Marlins franchise value drops to $980M, lowest in Major League Baseball

Bruce Sherman, Derek Jeter and the rest of the Marlins’ ownership group are committed to running this franchise for the long haul. Frankly, from a business perspective, they don’t have another option. After investors committed a total of approximately $1.2 billion to purchase the Fish from Jeffrey Loria in the summer of 2017, they have seen that valuation steadily decrease. According to Forbes, it is down to $980 million, lowest in Major League Baseball.

The most significant factor hindering the Marlins is the hundreds of millions of dollars of debt inherited from Loria. But even in 2019, their valuation was at an even $1 billion—continuing to lose value while most others in MLB see growth cannot be blamed on old regime.

Local media rights deals are a significant chunk of the pie. The Marlins have been in off-and-on negotiations with FOX Sports Florida parent company Sinclair Broadcasting to extend the agreement that’s due to expire at the end of 2020. Around the time of the ownership transition, the Miami Herald has reported that the club declined a deal which had an average annual value in the $50 million range (for context, the Marlins haven’t topped $20 million in television revenue during any season under the existing deal). Now, there’s serious doubt as to whether they’ll be able to get a comparable price for the product.

To maximize their presence in the retail merchandise arena, the Marlins partnered with Fanatics in January. The objective was to design and distribute more items with the franchise’s rebranded colors. Predictably, their profits from the rebrand were stunted last season by the lack of competitiveness and individual star power at the major league level. Expectations were much higher for 2020, but the COVID-19 outbreak has halted all of that momentum.

As MLB makes tentative plans to salvage some of this year’s revenue with a short-season schedule, they have prioritized sending teams to locations that would minimize travel and remain unaffected by the October/November climate. The majority of respondents in this week’s SB Nation FanPulse survey endorse these so-called “neutral-site games” all the way through the World Series if it means the league can return to action.

That presents a nice opportunity for the Marlins. Although Derek Jeter recently downplayed the possibility, their retractable-roof ballpark would surely be considered for hosting duties, particularly in postseason scenarios as outdoor playing conditions deteriorate up north. This wouldn’t necessarily be a short-term financial boon—it is unclear whether fans would even be allowed to attend—but rather a platform to showcase improvements made to Marlins Park to an international audience.

The only path out of the cellar of these Forbes valuation rankings is for the Marlins to efficiently construct a talented roster, then win with it, tapping into a variety of new revenue streams. Getting a 2020 MLB season in some shape or form would be critical to expediting that process.

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