Tuesday, November 13, 2012

What the market will bear II

It's a classic story of seduction and betrayal. Major league baseball scion Jeffrey Loria insisted he needed money from the city of Miami and Dade County if he was to keep his team in South Florida. Miami blinked, caved and financed 80% of a new stadium for Loria, who feigned poverty:

Well, the whining finally worked in 2009, and construction of Marlins Park began. Overall, it cost the City of Miami and Miami-Dade County over $500 million. However, counting debt and interest payments, the cost will in the end amount to $2.4 billion. Oh, and remember how Loria claimed the team couldn't afford to build the park themselves? The SEC has been investigating the stadium deal, specifically the claims that public funds were necessary.

They were particularly unnecessary as of today because Loria has embarked on a fire sale, sending all of his high-priced players to Toronto for prospects with modest salaries. The players he traded were pitched last winter as a chunk of the world class team designed to fill the subsidized stadium and stuff city coffers. The owner appears no longer willing to lavish salaries on superstars to pay back public subsidies he lobbied for.

Nashville is not considering building a major league ballpark, but the lesson for minor league cities is no less real: the spin of pro sports owners (and the politicians who enable them) is not to be taken naively.

UPDATE: Bob Nightengale minces no words in underscoring the criminal intent of this stadium con:

The Miami Marlins pulled off the ultimate Ponzi scheme, getting South Florida taxpayers to pay for a new ballpark to watch a product that simply doesn't exist.

Bernie Madoff is spending the rest of his life in prison for his con job. Marlins owner Jeffrey Loria and President David Samson get to walk free, enjoying the fine artwork, fish tanks and swimming pools in their $634 million facility....

These guys conned taxpayers into paying $409 million for their retractable-roof stadium, and there's a cool $2.4 billion service debt. They told their public they would be the New York Yankees of the South, only to become the same ol' Marlins. The dollars they've committed beyond 2013? Zero.

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