Jeffrey Loria – historically a terrible owner or a smart business man?
Friday the Miami Herald reported the Securities & Exchange Commission (SEC) has subpoenaed records from Miami-Dade County and Miami over the deal to build a new ballpark for the Marlins.
In a pair of letters delivered to government attorneys on December 1st, the U.S. SEC gave the city and county until January 6, 2012 to deliver everything from minutes of meetings, to records of the Marlins’ finances dating back to 2007.
The SEC also requested documents concerning stadium parking-garages built by Miami. The Herald reported on November 22 that city leaders were upset they were fooled into likely having to pay an annual $2 million tax bill on the garages.
According to the Herald “the 37,000-seat, retractable-roof stadium ended up being a top-heavy deal for the county, put on the hook for $347 million in construction bonds, a $35 million loan to the Marlins, and $12 million for incidentals such as road repairs. The city’s end of the deal is $94 million worth of parking garages, $13 million toward construction, and $12 million for other improvements.
The county will have to dish out more than $2 billion over 40 years to pay back the principal and interest on the bonds, which were sold under poor market conditions.”
P.J. Loyello, the team’s senior vice president for communications and broadcasting, issued a statement Saturday on behalf of the Marlins.
“We are aware of the investigation that the SEC is conducting on the issuance of the county’s and city’s stadium and parking bonds,” Loyello said in the statement.
“Of course, we will fully cooperate with the SEC’s investigation as needed and assist in whatever way possible.”
Major League Baseball awarded Wayne Huzienga an expansion franchise in 1993 at the height of Huzienga’s ownership of Blockbuster Video. With no baseball specific stadium to play their games in, the Marlins played at Dolphins Stadium.
The Marlins won the 1997 and 2003 World Series but Dolphins Stadium was built for football – not baseball. It could be argued that MLB made a mistake in awarding a franchise to the South Florida market when the team was forced to play their games in a football stadium.
Loria knew when he took over the Marlins (leaving MLB with the Montreal Expos in 2002) he had to get a stadium built for his team. He sent his stepson David Samson, who also happened to the Marlins team president, and Loyello to several cities shopping for a stadium deal.
What Loria wanted was an agreement whereby South Florida taxpayers would pay for a stadium and in which the team would receive all of the revenues from the facility!
As crazy as it sounds, when the stadium opens in April Loria will have his stadium and all of the revenues the stadium generates.
“There’s always the issue of pay-to-play. They want to know whether there were unlawful contributions,” said William Nortman, a Fort Lauderdale attorney and former SEC regional administrator. “Don’t forget, there was a lot of controversy over the building of this in Miami. They are examining how this came to be. They want to know whether inappropriate payments were made.”
Time and time again Loria claimed the Marlins had become a money pit. Deadspin.com reported the Marlins received more money from baseball’s revenue-sharing system over 2008 and 2009 than anyone in baseball — and pocketing $92 million in revenue-sharing those two years, making a $33 million profit.
The Marlins new stadium is located where the Orange Bowl was for decades, in Miami’s Little Havana. The Orange Bowl was one of football’s cathedral’s for many years. Little Havana is a rundown, somewhat dilapidated region of downtown Miami, not far from where the Miami Arena was once stood.
The Miami Arena was home to first the Miami Heat and the NHL’s Florida Panthers. The Panthers moved into the National Car Rental Center, now known as BankAtlantic Center, in 1998. The Heat moved from the Miami Arena to The AmericanAirlines Arena on December 31, 1999.
The City of Miami built the Miami Arena in a classic example of urban renewal gone wrong. Build a sport facility in the wrong part of town, and watch as the area is revitalized. Built for a little more than $50 million, cheap by today’s $200 to $400 million arena costs, the Miami Arena should never have been built where it was. When a major sports franchise moves into a new facility five blocks from where their former home was, maybe the old arena was in the wrong place.
Attending football games at the Orange Bowl forced the Dolphins to move to Dolphins Stadium on the Broward/Dade line in South Florida. As challenging as it was to get to the Orange Bowl football fans only had to for Dolphins, U of Miami and the occasional playoff game.
The Orange Bowl game moved to Dolphins Stadium years before the Orange Bowl was demolished to make way for the Marlins stadium. Time will tell, but there is a real possibility the Marlins new stadium will face many of the issues the Heat and the Panthers faced at the Miami Arena, a facility sports fans have no interest in heading to for events.
Any time Jeffrey Loria’s name comes up in terms of sports ownership its worth looking back at his reign of terror when he owned the Montreal Expos.
Loria ended the Expos broadcast agreements alienating the local business community.
In the case of the broadcast agreements with the Expos Loria’s concerns focused on the lack of anyone willing to pay the Expos for their right to broadcast the team in 1999.
His next move that caused concern for Expos fans was that he instilled his stepson David Samson, as Expos president. Samson and Montreal were like oil and water. Samson’s inability to speak French, in a city where 80 percent of the population speaks French, upset the Francophone community.
By the time Loria left Montreal in 2002, he had gutted the Expos roster of any major league talent, cutting the teams’ payroll, making the team nothing more than a glorified Triple-A baseball franchise playing Major League Baseball.
Loria and Samson did win a World Series in 2003. By 2006, the Marlins payroll was reduced to $15 million, even though the franchise was receiving tens of millions of dollars through MLB’s revenue sharing plan.
Simply put Jeffrey Loria was an odd version of Robin Hood – he was taking from the rich and putting the money into his own pockets.
Since 1991, 25 of the game’s 30 teams have built a new stadium or undertaken major renovations of an old one. Only one, the San Francisco Giants AT&T Park which opened in 2000 was built with private dollars.
The optics of an SEC investigation couldn’t come at a worse time for Marlins. The team is in the final stages of a long needed move, selling season tickets and corporate partnership packages, focusing on the new stadium.
An SEC investigation at least in the short terms hurts the franchises ability to sell their new stadium.
It’s easy to blame Jeffrey Loria for this mess but that might not be fair. Yes Jeffrey Loria did agree to take over the Marlins from John Henry in 2002 but MLB should have never awarded a franchise to the city before it had a stadium in place for baseball.
Loria did whatever he had to do to get the best stadium deal he could from South Florida lawmakers. If South Florida politicians were “hoodwinked” by Loria is that Jeffrey Loria’s fault for looking for the best deal he could get for a business he owned or South Florida politicians for committing political suicide?
For Sports Business News this is Howard Bloom