Wednesday, November 14, 2012

More on the Miami Marlins Mess .... In Terms of Stadium Subsidies

Earlier today, Warren Zola posted an excellent blog entry about how Miami Marlins owner Jeffrey Loria has attempted to trade five of the team's highest paid players to the Toronto Blue Jays, and why Commissioner Selig should possibly get involved to stop this.  As he astutely pointed out, the trade is in many ways more troublesome by the fact it comes just one year after the Marlins opened a new, publicly funded stadium.

I have repeatedly criticized Miami Dade County for handing the Marlins ownership $357 Million in taxpayer money without any strings attached (my 2008 law review article on the issue is here).  The thrust of my argument was that the $357 Million subsidy provided "more pork to the fattest pig in town,"  and that team-owner Jeffrey Loria's promise to begin investing in players upon receiving the stadium would be short-lived.
Unfortunately, these fears have proved accurate.  The Marlins have once again traded away their players and have left the city with one of the lowest payrolls in baseball -- even after receiving huge public subsidies.  Most likely, ownership will next seek to sell the team at a huge profit -- not because Marlins brand equity has increased, but because the owners now control a highly lucrative public asset in their publicly-funded stadium.
It is not difficult to understand why some residents of Miami-Dade County may have wanted a new stadium for their baseball team.  The old one was past its prime.  However, a more sensible approach, if feasible, would have been for the city to have bought the team (this would have likely cost no more than $500-600 Million), rather than purchased an asset for Mr. Loria at nearly this cost and simply handed it over to an owner as a 'gift'. 
In the traditional business setting, when investors put money into a business they demand both a share of the business's profits and some level of control.  Astoundingly, Miami-Dade County neither asked nor received either.  The result: clearly bad for both fans and taxpayers.
Moreover, the Marlins mess is not only bad for baseball fans and taxpayers.  In the long run, it may also hurt the lobbying efforts of Major League baseball's other 29 teams.  While many municipalities have historically provided public subsidies to their baseball teams, the mockery that Jeffrey Loria has now made out of sports stadium subsidies may finally be enough to make some communities skeptical of theses giving gifts, without strings, to team owners.   In other words, if there is ever going to be a counter-movement against sports stadium subsidies, the Marlins stadium deal currently stands as a bold, Exhibit A.
* * *
For a more in-depth view of the issues surrounding sports stadium subsidies, please see the following resources