Like it or not, Loria playing by the rules

November, 14, 2012
11/14/12
12:35
PM ET
Miami Marlins owner Jeffrey Loria isn't a popular man today in Florida. He took $362 million in taxpayer funds, got a new stadium built despite any evidence of local support in the stands, and now is gutting the team.

It's easy to call Loria unfair, unethical and whole lot of other names that we won't publish here. The sad reality is that Loria is just doing what he's entitled to do or, as some might argue, what he's being tempted to do.

[+] EnlargeJeffrey Loria
Steve Mitchell/US PRESSWIRE Jeffrey Loria's Marlins went from contenders to pretenders in a hurry.
You see, we as fans rely on owners to represent our best interests. We want owners who are going to spend. We assume that they've already made their millions, sometimes billions, and that they're interested in winning over making money.

But if an owner is interested in making money over winning, baseball might be the best sport to do it in.

Let me explain.

There are two ways to make money. One is of the standard variety: Spend some money, win some games, draw a crowd.

The other way is the one the fans don't often think about: Take advantage of the system.

Sure, each NFL team got a $102.5 million check last year from the national TV deal, but there's nothing quite like Major League Baseball's revenue-sharing distribution, where money goes from the haves to the have-nots.

Despite the fact that there's no direct evidence that suggests the sport's strong parity had to do with better revenue distribution -- are the A's successful because of Billy Beane or because they get money from the Yankees? -- the sport's top brass have made that argument.

Although it might not be the most fair thing to do, the revenue sharing is getting even more drastic with the new collective bargaining agreement, as 15 teams in the top markets won't be allowed to essentially make themselves "have-nots" because they are being phased out of getting revenue-sharing distributions by 2016.

As you might have guessed, the Marlins are not included on this list.

So if Loria is interested in making money, what does he do?

Well, first he tries the traditional way. He gets a stadium built and goes nuts, having an Opening Day payroll of $101 million, the first time in team history that the $100 million mark was topped. Then he has optimistic projections. Marlins president David Samson told me that he was confident the team would get at least 30,000 fans per game. You run the numbers and you say, 'I can now be competitive and make money.'" That was the goal.

But then the team went 24 games under .500, and 72.8 percent of home games didn't reach that 30,000 fan mark.

So now how do you make money?

You do exactly what Loria did.

You gut the team, having the lowest payroll possible, and pull in tons of money on revenue sharing.

There are no rules against doing this because the league and the union assume that owners want to compete. If they don't, it blows everything out of the water (pun intended).

And for yet another collective bargaining agreement, there's no team payroll minimum, which on the surface is absurd. The reason? The union doesn't want to have a hard cap at the bottom since that would suggest a hard cap at the top and they'd rather just deal with an onerous luxury-tax threshold there. So Loria can play "payroll limbo" and go as low as he thinks he can possibly go, and then collect the checks from people who try.

I blame baseball for that.

I'm sure you're asking how I come off blaming the city and county for what Loria is doing.

Simple: They didn't put what they needed to put in writing.

As I've said before, using more money doesn't guarantee that you will win the World Series. But spending money at least says to the fans that you are trying.

In giving the money to the Marlins, the city of Miami and the county took care of the little things: Donate 10,000 tickets a year to charity and change the team name from "Florida" to "Miami," among them.

The city and county even put in how much they'd get if Loria sold the team within a certain period of time, a negotiated percentage that was ridiculously low anyway.

If Loria sold the team now, he'd owe the local governments 10 percent of the difference between what he'd sell the team for and a predetermined price of $250 million.

So let's say the Marlins sold for $400 million, a number surely boosted by the new stadium. Loria would have to pay only a $15 million penalty on the $150 million difference.

Let's get back to the point. The city didn't protect itself against a trade like this.

Shame on the lawyers who were paid by the city to negotiate this deal.

Knowing that a winning team fuels the economic engine, it was the city and county's responsibility to ask for a clause which stated that Loria would field a competitive team in good faith.

That's it. It's not a number he'd have to spend each year, it's just a general clause that would likely wind up in court anyway due to its ambiguous nature, but at least there would be a case.

At least there would be something to protect a community that had every right to be skeptical that this season would be different.

Now the city and county are left, if they choose to pursue legal action, with representations made by Loria both publicly and privately (where it can be proven) that show that entities were defrauded.

And the fans are left with no recourse after being left with a bunch of fish which will most likely stink.

Darren Rovell | email

ESPN.com Sports Business reporter

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