team would hold this distinction is a testament to how putridly this organization was previously operated, yet here we are. Numerous variables contribute to this (e.g. market apathy, county-owned stadium, a brand—that regardless of immense success in re-branding—is light years away from some of the more popular brands in baseball), but the primary dent comes from winning and the fanbase.

There isn’t enough of either.

Finding #2: Marlins are getting little-to-no economic support from their own fanbase/city/market.

The relationship between the Marlins and South Florida needs to improve for this franchise to ever find success. There is no way around it. Earn back the community’s trust, otherwise the Fish will always be handicapped relative to other teams.

Finding #3: The outlook gets bleaker without on-field success within five years.

The new ownership group has done an adequate job of re-engaging (or holding on tightly to) the fanbase, corporate sponsors, and moving forward with their plan…but the baseball part needs to work. When rebuilds fail, teams typically rely on their market to grasp the reasoning behind it, a fanbase filled with generational lines of die-hards, or a brand that will sell to those that don’t even know what baseball is.

The Marlins have none of that.

For them to succeed in Miami, they need to win. No serious fan is expecting this to occur this year, or even next year, but by 2021+ the winning needs to start.

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This is Miami. If you win, fans will be there and pretend they never left. But if you lose, they’ll pretend they never knew you.

With a complicated history and a troubling current relationship, the Marlins cannot afford (literally) for their baseball plan to fail.