Jon Heyman of FanRag sports has obtained an “investment teaser” sent out by the Miami Marlins new ownership group in order to attract new investors for the team. Heyman reports that owners Bruce Sherman and Derek Jeter are seeking $250 million in new investment. This for a team they just bought for over a billion dollars and which they’re on record saying is a money-losing venture as currently constructed.
Some teams like the Mets have sought minority investment in the past, but that has usually come in the wake of financial setbacks. We’re just a couple of months out from this deal closing — the new bosses haven’t presided over a single Marlins baseball game as owners — and they’re already looking into fresh investment. Heyman speculates as to the prudence of the investment solicitation, noting that it just may be a means of raising needed cash and making life more comfortable for the owners. He also notes its irregularity, and suggests that perhaps the new owners are too stretched right out of the gate. As noted, the team is allegedly losing money and a solid third of that billion dollar sale price was financed with debt.
I don’t know. I find it hard to understand how most teams are worth what they’re supposed to be worth given where revenues are. The game is healthy — and I suspect the Marlins claims of losing money are based on a lot of creative bookkeeping — but not “30, individual billion dollar entities” healthy. New owners like Jeter and Sherman seem to be buying into a bubble built on cable television revenues or, in some cases, the mere possibility of them in the future, and for a lot of reasons that’s not sustainable.
Where does that leave us? With an ownership group that has to pay off a billion investment with heavy debt service and, even if they get an influx of investor cash, a need to pay off the new investors, because they aren’t likely to do it for season tickets alone. Cash flow is tight enough to where the club needs to sell off its stars like Giancarlo Stanton and, probably, stars who make way less than him.
All of it might make a lot of sense as some sophisticated investment vehicle I never could quite understand, but I question how it makes sense as a dang baseball team.