The U.S. Securities and Exchange Commission has opened an investigation into the deal made between the Miami (neé Florida) Marlins, the city of Miami and Miami-Dade County for the building of the Marlins new stadium.

In short, the deal called for the city and county to pay for 80 percent of the new stadium through $500 million in bond sales. By the time the bonds are paid off, the city and county will have paid $2.4 billion over 40 years for the new stadium, with the Marlins paying less than $200 million.

At the time, the Marlins claimed they were breaking even and couldn’t afford a new stadium. However, when the Marlins financial documents were leaked on Deadspin.com, it painted a different picture.

[for a more in-depth look at how the Marlins played the system, read THIS and THIS by Jeff Passan of Yahoo! Sports]

So, how does this impact the Rays?

The Rays want/need a new stadium. And back in 2007, when the Rays proposed the waterfront ballpark, the Rays were expected to contribute $150 million of the approximately $400 million for the new stadium.

That was a lot considering that in 2008, Matt Silverman said the Rays were losing money (his exact words were “we’re cash-flow negative”). And earlier this year, Stuart Sternberg said, “[the Rays] can’t lose money year in and year out, hand over fist.”  But like the Marlins, the Deadspin.com docs showed the Rays were actually turning a profit.

When it comes to finally getting a new stadium, we have seen glimmers of hope for the Rays in recent months. If the Rays could somehow convince the city of St. Pete to let the team move across the bay, Hillsborough County and the city of Tampa may be willing to fork over some money for a new stadium.

But now, if that ever does happen, the city and county are going to want proof that the Rays can’t afford to contribute more to the cost. And to do that, the Rays will have to open their books. And that is just not going to happen. Even if Stuart Sternberg was willing, Major League Baseball won’t allow it.

In the end, Miami-Dade County and the City of Miami may have gotten swindled into paying $2.4 billion for a stadium at a time when the city is “working so hard to get back on its feet financially.” And now, the Marlins will receive almost all of the revenues, including non-baseball events.

Now that the SEC is investigating the deal, you can be sure that the people of both Tampa and St. Pete are going to make sure the same doesn’t happen to them. And that means the hopes for a new stadium just took a big hit. And if there is no stadium, the Rays will be gone, one way, or another.

 
 

22 Comments

  1. GeneralAntilles says:

    Why, exactly, should taxpayers be financing playgrounds for millionaires? Particularly when the MLB is stuck in the 1950s and so acutely fan-hostile.

    It’s been amply demonstrated that municipalities and their taxpayers who back big stadiums always lose. The Rays have got a perfectly good one they’re on contract for. Play ball or leave, but Sternberg needs to quit whining at the fans who finance his hobby.

    • Cork Gaines says:

      There is nothing wrong with what you are saying. It is a perfectly acceptable viewpoint to have. But understand, if a stadium doesn’t get built here, somebody else will offer to build one and the Rays WILL leave. And there are some that don’t want that to happen.

      • GeneralAntilles says:

        I don’t want the Rays to leave either. I like the team, I enjoy attending and watching games, and I like the community spirit it can generate.

        But is it really worth burdening the local economy and taxpayers with $500 million in bonds?

    • Sarah says:

      The idea of using public dollars that could go to improve schools or feed the poor to subsidize wealthy baseball team owners troubles me, too.

      But Tropicana Field, while adequate today, will be badly dated in 10 years, and it hasn’t succeeded in attracting fans. So saying to the Rays, “just play at the Trop or leave the region” is in essence accepting the fact that they will leave.

      But on a more positive note, there are many ways to structure deals for stadiums, with some combination of contributions from team owners; local, county, and state government; and other private investment dollars. The Miami stadium deal is talked about because it is such an egregious example of a case where the public sector negotiated poorly and got screwed. I would join you in opposing a stadium deal in our region if it were as poorly conceived as that one, but I believe it’s possible to find a way to finance a stadium that more fairly shares the costs and benefits.

      If the Rays ownership were to reject a deal that fairly shared costs and benefits then I would wish them luck elsewhere. But no one has approached them with a plan, so we don’t know. The one stadium plan they floated (the sailboat stadium) did include some of their own money, so unless they’ve completely soured on this area I’d imagine they would still be prepared to make an investment.

      • GeneralAntilles says:

        Forget schools and ‘feeding’ the poor (there aint nobody going hungry in St. Pete except by their own choice). That’s money that’s coming out of local business and directly affecting employment and prosperity.

      • Joe says:

        How is something….ANYTHING that is built and FINISHED in 1991, YES, 1991 considered antiquated and outdated?! If you substitute the word “school” for “stadium” and looked at the Trop that way, then you or anyone will see how ludicrous this debate is.

        It’s a greed grab folks. But that is how the game is going to be played, and I know this. But keep that in mind. If you think the Trop is antiquated, NO ONE held a gun to MLB to sign the lease and award the franchise in 95, although again, there was so much litigation MLB was forced. But having said that, how much does MLB owe the area?! I say A LOT MORE!

    • ttnorm says:

      You don’t buy it for the athletes, you buy it for the residents.

  2. Martin B says:

    So, what’s going to happen? Another city will get swindled by a MLB team, or will the Rays be zapped out of existence.

    The correct answer is neither. If Tampa/St. Pete are smart enough to see that pro teams are swindling the public, why do you think other cities aren’t smart enough to see it?

    The union won’t allow contraction.

    So, neither is actually going to happen anytime soon.

    • Cork Gaines says:

      Because a city can only really be swindled if they are the one with the team and a stadium and are being blackmailed into paying for a new park.

      If another city is in a better economic climate and is desperate enough to be a “major league city” they may not care that the Rays or another team can actually afford to pay for a new stadium.

  3. Cork Gaines says:

    I should add: this doesn’t necessarily mean that the Rays are trying to swindle anybody. Maybe they are, maybe they aren’t. I don’t know. What somebody can or cannot afford is a fairly subjective concept. Maybe the Marlins really thought they couldn’t afford a new stadium.

    But what is important here is that the Marlins situation is going to scare the local politicians and the taxpayers. Many will assume the worst.

  4. Dax says:

    I live in St Pete and love baseball but we are losing the Rays and deserve to. The only way that St Pete can afford baseball is with a local owner who is committed to the city and we don’t have that. We live in a capitalist society and GeneralAntilles speaks for the community well. They like baseball and prefer that it be here but won’t pay for it – either in community funding or buying tickets. This community does not deserve to have a baseball team and will lose it within 4 years. That’s life.

    • Martin B says:

      I would take the bet that the Rays are still playing here in 4 years.

      1) There is no other city they can move to where there is already a stadium they can move into, getting one constructed and built “on-spec” isn’t going to happen in any city in the country.

      2) The labor deal is for 5 years. They’re not going to contract a team without a new labor deal.

    • Steve says:

      My question is where are the Rays going to move to? Is it possible that the Tampa Bay area is just the worst market for drawing baseball crowds right now? That doesn’t mean that if they pick up and move to Charlotte, San Antonio, Nashville or wherever that they would draw more fans. Bottom line is the Rays ARE making money and the owners are trying to scare locals into financing a stadium by hinting at the dooms day scenario of the team leaving the area, just like the Glaziers did. The Rays aren’t leaving the area, and just like always their billionaire owners will eventually cry their way into a new publically financed stadium and leave the bill at the foot at the working class. God bless America.

    • GeneralAntilles says:

      It’s the economy, silly.

      Very few people can afford to take a family of four out to a ball game for $100+, fewer would want to when all the ownership and players can do it talk about how ungrateful the fans are and how much they hate their stadium and the town it’s in.

      The sweetheart stadium

      • GeneralAntilles says:

        SIlly phone. Accidentally tapped Submit.

        The sweetheart stadium deals, the other public funds in pro sports and MLB’s virtual monopoly on baseball all severely distort real market signals. Unfortunately this seems to be getting worse instead of better.

  5. Joe says:

    Fascinating discussion. I think this makes the Rays out to be hypocritical here.

    We don’t have any idea what a final cost estimate is to build a ballpark, let alone where the site is and any court battles that have to be won/lost in order to get a shovel into the ground.

    Even if we get to the VERY END, how competitve will the tickets and pricing be in a new park?

    I have been extremely upset on how the Bay area has been treated not only on a national level, but by LOCAL people as well, which is shocking to me. You got a lot of agendas and political plays at work here.

    To me, Stu should stand up, make his feelings known NOW, does he love the Bay area and the quality of life? Why doesn’t Bud Selig do a magnaminous gesture, acknowledge that the City of St. Petersburg and Tampa Bay as a whole have been leveraged to build or sweeten deals for franchises in Minnesota, Texas, Chicago south side, San Francisco, Seattle as well as the two expansion franchises in Denver and Miami. That is 7 out of 30 if you include St. Pete in itself that is 8 out of 30 times the Bay area HAS BEEN USED AS LEVERAGE!

    I believe MLB should come to the table, do what happened in the Cleveland Brown franchise fiasco in 1996 and build a true partnership with the Bay area on BOTH sides. The 30 owners should put aside $3-5 million a piece for a stadium fund for team like the Rays so that a community doesn’t have to be THREATENED to build something!

    This discussion is going NOWHERE FAST. The economy continues to suffer in the area, and people are living paycheck to paycheck while hoping for breaks. I am tired of the hypocrites, that especially are some of the ones that are supposedly some of the biggest “fans” of the area!

  6. Joe says:

    The situation in Miami will EMBOLDEN local politicians to stand firm and ILLUSTRATE what kind of profits are the Rays truly making? This is the crux of the situation. How can Stu Sternberg say with a straight face he is losing gobs of money?! How can this be a justifiable position? And maybe its a bad thing because this again turns the conversation from a stadium conversation to a baseball revenues conversation, which I will argue about to the cows come home. I think fans as a whole everywhere take it on the chin!

  7. zenny says:

    The Bucs have swindled Tampa (and Hillsborough County) pretty good already. Only so much blood in the sugarcube, imo.

  8. Tom says:

    I think the situation with the Marlins may help Rays Fans. If the Marlins screwed the taxpayers this means other cities are less likely to build a stadium for the Rays and the Rays are more likely to stay in the stadium they have.

  9. Don says:

    “Even if Miami isn’t exactly a baseball town – the Marlins are behind the Dolphins and Heat in popularity – Samson believes the new stadium on the old Orange Bowl site will expand the team’s season-ticket base from around 5,000 to 15,000 or 20,000. If-you-build-it-they-will-come is nothing more than a myth, proven false by Pittsburgh and Washington and Cincinnati. quote “THIS & THIS”
    Lets build a stadium in(football) Tampa and they will come……wanna bet?

  10. s says:

    cork,
    maybe swindled is a harsh word, but once again what effort are the rays making to improve attendance or their fan situation? they’re doing nothing to help themselves other than being extortionists and whiners.

    if they want to build a fanbase, then you have to start with families and retirees. let’s be honest, that’s where you loyal fanbase is going to be in this area. look at the prices of the upper level and outfield season seat for the rays. these are the seats that are going to be the most attractive to the people on a budget and the ones needed to actually improve attendance.

    like i’ve said before, look at what the dodgers are doing to improve their season ticket sales. look at where their prices are for their blue collar seats. they completely blow away the prices for the rays. upper level and outfield season seats are pretty much double for a rays game vs a dodger game. hell you can just about get all you can eat outfield seats in LA for a regular seat in the outfield in the trop.

    so to hear stu and company whine over and over, then let them address this. the cheap seats in LA should be a hell of a lot cheaper than the cheap seats at the trop. that’s the stupidest marketing for building a fanbase on the planet.

    swindlers, nah fibbers is probably a better description, take a look at the links and tell me how they really give a crap about putting butts in the seats.

    http://losangeles.dodgers.mlb.com/la/ticketing/season.jsp

    http://tampabay.rays.mlb.com/tb/ticketing/season_tickets.jsp#pricing

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