An Aug. ‘17 document circulated by Derek Jeter, meant to solicit investment capital, projects a “cash-flow” profit of $68 million for the Miami Marlins in 2018; despite the team losing $50+ million last season. Entitled Project Wolverine, the plan assumes a rise in ticket sales (52% by ‘20), corporate sponsorships (117% by ‘21) and television rights (215% by ’22) that will give the franchise $10 million in profits in ’19, $15.8 million in ’20 and $22 million by ’21. Those appear to be pie-in-the-sky projections though, as the document assumed an immediate renegotiation of the television contract (with a $44.8 million up-front payment) and there are no indications FOXA (or soon to be rights holder, DIS) intends on renegotiating the contract prior to its 2020 expiration. The team currently has the lowest paying television contract in the league.
Howie Long-Short: After slashing payroll ($36 million thus far) and accounting for a one-time payment of $50 million, that each MLB team will receive in ’18 from the sale of BAMTech (to DIS), the team will turn a profit in ’18; it just won’t be anywhere close to $68 million. Without a revised television contract, the profit drops to $23 million. The document also assumes a player payroll of $100 million with pension payments (currently sits at $104 million without accounting for pension payments) and a $5 million/year stadium naming rights deal, which has yet to come to fruition.
Fan Marino: MLB accepted the Sherman/Jeter group’s $1.2 billion offer, despite knowing the group was paying an estimated $400 million more than the franchise is worth; and, $200 million more than the next highest bidder was willing to pay. The group will continue to cut payroll, so it can show a profitable business model and raise the $200 million they still seek to cover in debt and expenses. Somehow, there is still money for Jeter though; the team will pay him $5 million/year to act as the team’s CEO. No wonder Dan LeBatard got so heated!
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