By Mike Ozanian
Miami-Dade county taxpayers must be wishing Miami Marlins owner Jeffrey Loria had stuck with his original game plan.
For years Loria ran a low-budget baseball franchises and made a fortune by successfully maneuvering through Major League Baseball’s financial system. Loria’s strategy: rely on welfare from richer baseball teams and every now and then spend enough to have a contender (the Marlins defeated the New York Yankees in the 2003 World Series) so fans stay at least somewhat interested. During the five years through the 2011 season the Marlins posted a staggering $153 million in aggregate operating income.
But then Loria decided to switch to a different form of welfare: taxpayers. Last year the Marlins opened a $639 million, publicly-financed ballpark and parking complex. Usually teams thrive when they first move into a new stadium because of higher attendance, splashy amenities and luxury seating boost revenue. But the Marlins stadium has been a disaster and Miami-Dade county taxpayers are getting hosed like nobody before them.
For starters, the stadium’s financing scheme means there will be some $3 billion in interest expenses on the construction loans that will be paid by city and county taxpayers. Worse for taxpayers there is no incentive for Loria to put a good team on the field because the city and county must pay the bondholders regardless of how the team performs. Moreover, a small but quirky part of the bond financing has turned a $91 million loan into a $1.2 billion liability for taxpayers. And to add insult to injury the Marlins are nickel-and-diming taxpayers over capital repair costs.
Bad omen for taxpayers: Loria is slashing the team’s payroll by at least $50 million this season due to disappointing attendance and revenue at the new ballpark. But the New York Mets – who have cut payroll because of their high debt – have shown that will likely make things worse. The Mets attendance and revenue have been declining over the past two years and Standard & Poor’s recently lowered the rating on the bonds to Citi Field to two levels below investment grade.
The Marlins stadium is looking like the worst shellacking taxpayers have ever gotten from a baseball stadium.