by Tim Berger

December 6th, 2012

“Just like the fans in south Florida, I was lied to on multiple occasions.”
- Mark Buehrle, following November 13th trade to the Toronto Blue Jays [1]

“Speaking for myself, I’m not aware of any assurances. I will tell you if they came from me they would be in writing in a no-trade clause.”
- Larry Beinfast, Miami Marlins President of Baseball Operations [2]

People seem to forget that baseball, like all sports, is a business first and a game second. Don’t believe me? Ask the people running these franchises in the front office. The surprising (yet unsurprising) recent trade between the Miami Marlins and the Toronto Blue Jays should not be seen as a coup, or a blockbuster, but merely a response to a disappointing season. Make no mistake, however: nothing about this trade was purely reactionary. What is being disguised as a “salary dump” is actually a heist whose effects will ripple through the industry. Despite building a large, state-of-the-art new ballpark — baseball’s first truly “modern” stadium — Marlins ownership and front office have lost face with their fans. After dispatching eight core players in five months, the media has disparaged or praised Loria for being devastatingly cruel or entirely brilliant. I’d posit both portraits are fair.

Marlins owner Jeffrey Loria.
(Walter Michot/Associated Press)

The way things came together, one could have simply followed the breadcrumbs. In March of this year, Marlins players, coaches, executives and fans all had high hopes for the season. The Marlins were on the receiving end of approximately $300 million in revenue sharing between 2002 and 2010. The Major League Baseball Players Association (MLBPA) had threatened a formal grievance and later convinced the club to spend all of its revenue-sharing proceeds on player development and salaries for the next three seasons (2010-2012).[3] With a new (mostly publicly funded) stadium, three All-Star-caliber offseason signings (Buehrle, Jose Reyes and Heath Bell) and a new name and uniforms, the franchise appeared headed in the right direction.[4] The spend, win, and trade eras of the past (see 1997 World Series champions under Wayne Huizenga and 2003 World Series champions under Loria) appeared over given the long term deals the Marlins were willing to agree to.[5] The rash of spending by owner Loria was heralded as the dawn of a new era and a sign that he had turned the corner as an executive.

Loria Tears It Down

Ninety-three losses, a last place finish, and eight months later, Loria found himself sitting alone at the MLB Winter Executive meetings in Chicago, an outcast among his peers.[6] The 2012 Marlins were a certified disaster. Reyes failed to match his previous season’s performance (in which he posted a .337/.384/.493 slash line) posting an OPS (On-Base-Percentage + Slugging Percentage) nearly 100 points lower than in 2011. Johnson pitched relatively well but did not measure up to his “ace” billing, finishing with a 3.81 ERA.[7] Buehrle arguably performed to his contract, posting his 12th consecutive season of over 200 innings pitched in addition to a respectable 3.74 ERA and his 4th straight Gold Glove.[8]

On June 3rd, the Marlins had a respectable 31-23 record. From there they hit the skids and went on to lose 19 of their next 24 games. The Marlins treaded water for the next two weeks and Loria decided to shut it down. On July 23rd, he traded away infielder Omar Infante and starting pitcher Anibel Sanchez (making $4M and $8M respectively in 2012, with Infante under contract for 2013 – $4M – and Sanchez up for free agency at the end of the 2012 season) to the eventual American League champion Detroit Tigers for prospects.[9] Two days later, they shipped away third baseman Hanley Ramirez (due over $32 million over the next two seasons) to the Dodgers, also for prospects.[10]

Since the 2012 All-Star break, the Marlins’ front office has traded away the face of their franchise (Ramirez), ace pitcher (Josh Johnson), and three major free agent signings made prior to the 2012 season (Reyes, Buehrle and Bell).[11] Buehrle and Reyes won’t get anywhere by whining. If their agents had simply demanded no-trade clause protection (like many agents whose clients seek long term deals do) they would have been able to veto this kind of deal. However, the complaints of baseball players pale in comparison to the spillover effect this industry-shaking deal will have going forward.

With their agreement with the MLBPA over, Loria and Samson stripped the team of all major salaries and filled up the organization’s prospect pool once again. Current contract obligations for the Marlins, not including upcoming arbitration cases, total a mere $22 million in 2013 and only $4 million in 2014.[12] The Marlins, sitting in a subprime baseball market without a core fanbase to speak of, will reap the rewards from MLB’s revenue sharing program yet again. This includes proceeds from an 8-year, $5.6 billion deal that MLB signed with ESPN in August.[13]

Implications Extend Beyond Miami

While Jeffrey Loria, David Samson (President), and Larry Beinfest will see their bottom line increase and continue to enjoy their brand new ballpark, repercussions from this deal will be felt further down the line. Media members have speculated that this may seriously affect aggressive owners who hoped to leverage their team against a new stadium using public money.[14] Cities often end up being the primary payer of such stadium deals, with only a few exceptions.[15] City and county officials may (and should) be more hesitant in securing loans for stadiums in the future if they fear team owners will refuse to field a competitive club in favor of their own bank accounts.

Additionally, under the new CBA’s revenue sharing agreement, the commissioner may consider imposing penalties for teams who do not use those proceeds to specifically improve club performance. This means Loria and Samson may not be able to satisfy major debt obligations, like the one the team owes to pay for their part of the stadium, using revenue sharing proceeds that the Marlins will benefit from in years to come.[16]

The convoluted MLB revenue sharing provisions in the CBA include adjustments in revenue sharing based on a stated “performance factor” of each individual club. In 2012, the Marlins ranked 26th in performance factor and will be slotted 20th for the upcoming 2013 season.[17] What this means is the Marlins will continue to reap the benefits of revenue sharing under the new CBA where protective provisions fail to exist when team executives and owners unload massive salary obligations in trades such as the one that Loria and Samson recently pulled off.

So What?

In the end, the opera Samson and Loria orchestrated still fits within the system protected by Commissioner Bud Selig and the MLB Collective Bargaining Agreement. They still get their $70-80 million before selling a single ticket, only to be increased in 2014 by the new TV deal with ESPN.[18] The current CBA expires after the 2016 season and one can only guess at topics likely to be covered four years from now. Revenue sharing and stadium capitalization under the next agreement should be looked at closely. Perhaps more importantly, Selig is scheduled to step down as commissioner next year, marking the end of a 20-year era which has seen the league add 20 new stadiums, most of which were heavily funded by city taxpayers.