Former Marlins owner Jeffrey Loria has claimed a $141 million loss on the $1.2 billion sale of the Miami baseball team, a claim that nullifies a profit-sharing agreement with Little Havana (Miami) and Miami-Dade County; the entities responsible for financing most of the development associated with the construction of Marlins Stadium. A 2009 financing agreement between the City, County & Loria required the wealthy art dealer to return 5% of the sales’ proceeds (less deductions) to the local governments, in the event he sold the team within 10 years. However, Loria’s accountants have provided documentation claiming $0 in net proceeds after deducting $280 million in debt, $297 million in income tax on the sale, $375 million in franchise value appreciation and $30 million in advisor fees. Miami-Dade Mayor Carlos Gimenez says the County will contest the accounting, as it considers legal action to recoup a portion of the proceeds. Gimenez estimates Loria placed “hundreds of millions in (to) his pocket.”
Howie Long-Short: Loria’s claim that he failed to profit on the sale of a franchise that sold for +/- $1 billion more than he bought it for ($159 million) is laughable, but South Florida politicians (see: former Mayor Carlos Alvarez, Gimenez gained popularity opposing the project) agreed to a terrible deal. Miami-Dade County agreed to pay $347 million, of the $515 million required, for the ballpark’s construction; while the City added $13 million in taxes, $10 million to destroy the Orange Bowl and another $94 million to construct a parking structure. The deal also allows for Loria to claim $50 million that had been previously set aside for the County and City (if Jeter’s group doesn’t claim it by October). Miami & Miami-Dade County have 30 days to protest the profit estimates.
Fan Marino: It doesn’t appear that Miami or Miami-Dade County are going to get any money back from Loria, but at least they’ll be getting an MLS franchise. The city was awarded MLS’ 25th franchise last week. The ownership group is being fronted by David Beckham, but backed by a group that includes Jorge Mas; the best choice for Marlins ownership. The team will play in a 25,000-seat privately-financed new stadium.
Want more JohnWallStreet? To join our free daily email newsletter list, sign-up here!