Editor's note: This piece originally ran in May 2017, before a prospective sale.
Jeffrey Loria is about to pull off one of the most profitable franchise sales in modern baseball history. What's clear is Loria's massive success in making money. Less clear is the value of the franchise he is cashing out on.
For those who believe that baseball ownership involves some sort of civic trust, Loria left a lot to be desired. Since Loria took over the franchise in 2002, Marlins payrolls have consistently ranked near the bottom of the league, ranking last more times (five) than the team has finished last in the NL East (four). The team hasn't finished with a winning record since 2009 and hasn't made the playoffs since winning the World Series in 2003. After the city and county built a new stadium with half a billion dollars in taxpayer money, Loria responded with payrolls last or second-to-last in three of the stadium's first four seasons.
As a result, purchasing the Miami Marlins seems like a poor use of $1.2 billion. The Marlins have drawn more than 2 million fans in a season just twice after their inaugural 1993 campaign, and just once in the past decade, when they opened taxpayer-funded Marlins Park in 2012. The team is stuck in a low-paying cable contract and nets poor ratings compared to the rest of Major League Baseball. Miami is a big city, but Marlins revenues aren't great compared to the rest of baseball.
So what makes a billion dollar sale not just another boondoggle at the hands of Loria? What can new owners do to reverse the course of the franchise and translate success to owners and fans alike?
The easy solution is to spend more.
In looking at the financial success of a team, winning is incredibly important, and despite some lessening of the relationship in recent years, payroll is important to winning. The only year the Marlins opened the season with more than a $100 million payroll, which is now a below-average figure, was 2012, when the new stadium opened, but the team slashed more than $10 million in payroll during the season, finishing below the $100 million mark. The Marlins have never spent anywhere near a level in which sustained success is a reasonable expectation.
The three biggest factors when it comes to payroll, and some of these are interconnected, are wins, attendance and market size. The Marlins have consistently lacked the first two, and although Miami is a big market, transplants prevent fandom from taking root, and South Florida has considerably more entertainment options -- factors that prevent the Miami market being truly reflective of its size. That's a convenient excuse, although it does have some logic to it. On the other hand, the Marlins haven't tried building a consistent winner that might grow their audience.
Fans generally support winning teams, but it usually takes a season for that effect to be realized. A winning season is more likely to affect attendance the following year than it is in the year it takes place. This makes some sense. Season-ticket holders make decisions in the offseason, and if a team succeeded the previous year, fans will buy the tickets believing they will see a winner.
Consider the last two small-market World Series runner-ups in Cleveland and Kansas City. In the year during which those teams made the World Series, they both had modest attendance increases, around 200,000 fans each. After the Royals lost the 2014 World Series, the team gained 750,000 fans in 2015. After winning the World Series in 2015, the Royals' attendance dropped slightly during a poor 2016 season, but they still drew almost 2.6 million fans.
So far this year, Cleveland has drawn 6,000 more fans per game than a year ago, putting the team on pace for an increase close to half a million fans this season. Both of those teams also reinvested expected gains in the team by making increases to payroll, which is something the Marlins never did after their World Series win in 1997 or 2003.
Since 2003, World Series winners on average increased payroll by $9 million the following year, but that understates the effect a bit because the average payroll for the winning teams was $127 million to start with, close to three times the Marlins' $45 million payroll in 2003 and two and a half times the Marlins' $50 million average payroll since then.
After their 2003 World Series win, the Marlins let Ivan Rodriguez, Braden Looper and Ugueth Urbina leave via free agency and traded Derrek Lee and Juan Encarnacion, entering the 2004 season with a payroll smaller than the previous season. Then, despite being within shouting distance of a playoff spot in 2004, they moved Hee-Seop Choi (obtained for Lee) and Brad Penny. This came in a season when the Marlins received that World Series attendance bump of more than 400,000 fans. Payroll increased modestly in 2005, though it was below 2003 levels, and the team's attendance went up another 100,000. Ahead of 2006, the Marlins dropped their Opening Day payroll below $15 million, and attendance and wins dropped as well.
Fast forward six seasons, during which the Marlins were bad and attendance was bad, but the city of Miami and Miami-Dade County had ponied up hundreds of millions of dollars for a ballpark the Marlins claimed they needed to compete. The team seemingly increased the resources, bumping up payroll to $112 million by signing Jose Reyes, Mark Buehrle, Omar Infante and Heath Bell to multiyear deals to pair with Hanley Ramirez, Josh Johnson and Giancarlo Stanton.
The season got off to a poor start in fan relations when manager Ozzie Guillen made comments sympathetic to Fidel Castro. On the field, the team stumbled. At the gate, the team was still doing pretty well with a 45 percent overall increase in attendance over 2011 despite the slow start, the midseason trade of Ramirez and a drop in second-half attendance. After the season, they moved Reyes, Johnson and Buehrle without replacing their production and cut payroll in half, providing no reasonable expectation for winning. The Marlins have averaged 90 losses per season in their new ballpark, but those five seasons have been the most-attended consecutive five years since Loria took over.
All those negatives that come with buying the Marlins now aren't necessarily permanent. Miami's attendance hasn't been great of late, but it hasn't been awful. Attendance is actually up in the early going this season by about 2,000 fans per game, but they haven't provided fans with wins to draw crowds. Miami's market might be a bit fractured, but it is still sizeable, and Marlins games generated the highest cable prime-time audiences in Miami last season. That television deal isn't a good one, but it runs out in 2020, one year before the national television deals run out, and even if cable money stagnates, the team will still end up with a better deal than the one that is paying it roughly $20 million a season now. Naming rights for Marlins Park could add more revenue.
In the front office, the team has been run by Loria's former stepson, David Samson, since Loria purchased the team, so getting a new voice at the top should prove beneficial. The Marlins fell behind in analytics, but did finally hire Jason Pare a year ago to help them catch up. The farm system is in bad shape -- Keith Law ranks it 29th out of 30 -- as the team has let financial decisions get in the way of baseball decisions. The Marlins have twice traded away competitive balance picks in the MLB draft for little return, and have likely gotten less in trades over the past few years due to insisting teams either take on the contracts of players leaving (such as Reyes and Buehrle) or pay part of the contracts for players coming (such as Dee Gordon and Dan Haren).
The Marlins have won before, but they've never sustained that success. They've got a new stadium, but never provided a winning team to draw fans. Despite appearances of increased spending, the team has consistently remained near the bottom of the league when it comes to payroll. While there have been questions going back decades regarding Miami's viability as a market for baseball, we are now in the 25th year of the team's existence, and whatever market is there remains untapped.
Providing a winner in a nice, new stadium and reinvesting in the team is a winning formula for sustaining a fan base, and it is unfortunately something the Marlins have never tried.
Perhaps new owners, whoever they are, given a fresh start in Miami, will be able to grow the game in a market that hasn't been given a fair shot.