The Marlins and Minimum Payrolls

Major League Baseball’s attempts to narrow the gap between franchises has resulted in an incentive system. While other leagues have salary caps and floors, Major League Baseball has instituted a system of luxury taxes (to bring down the highest payrolls) and revenue sharing (to bring up the lowest ones). As I noted in a piece for ESPN The Magazine this spring, the system has been pretty effective too, as we are currently experiencing an age of parity unlike any time in MLB history.

However, incentives don’t work in every situation. You can carrot-and-stick your way to success on a broad level while still having some individuals fall through the cracks. Overall, I think MLB’s financial system is mostly as effective at promoting competitive balance as a hard salary cap would be, but that doesn’t mean that the system doesn’t have some flaws. And, with the Ricky Nolasco trade, the Miami Marlins are shining a bright light on the system’s flaws once again.

If you look through the Collective Bargaining Agreement that MLB and the Player’s Association agreed to, you will not find the parameters for any predetermined payroll minimum that teams must meet, but there actually is a minimum payroll in MLB. Well, sort of. It’s not codified — at least, not in this publicly available document — or defined, but it definitely exists. In this story, published on on January 12th, 2010, we see a reference to the minimum payroll by both MLB and the Player’s Association.

Here’s the Player’s Association part of the statement:

“In response to our concerns that revenue-sharing proceeds have not been used as required, the Marlins have assured the union and the Commissioner’s Office that they plan to use such proceeds to increase player payroll annually as they move toward the opening of their new ballpark,” MLBPA executive director Michael Weiner said. “Today’s agreement, which covers the period 2010-2012, calls for ongoing communication among the Marlins, the Commissioner’s Office and the union as the Marlins proceed with that plan.

“It also permits, after consultation among all parties, adjustments in the Marlins’ plan to respond to unforeseen developments, and calls for arbitral intervention if disagreements arise. We greatly appreciate the willingness of the Commissioner’s Office and the Marlins to engage with us and ensure that all terms of the Basic Agreement are met.”

And here’s the Marlins part.

“The Marlins have consistently made every effort to put the best product on the field, and our record supports the fact that we have been successful in that regard,” Marlins president David Samson said in a statement. “Throughout the discussions, the Marlins maintained that there had been no violation of the Basic Agreement at any time. While we know that the Marlins will always comply with the Basic Agreement, we were happy to work cooperatively with the union and the Commissioner’s Office on this matter.”

As Alden Gonzalez noted in the linked article, the section of the CBA that was referenced at the time was Article XXIV(B)(5)(a). While the CBA that was in effect then has since been renegotiated, that article still exists in the current CBA, as you can see on page 130 of the PDF. Or you can just read the whole clause below.

(5) Other Undertakings

(a) A principal objective of the Revenue Sharing Plan is to promote the growth of the Game and the industry on an individual Club and on an aggregate basis. Accordingly, each Club shall use its revenue sharing receipts (from the Base Plan, the Supplemental Plan and the Commissioner’s Discretionary Fund) in an effort to improve its performance on the field. The following uses of revenue sharing receipts are not consistent with a Club’s obligation under this paragraph 5(a) to use such receipts in an effort to improve its performance on the field: payments to service acquisition debt or any other debt that is unrelated to past or future efforts to improve performance on the field; payments to individuals other than on-field personnel or personnel related to player development; payments to entities that do not have a direct role in improving on-field performance; and distributions to ownership that are not intended to offset tax obligations resulting from Club operations.

Consistent with his authority under the Major League Constitution, the Commissioner may impose penalties on any Club that fails to comply with this subparagraph 5(a). The Commissioner, in addition to other penalties he may impose for violations of any aspect of this subparagraph 5(a), may require a Club to submit a plan for its financial performance and competitive effort for the next two years. Such a plan must include a pro forma financial presentation that specifies its attendance, revenues, payroll, player development expenditures, non-player costs, and capital spending. The Commissioner, after consultation with the Players Association, may direct the Club to change aspects of its plan, including the level of competitive effort reflected in the plan, or take other actions as he considers appropriate (including escrow of a portion of a Club’s revenue sharing payments).

The Association has the burden in any proceeding under the Grievance Procedure of demonstrating that the Club’s use of its revenue sharing receipts was in violation of this subparagraph 5(a). In any such Grievance, the Arbitration Panel shall consider, among other things: (i) the Club’s expenditures on scouting, player development, and player payroll; (ii) the Club’s long-term strategy for improving competitiveness; (iii) the uses that the Club has historically made of revenue sharing receipts; and (iv) the overall financial position of the Club. Notwithstanding the above, if a Club’s Actual Club Payroll pursuant to Article XXIII(C) is equal to less than 125% of its revenue sharing receipts in a given Revenue Sharing Year, the Club shall have the burden of establishing in any Grievance that its use of revenue sharing receipts was consistent with this subparagraph 5(a).

So, basically, teams that get revenue sharing money have to spend it in a way that convinces the player’s association that it’s actually funneling back down to the players. If they don’t, the commissioner has the power to make them reallocate their money in a way that both the commissioner’s office and the player’s association deem acceptable. It’s not an outlined minimum payroll like the NBA has, but for all intents and purposes, MLB does have a payroll floor.

Trading Ricky Nolasco will not push the Marlins under that floor. They opened the season with a $36 million payroll, but also are financing $8 million of Heath Bell‘s salary with Arizona and agreed to pay $4 million to the Blue Jays as part of the Jose Reyes/Josh Johnson/Mark Buehrle sell-off. With those monies included in the calculation, the Marlins had nearly $50 million in player obligations for this season, so they weren’t pushing the lower limits of team payroll as they have in the past.

But, the Nolasco trade absolutely has to raise questions about the Marlins priorities. In exchange for one of the better starting pitchers on the market, the Marlins chose cash savings over talent. In order to get the Dodgers to agree to take on the remainder of Nolasco’s 2013 salary — about $5.4 million in total — the Marlins agreed to take back three “warm bodies”, as Marc Hulet referred to the fringe prospects they got back from LA.

In addition, the Marlins also sent $197,000 in international spending money to the Dodgers. So, not only did the Marlins choose to lower their current financial obligations in lieu of acquiring better players, they also included a portion of their allocation that was intended to help them develop prospects for the future. In other words, the Marlins traded both present and future talent just for the sole purpose of lowering their 2013 payroll.

Under the new CBA, which limits the amounts teams can spend in both the draft and in international free agency, paying a player to play for someone else is one of the few avenues left to essentially buy additional prospects. Teams that want to rebuild their farm system now have limited options, but paying a player’s salary after you trade him away is one way to essentially exchange cash for future talent.

According to multiple published reports, the Marlins had the opportunity to do exactly that with Nolasco. Ken Rosenthal reported that the Rockies were willing to send “two quality prospects” to Miami for Nolasco, but they wanted the Marlins to pick up a good sized chunk of the money Nolasco was still owed. Instead, the Marlins took the Dodgers deal, which freed them of his salary but gave them minimal talent. The Marlins had a choice, and they chose current cash savings over future talent.

It’s one thing to free up future salary, as they did when they traded Hanley Ramirez last summer, and even did so in the Blue Jays trade over the winter. A rebuilding club can make a legitimate case that removing higher salaried players from their books can aid in the process of putting a winning team back on the field, since those dollars will be available to be spent again on other players in the future. But the Marlins didn’t clear any 2014 salary in this trade, nor did they give themselves any financial flexibility to add additional players. All they did was reduce the amount of money that they’re going to have to spend on their roster this season, and then reduce the amount of money that they had to spend on international prospects as well.

You’ll note that the last time the player’s association complained about the Marlins payroll, they entered into a three year agreement in raise payroll on an annual basis. That agreement covered the 2010 to 2012 seasons, and saw the Marlins sign Josh Johnson to a contract extension, add Javier Vazquez in free agency, and then go all out on their spending spree before last season. However, the 2013 season wasn’t covered in their agreement to increase payroll, and now the team has shed $60 million in commitments from last year to this year.

With Nolasco out of the picture, the Marlins are now on the hook for about $12 million in payments to players on their roster for the rest of the season, plus the $6 million they’ve agreed to send to Arizona and Toronto. Given the amount of revenue sharing they receive and the size of the national television contracts that get disbursed evenly among the 30 clubs, they’re going to make a significant profit this season while putting one of the worst rosters on the field in recent history.

The Marlins can point to the Astros — who have an even lower payroll and are just as lousy — all they want, but at least there’s evidence that Houston is trying to win eventually. When they traded away some of their international spending pool last week, they did it to get a 20-year-old prospect who is already in Double-A. The Cubs just agreed to pick up some of Scott Hairston‘s 2014 salary in order to acquire Ivan Pineyro, a 21-year-old pitching prospect with some potential.

Other rebuilding clubs are using their financial positions to increase their talent base. In the Nolasco trade, the Marlins used talent to increase their financial position. It’s not against the rules, but the player’s association might argue that it violates the spirit of the rules. Or, perhaps, in the next CBA negotiations, they might just decide that it’s time to demand an actual minimum amount of expenditures from each team.

Salary floors are problematic because you don’t want to force a rebuilding team to waste money on wins of low marginal value just to meet some predetermined standard of spending. However, now that MLB has pool allocations built into the amateur markets, perhaps it is time to establish a true minimum spending floor, utilizing both major league payroll and investment in future prospects in the calculation. Rather than saying that each team must spend $40 million (just to pick a number) on its Major League team, perhaps MLB and the player’s association could agree that $40 million would have to be invested into player acquisition, which would cover the big league team, the draft, and the international markets.

Under that kind of system, you’d have to be prepare to invest heavily in the draft and international free agency if you wanted to run a $20-$30 million payroll. You’d have to be prepared to trade for additional international spending allocations, and perhaps in the next CBA, teams will be able to make similar kinds of trades to acquire draft spending money as well, since MLB’s goal is to eventually move to amateur spending into a draft process. With that kind of floor in place, dumping big league payroll would have to be offset by investments in talent elsewhere, and the incentive to simply dump salary in order to make a larger profit would be reduced.

No system is going to be perfect, and overall, I don’t think MLB has a pervasive issue of teams making conscious decisions to choose profit over talent. However, the revenue sharing carrot doesn’t seem to work as well in Miami as it does in other cities. Maybe now, it’s time for the stick.

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Dave is a co-founder of and contributes to the Wall Street Journal.

95 Responses to “The Marlins and Minimum Payrolls”

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  1. Eminor3rd says:

    What a disaster

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  2. Well-Beered Englishman says:

    The irony is, I just watched Major League last night.
    The double irony is, in Major League the owner schemes to move the team to… Miami.

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  3. RMD says:

    I can’t remember the trade market for a starter ever being this diminished. The Marlins had the best player on the trading bloc. Instead of trying to pry away a Zack Wheeler or a Scott Kazmir away from a desperate idiot, they went with three mediocre arms that aren’t going anywhere!

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    • TangoAlphaLima says:

      Depending on how the Royals finish out the month of July, Ervin Santana may very well be the best player on the trading block. If he’s traded, it should be interesting to see how similar or dissimilar it is to the Nolasco deal.

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    • Brian says:

      While I agree that the Marlins totally underwhelmed with their haul, I don’t think most would consider Nolasco to be close to the best available arm with guys like Garza, Gallardo, Lohse, Santana, Peavy, etc… hitting the market.

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      • ZenMadman says:

        But maybe close to a guy like Victor Zambrano.

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      • Dan says:

        Nolasco has been durable and consistent/stable (if underwhelming), and is relatively inexpensive. The only other guy that can make that claim is Lohse, and he is over 35 and has 2 more years committed to him. So yeah, Nolasco might have been the best available depending on what your criteria are.

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        • Jason B says:

          I would tend to agree with Brian. I would prefer Garza, Peavy, obviously Lee if Amaro drops his postseason delusions and makes him available, etc…

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  4. BookWorm says:

    I like the idea of compelling a team like the Marlins to make investments in talent (either present-day or future talent in the form of prospects), but doesn’t the “slot value” associated with draft picks tie their hands a little bit? You could implement a floor, but then a team might have to either: (a) spend a bulk of the money on the big league roster wasting dollars on wins of low marginal value (like you mentioned), or (b) over-pay in the draft and incur penalties for doing so.

    Am I wrong that teams are somewhat limited in how much money they can spend in the amateur draft without compromising their ability to sign picks in later rounds? Or if they do sign those picks, that they’ve exceeded their allowed draft spending and owe penalties?

    You’ve offered a great look at the Marlins situation, and these questions are not intended to poke holes — I’m just trying to figure out how the non-Major League money could be effectively spent with a floor in place.

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    • BookWorm says:

      Woah, I didn’t turn off the italics tag. Sorry for the confusing style in my comment!

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    • DD says:

      I agree with these points – Even if the Marlins had the top pick in the draft with, say, $12 mil of slot, plus $3 mil or so in the Int’l market, they still have to spend $25 mil (in your scenario) on the ML roster. That doesn’t seem hard, but they’ve come down to that level in the recent past (2006-08, per Cot’s).

      I’m not sure how the MLBPA would ever have a strong chance to push this issue. You are picking apart a trade as a salary dump with a middling return in talent, but talent evaluation is subjective and wouldn’t help make the Association’s case. It would take the ability to trade draft picks in the Rule 4 draft, and the team trading their 1st round pick away for cash considerations.

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  5. LondonJoe says:

    You know what would solve this, would be relegation. Which is completely and totally impractical, but whatever.

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    • JuanPierreDoesSteroids says:

      Honestly, Industriales (baseball team in Havana) would be just as likely to compete in the MLB at this point, and as far as an airplane would be concerned, virtually in the same spot.

      But thanks to that stupid embargo, Loria’s reign of terror is allowed to continue.

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    • Baltar says:

      Hip! Hip! Hooray! for Relagation in MLB.
      It’s even more badly needed for NCAA Football, so those teams (including, alas, my Huskers) can’t keep scheduling paper dolls to pump up their records and revenues.

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    • wagon says:

      I thought the same thing. If they want the tv money(etc), they better stay up. The Chivas USA of MLB!

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  6. tommy says:

    I can’t stand this franchise. That is all.

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  7. Casey_T says:

    It’s too bad MLB can’t just force Miami to sell to another owner that actually wants to win. That would be the best outcome.

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    • Anon21 says:

      Realistically, they could absolutely force Loria to sell. That they don’t suggests that the owners view solidarity and being a “good soldier” as more important than giving a damn about the health of one’s franchise. What that says about the owner’s priorities is disappointing, but hardly surprising.

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      • Doug Lampert says:

        One of the horifying things about this is that Luria is COSTING the other owners money. They send him money from national TV contracts.

        Is ESPN desperate for Marlins games?

        They send him money from merchandise sales.

        Do people buy Marlin’s jerseys?

        They send him money from revenue sharing and the luxury tax.

        That’s explicitely money he’s supposed to use to put a decent product on the field.

        Do other owner’s Stadiums fill up when the Marlins visit? Do other NL east teams get bigger TV contracts because 18 of their games are with the fish?

        Why do the owners tolerate this? A bad team costs the league money, they can’t all be winners every year, but the Marlins and Luria are costing MLB money as well as paying the players less than they’d get with a different owner. Yet it’s the player’s union that makes all the noise.

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        • Bobby Ayala says:

          I just bought an Ed Lucas jersey.

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        • Rob DiCiocco says:

          absolutely fantastic points. I was thinking about some of those points myself. the player’s association should send your comments to the other 29 owners, that’s when you will see the next MLB & players association contract definitely concentrate on instituting a real floor as they do in NHL, NBA and NFL which is relative to the ceiling. an example would be 50%. thus if the top spending team is allowed $180 then the lowest spending clubs must spend $90. WOW! in the NHL, NBA and NFL the difference is CONSIDERABLY less than 50% yet the Dodgers and Yanks are over $200 mil and the Astros $30 mil if that. Selig worst commish ever and himself stealing $20 mil a yr in so called salary

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        • Warren Buffett says:

          And yet, the owners fought tooth and nail to keep Mark Cuban from owning the Cubs. It appears that maintaining the status quo is more valuable to the owners than the lost revenue.

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      • skmd says:

        News Flash: cartel of spoiled rich industrialists more concerned about continued stability of their monopoly than quality of product.

        This hardly ever happens.

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    • MikeS says:

      I think too many MLB owners think Loria is doing a fine job – he is turning a healthy profit.

      It’s the players association and the Marlins fan (I think his name is Herbert) that has a problem with them. Neither Herbert or MLBPA can force him to sell.

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    • Baltar says:

      MLB should seize the Marlins, sell them and not give Loria a penny of the proceeds. I don’t care if it’s legal or not.

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      • Simon says:

        You might start caring when the courts make MLB give Loria twice as much as he would otherwise have got due to the blatant law violation.

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  8. Blockhead says:

    This is a league that allows and backs an owner like Loria who could care less about winning or his franchise’s fans. But Mark Cuban, someone clearly committed to winning and spending money, isn’t allowed near MLB because he likes to open his mouth.

    Hopefully Bud Selig’s little Boy’s Club gets broken up one day.

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    • Allan H. Selig says:

      Sure, when Peter Cushing drives a wooden stake through my heart. Ha!

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    • Ruki Motomiya says:

      Free Mark Cuban!

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    • Yeah I Said It says:

      Re: Mark Cuban

      As a Royals Fan, I dream about him on a nearly nightly basis. There’s very little that he couldn’t help this franchise with, in terms of interest, financial resources and even just him being him. Fans like me would line up for his autograph. Years later, I couldn’t pick David Glass out of a lineup that included 6 people, 5 of them women.

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      • Bill says:

        Mark Cuban plus the Royals player development personnel would still equal a bad team. Glass’s problem isn’t his willingness to spend money. My fear would be that Cuban would go all out to win but would do so with the lack of patience resulting in another LA or Anaheim like team. Still, this is must better than the Marlin’s model even if the result is the same.

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  9. Eminor3rd says:

    With all the limits on draft and international spending, you’d have to be encouraging them to break the rules by overspending, though, if you’re not going to force them to spend the $40m on the Major League club.

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  10. NWein44 says:

    Forbes values the Marlins at $520 million. I’m a Tigers fan, but I’m willing to chip in a few bucks to buy the Marlins from Loria and sell them at a loss to someone who actually cares about baseball. Might be able to raise enough if we get a few big investors…

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  11. Paul says:

    The Marlins have some good young players in Fernandez, Stanton, Ozuna. There staff is pretty young as well. if they just had an owner who gave half a damn about winning and not as much about just pure profit they could actually be a pretty decent team. Until then they will always be the cheap Marlins as we know them

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    • Brian says:

      The Marlins have consistently had good young talent but they’re all traded away for nobodies, such Miguel Cabrera for a bag of peanuts and a small soda.

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  12. Eddie says:

    Fire Jeff Loria. Out of a cannon.

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  13. Athletics Enthusiast says:

    For me, the thing that bugs me the most about my team, the A’s, is that they operate assuming that once a player reaches four or five years of service time unless they have already signed the player to a cheap extension, they are going to ship him for prospects, when it would be better for the team and the fans that they instead made a good-faith effort to sign a deal covering all seasons up to at least their age-32 or age-33 season. A salary floor minimum would just give more money to the journeymen and aging slugger type guys they sign to supplement their roster–there would be no added value whatsoever to either the team or the fans.

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    • suicide squeeze says:

      Can you give examples of these players that Oakland hasn’t made good faith efforts with? At least recently, pretty much every good young player has been signed to a deal with the A’s (Swisher, Gonzalez, Cahill, Anderson), and then flipped when the time is right.

      If you’re referring to ten years ago with guys like Tejada and Giambi, then I will give you that. However, I think we can both agree that not giving them giant deals worked out well in the long run. Having a few years of Chavez’s deal was tough enough…adding a quickly declining Giambi and Tejada to that would have hamstrung the club too much to the point that something like 2006 would have been unlikely.

      In addition to the recent deals with pre-arb players, the A’s have taken some swings at free agents, but were rebuffed (Beltre, Furcal, Berkman). I don’t think Beane is perfect by any means, but I think he’s done a great job given the constraints. The teams has at least been competitive every year, and has started to go on another run.

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      • Nick O says:

        I realize it’s a ways in the past but I think the A’s would have loved to have that Tejada contract in retrospect. Especially since he was putting up 6-7 WAR seasons in the two years they barely missed the playoffs. Giambi was pretty dang good over the life of his contract too.

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      • Baltar says:

        Don’t confuse the issue with your facts!

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  14. Pat says:

    Because it’s Miami, Loria can get away with what he’s been doing with the team. Miami fans only show up when the team is actually in the World Series. I don’t feel bad for the Miami fans nor do I think it matters much for the game of baseball. How many of your teams can say they’ve won two WS titles in the last 20 years?!

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    • Antonio Bananas says:

      So. 2 surprise years that nobody cared about except for the month of the playoffs and the month after. I’d rather have a consistent contender that never wins than one that sucks most years and has 2 surprise wins. It’s about the journey. Then again, im a braves fan.

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    • Jason B says:

      “How many of your teams can say they’ve won two WS titles in the last 20 years?!”

      As a Blue Jays fan, I wonder if I would trade their last twenty years for the Marlins’. The Jays have had their seasons of 85 or 86 wins, and have had some players that I have grown quite fond of or attached to, but they still haven’t managed a playoff appearance (let alone a pennant or WS title) since winning the series in 1993. I might let it all go for two more titles, followed by total dismantling and starting all over again.


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  15. Tom B says:

    Yankees, Cardinals, Red Sox, Giants, Blue Jays all have 2 WS in the last 20 years.

    I don’t understand this statement… “as we are currently experiencing an age of parity unlike any time in MLB history.” Is that even true?

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    • Tom B says:

      “at least 2″ *cough*

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    • Jeff Loria says:

      you know who else has two?

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    • kylemcg says:

      21 years actually. Arbitrary endpoints? Five teams win exactly 2 championships and one (NYA) wins 5 times over that span.

      Of course if you take the 21 years before you see the Twins, Reds, A’s, Pirates, Dodgers, Yankees, and Orioles with at least 2. But I dunno, I have never heard parity defined as “fewest repeat winners over a span of 21 years” anyway.

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    • KillahYeast says:

      World series victories are probably a bad judge of parity because of the unpredictability of the playoffs and all. So, I wanted to do something weird to answer your question. So I compared NL East teams for victories over a couple of seasons and threw those into a gini coefficient calculator to see how equal teams are. 0 would be complete equality, 1 would be complete inequality. (There are problems converting wins to income, but whatever). Since 2010, here are the cumulative wins for each franchise in the NL East: Philadelphia 323, Atlanta 324, Miami 253, Mets 267, Washington 293. To have real fun, the gini coefficient for those numbers comes out to .05425 (really equal). To look at that same division between 2002-2004, the gini coefficient is .06154 (and since that is missing half a season, the difference is a little greater than that). So, with a small test- it does appear that there is increasing parity in baseball.

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      • James says:

        A Gini coefficient of 0.54 is equivalent to Brazil (or Zambia), where there are currently riots happening over the level of inequality. So not *really* equal.

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        • KillahYeast says:

          .054 my man (or 5.4%). So much better than Brazil. But of course absolute Gini of baseball shouldn’t be used to argue for absolute parity, because the very rick in Baseball are only about 40% richer than the very poor in baseball (in terms of victories). So, the point is relative parity. As in, this era is more equal than others.

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        • Antonio Bananas says:

          Is the Gini coefficient of the league really something you can compare apples to apples with income?

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    • Robert Kuhl says:

      2001-2010 saw 9 champions in 10 seasons (Dbacks, Angels, Marlins, Red Sox, White Sox, Cardinals, Phillies, Yankees, Giants).

      Prior to that, though… 1978-1987 saw 10 champions in 10 seasons (Yankees, Pirates, Phillies, Dodgers, Cardinals, Orioles, Tigers, Royals, Mets, Twins).

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  16. alen says:

    here in NYC people panic if the yankees don’t have a chance to win the WS, like this year

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  17. Ivan Grushenko says:

    The simple solution would be to limit revenue sharing to the cash amount spent on current MLB, MiLB payroll and amateur bonuses, such that receiving teams could never actually make a profit. They would still have to pay their own stadium rent or mortgage if their city doesn’t, and their front office payroll costs, etc. They wouldn’t lose much if any money, but they wouldn’t make any either unless they attracted more fans. But really speaking, if the other owners are willing to pay Loria and tolerate his ways, it’s their business. I wouldn’t tolerate him in their shoes, but whatever.

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  18. redcyclone says:

    As a Marlins fan who has grown up with the team (I was 5 when they were formed), I’ve hated to see things go the way they have. I feel Loria is pretty blatant in his profit operations, and I have my own reservations about money and baseball in general, but as an owner he seems to be the most slavishly subscribed to the “Major League (film)” style of baseball ownership. It’s hard to root for a team with such an inept front office, and aside from the Heat and the Rays, Florida sports teams seem cursed by this trait. Is there a bright side to all of this to Miami hometowners who really just want a competently run, competitive baseball team?

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  19. Radivel says:

    Anyone want to form a Kickstarter to buy the Marlins? I’ll be the GM and take a salary of $45000/yr. We can create some useless corporate entity (We’ll call it JeLoria Sucks Corp) to own the business so we can’t be bankrupt. We’ll get Wendy Thrum to be financial advisor and Dave Cameron can be my assistant GM. YES WE CAN!

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  20. Ctownboy says:

    Major League Baseball NEVER should have put franchises in Florida.

    People go to Spring Training in Florida because:

    1) It is warm.
    2) It is baseball.
    3) It is warm.
    4) It is inexpensive
    5) It is warm.

    In the Summer, people can travel to their closest major league city to see baseball whereas they go to Florida for the beaches and Disney.

    No, if MLB were smart and wanted to expand (and have parity) they could have located two new franchises in regions of the country that could sustain them AND that didn’t have something else that would compete with baseball OR they could have just put a new franchise in New York and one in Boston (like the old days).

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    • Ivan Grushenko says:

      Miami is a perfectly good place for a major league franchise. Jeff Loria is not a perfectly good owner for a major league franchise.

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    • Robert Kuhl says:

      The problem isn’t Miami. They are at least as viable a city as anywhere you could relocate them. The problem is that the fan base has been tortured by terrible ownership. Huizenga was bad enough, Loria has only exacerbated the problems with how fans see this franchise

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    • Richie says:

      I’ll split the middle here. Neither Miami nor Tampa/St.Pete are good baseball towns. Too hot come summer, too elderly, Miami Cubans on the parochial side (like rooting for white Cubans at anything, really not cultural baseball fans otherwise). Divvy up the franchise locations, I’ll without a doubt put each in the bottom 5. That still makes them viable. Though with their horrible stadium location, perhaps Tampa isn’t.

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      • Richie says:

        As for MLB, they in good part want more eyeballs for their national TV/cable contracts. And Tampa/St.Pete and Miami especially do provide that. My elderly relatives down in Florida, they’ll never ever go to a game, nor switch rooting allegiances from the Tigers/Cubs/Brewers. But they will watch Rays/Marlins on TV fairly often.

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  21. Rippers says:

    Worst. Owner. Ever.

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    • Baltar says:

      Worse than that guy who sold Babe Ruth to the Yanks?

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      • Scraps says:

        Actually, Babe Ruth was sold twice early in his career. Jack Dunn, owner of the minor league Baltimore Orioles, sold Ruth to the Red Sox. Then Harry Frazee sold him to the Yankees.

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  22. JS7 says:

    The Marlins have been the 2nd most profitable team only behind the Yankees since 2003. Forbes opened their books and found this information out when Loria was claiming to have lost money every year since taking over the team. Loria is a dirtbag liar and doesn’t care about baseball or Miami.

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  23. Erik says:

    The easy answer is to tie the revenue sharing disbursements to on the field performance.

    Continually decreasing spending below certain levels over a certain number of years while continually sucking should lead to continual decreases in revenue sharing.

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    • Jason B says:

      “The easy answer is to tie the revenue sharing disbursements to on the field performance.”

      Blech. Sometimes the solution is worse than the problem.

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  24. Richie says:

    Guys, if I’m an owner trying to win, I love Loria. His cheapness will, unlike McCourt’s thievery, keep the franchise perfectly viable. He’s not going to outbid me for any of my players, nor beat me out of a playoff spot. He’s saving/making me more money in those ways than he costs me in my portion of the revenue-sharing pot. Which, anyways, would just go to some other franchise then, wouldn’t they?

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    • Warren Buffett says:

      This is true, in that the increased revenue from interest in a competitive product would be offset by increased payrolls from competition for players (why the players union complains)…but I’m guessing the TV revenue that is lost from perennially inept Marlins teams not attracting viewers is a greater cost, and an even greater efficiency loss.

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  25. It would be pretty easy to implement a floor. Say the floor is 50 million. A team spends only $40 million. That $10 million gets split among the players on that team like playoff shares. I believe either the NBA or NFL does this, maybe both.

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  26. M W says:

    League Minimum x 25 = Salary Floor

    No team can go below it.

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  27. Phil says:

    In my opinion the problem is Bud Selig. Part of the commissioner’s job(at least in my opinion) should be to not allow owners like this to operate in this manner. Just about every business operates with the goal of making as much money as possible without breaking any laws(or more accurately to do it without getting caught breaking any laws). So it shouldn’t be a surprise that someone like Loria who got rich using this strategy would use this same strategy with his baseball team that he used to make his other businesses profitable, which is how he was able to afford the baseball team in the first place.

    The commissioner’s job is to ensure the overall profitability of MLB. Loria’s strategy makes his team richer but makes the league as a whole poorer. It is Selig’s job to be the one who ensures the league as a whole is as profitable as possible not the individual owner’s. In a perfect world it would be great if the owner’s also cared about the league as a whole and not just their team however this is unlikely to happen since the majority of owner’s got rich in the first place by only caring about their profitability and not others so it’s unlikely they are going to buy a sports team then use a completely different approach to run the sports team than they used to get rich in the first place.

    Therefore it is up to Selig to ensure that no owner uses Loria’s strategy of spending very little money so he can collect a lot of money via revenue sharing and turn a big profit by intentionally putting a weak product on the field. Unfortunately Selig and the other owners know this but MLB is run like a little boys club, so no matter what Loria does Selig will just back him.

    This is why as a fan while I hate Loria I hate Selig 10 times as much and think that Selig is the real problem. If Selig did his job(what I think is his job) then Loria would be forced to spend money or sell the team and the whole problem would just go away.

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    • Chris says:

      See Milwaukee Brewers Payroll the 5years before and after the Stadium funded by fans was built. Can you see any similarities? As in exact same plan going on that Selig implemented as a previous owner himself?
      Loria will sell this team likely in a year or two.

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  28. skmd says:

    Cubs have been eyeing Stanton out of the corner of their eyes. if/when he demands a trade, could be a steal if there were, say, anyone who thinks having an all-star RF on their team is a good idea.

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  29. Chris says:

    Miami-Dade County 59.4% $376.3 million
    City of Miami 20.9% $132.5 million [a]
    Miami Marlins 19.7% $125.2 million [b]
    Cost (principal) — $634 million

    a The city’s contribution includes $10 million towards demolition of the old Orange Bowl stadium, and $94 million to build the parking facilities.
    b The Marlins may spend up to $89.5 million of their contribution on “soft costs”—or, non-construction costs. These include fees paid to designers, consultants, attorneys, and political lobbyists.

    The total cost to the county is $2.4 billion, spread over 40 years, to repay $409 million in bonds that will primarily, though not exclusively, cover stadium construction. Roughly $100 million will refinance existing bond debt and another $9 million goes into a debt service reserve fund. The remaining $300 million is for stadium construction, financed in two ways.

    One portion, underwritten by Merrill Lynch totaling $220 million, has an interest rate of 6.4 percent and requires immediate repayment. In October 2010 the county must pay $9.6 million, though there are questions over whether tourist taxes will meet that. Annual payments run through 2049 and climb as high as $71 million per year.

    The second portion, underwritten by JP Morgan, is for $91 million, $80 million of that for construction. That carries an 8.17 rate, but repayment doesn’t begin until 2025. Yet that grace period comes with a big price: $83 million a year for three years starting in 2038. Then, starting in 2041, six years of payments totaling $118 million annually. The resulting total amount to retire the entire debt: $2.4 billion.[45][46]

    Not listed in the breakdown are the annual charges that the city is required to pay during the lifetime of the contract. They are as much as $2 million per year for the parking-facilities taxes payable to the county, and $250 thousand per year to pay the Marlins’ stadium maintenance fees. Adding these future expenses to contributions already made brings the city’s total stadium expenses to $210.7 million by 2049.[42]

    The Marlins received an interest free, $35 million loan from the county that it will pay back through yearly rent beginning at about $2.3 million and increasing 2 percent each year. Including this debt brings the team’s total stadium expenses to $161.2 million through 2028. The county and city combined total expenses are $2.61 billion through 2049.[47]

    The stadium deal also gives the Marlins almost all revenue created at the ballpark, from ticket sales as well as food and drink concessions, to parking spaces selling above $10, to gate receipts from concerts and soccer matches when the ballclub isn’t playing.

    At a Glance
    Owner: Jeffrey Loria
    Price Paid: $158 M
    Year Purchased: 2002
    Franchise Value according to Forbes 2009 when the Stadium was set in motion to be built:277Mil
    Franchise Value according to Forbes 2013
    520million. An increase of 243Million for Loria for just 125mil. cost. And it will continue to rise in the next 2 years.
    This with Operating Income of 43.7mil 2009, 46.1mil 2010, 20.2mil 2011, 9mil 2012, and a (loss) of 7mil 2013. Expect profit to be 50mil again 2014 Watch!

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    • Richie says:

      Thank you for all the info.

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      • Breadbaker says:

        Mind you, the revenue from the stadium this year has not been exactly breathtaking. When I was in South Florida early this year I heard a radio ad offering free Marlins’ tickets when you bought a ten dollar pizza. Not a lot of concession or parking revenue if no one is in the ballpark.

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        • Blah says:

          Concessions? Ticket sales? That is chump change compared to the increase in value that will be cashed in on when Loria sells…an increase in value that was paid for by taxpayers.

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  30. Bagman says:

    He’s a thief. Except he owns a baseball team as opposed to a gun.

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  31. _David_ says:

    Great article. One question, wouldn’t the ‘save in order to spend better’ argument apply to money saved at any time? A team could cut salary only in 2013, but claim that this will allow them to spend in the future when they are at a different place on the win curve.

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  32. _David_ says:

    When considering the letter of the rule vs spirit of the rule argument, isn’t it very difficult to prove intent vs. stupidity? As in, the Marlins could theoretically argue that they believed their haul from the Toronto salary dump and the Nolasco trade was of greater value than the pieces surrendered, and if it doesn’t pan out that way then they were simply wrong?

    To take this to the extreme, couldn’t the Marlins trade Stanton for three replacement level farmhands but claim that for whatever BS reason they thought the players they got were of greater value?

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  33. Brian says:

    The Marlins have a great MLB roster and I see nothing wrong with what they are doing – signed Bud “My best friend is Jeffery Loria” Selig

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  34. PackBob says:

    What is best for baseball just might be to not rock Loria’s boat, at least in the eyes of the other owners and Selig. It must be really scary to contemplate a precedent whereby an owner making a profit could be forced out. And I would think that an owner’s proclivity to running their franchise however they see fit is a precious commodity to them. And finally, who is to say that with the prospects haul the Marlins will definitely not craft a winning team in a few years?

    For the owners club, their best bet may be to just lay low and hope it will all blow over.

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