Lately, when the Miami Marlins have been in the news, it’s because new owner Derek Jeter has done something exceedingly dumb, or at least something that looks really dumb. But this time it’s not about Jeter. The Marlins’ previous terrible owner, Jeffrey Loria, is in the news for — surprise! — still being a terrible owner, despite the fact that he no longer owns the Marlins.
Back when Loria swindled/convinced Miami-Dade county and the city of Miami to pay the majority of the $515 million it would take to build Marlins Park, there was a profit-sharing clause in the contract. That clause gave Miami-Dade and Miami the right to 5% of the profits if the Marlins franchise was sold within ten years. The contract was signed in 2008 and the sale was completed in 2017, which means that both the city and the county would get 5% of the $1.2 billion sale, right?
Not right. The Miami Herald reported on Friday that Loria has found yet another way to take money away from Miami and won’t be sharing any of the profits from the sale.
But Loria could deduct team debt, certain expenses and taxes tied to a sale, and county officials and team executives privately predicted Loria wouldn’t agree to give up any of his revenue from the October sale to Derek Jeter and partners.
Loria bought the Marlins for $158 million in 2002, and sold the team 15 years later for $1.2 billion, which is a profit of over a billion dollars. But according to documents obtained by the Herald, Loria’s accountants are arguing that the $1.2 billion sale actually resulted in a $141 million loss. And how they got to that number is pretty bonkers.
In a brief report sent by Loria’s lawyers, his organization said the terms of the deal resulted in a profit-sharing calculation of zero. The reason? About $280 million in debt that lowered the profits from the $1.2 billion sale, plus an agreed-to underlying value of the franchise of about $625 million, based on it getting more valuable each year. Add in nearly $300 million in taxes tied to the sale by Loria and partners, and Loria’s accountants claim the sale amounted to a loss of $141 million. Loria also deducted the $30 million fee paid to the financial advisors hired to negotiate the deal.
Carlos Gimenez, mayor of Miami-Dade County, told the Herald that the county may sue Loria to get a portion of the profits. Considering that Miami-Dade paid the majority of the $515 million it took to build a stadium for a private multi-millionaire, and the multi-millionaire himself paid shockingly little, that seems like a just response. The county’s communications director, Mike Hernández, had a much shorter take when he first heard the news about Loria’s profit sharing.
— Mike Hernández (@HernandezMA5) February 2, 2018
Derek Jeter may have done some ridiculous things as the Marlins’ new owner, but he has a long, long way to go to catch up with Jeffrey Loria.
More MLB coverage from Yahoo Sports:
– – – – – –