This week Forbes magazine published its annual estimates of the value of each major league baseball franchise. The Yankees were in first place with a staggering estimated value of $1.2 billion, which represented a 17 percent increase over last year’s estimate.

2006 NL Rookie of the Year Hanley RamirezIn fact, all 30 teams increased in value over the past year, as baseball continues to rake in money at a tremendous rate thanks to new television deals, higher ticket prices, and increased ad revenue. Wheras as recently as three seasons ago the 30 teams combined to have an operating loss of $57 million, even before taxes, amortization, and depreciation were factored in, in 2006 the teams combined to have an alltime high operating revenue of $496 million.

Not surprisingly, at the very bottom of the list of teams in terms of estimated value of the franchise were the Florida Marlins at a mere $244 million. But amazingly, the Marlins led all 30 teams with an operating revenue of $43.3 million, whereas the Yankees were dead last with an operating loss of $25.2 million.

The reason for this of course is that the Yankees paid an estimated $70 million in luxury taxes for the 2006 season, and the Marlins received a good portion of that money. While I’m sure the Yankees don’t mind the loss so much, given that the value of their franchise as just increased by about $200 million in a single year (at least according to Forbes), how happy must the Marlins be? Given that their payroll last year was only $15 million – easily the lowest in baseball – that means that nearly about $30 million dollars is going directly into owner Jeffrey Loria’s pockets.

Now it would be one thing if the Marlins were just purposely fielding an uncompetitive team just to turn a profit, but this is not the case. Not only did the Marlins field an extremely talented squad last year that made a legitimate run at the playoffs, but their refusal to trade Dontrelle Willis and Miguel Cabrerra – the only two players on the team who actually make any money – shows that the Marlins actually do plan to try to win when the time is right.

Marlins ace Dontrelle WillisAnd given that the Marlins have an ridiculous amount of talent, with a quality young player (or in some cases, two) at every position on the diamond, all of whom can reasonably be expected to improve over the next few years, as well as a talented young pitching staff, the time for the Marlins to go deep in the playoffs could come very, very soon. And given that the Marlins increasingly appear to be on track to get a new $500 million retractable-roof stadium in South Florida by 2009 or 2010, the Marlins will soon have a massive new revenue stream to sign some free agents to bolster any holes in their team.

So basically we have baseball’s most profitable team in possession of its most dazzling collection of young talent and about to get a new stadium. Looks to me like the Marlins are going places, and fast. As I’ve written in this space before, everyone criticized the Marlins for the two fire sales they’ve had after their two World Series championships, but given that the young players acquired in the first fire sale led directly to the second World Series crown, and this new crop of players seems likely to contend for another World Series title in the very near future, who’s to say that the Marlin Way isn’t the best way to go?

11 Responses to “Why the Marlins continue to be the smartest team in baseball…”

  1. Sarah Green says:

    Nick, this is silly. The Marlins have no fans. Why? Because the good people of Florida have no opportunity to get to know any of their heroes, because by the time the team is good enough to finally catch anyone’s eye, they’re on the other side of the Series and selling off any reasonably recognizable player. It’s like the guys in the front office are a bunch of geeks taking the team apart and putting it back together just to see if they can. I think Coley did that with a bike once. What’s okay for a ten-speed is not okay for a baseball team. In fact, it’s amoral and wrong.

  2. Nick Kapur says:

    They don’t sell off *every* recognizable player. Just the aging, overpriced, and over-valued veterans. This is why they kept young rising stars Dontrelle Willis and Miguel Cabrerra, despite the deluge of trade offers.

    That’s what is smart. Most World Series teams feel obligated to resign their most aged and declining veterans. But the Marlins start fresh so they can win again faster. They would not have won in 2003 if not for the 1997 fire sale, and the Marlins are second only to the Yankees in World Series titles the past 15 years.

    I mean, players move around so much now anyhow. The Dodgers have only a single player left on the roster from 2004! Only one! And that’s not really even that rare anymore.

    That’s why everyone was talking about how there will be no more Cal Ripken Jrs or Tony Gwynns staying with one team their whole careers anymore. Players are always jumping around these days. At least the Marlins get boatloads of hot prospects in exchange.

    The reason the Marlins have no fans is that their stadium completely sucks in every way. Sure, the fire sales don’t help with fan loyalty, but when they get a new stadium, I’m pretty sure they won’t have to have these fire sales anymore. But my point is that given the Major League’s worst revenue stream, the way the Marlins do it is the smart way. Their way is so much better than the Pirates of the late 1990s who had the league’s lowest payroll back then, but spent most of it on aging veterans like Pat Meares, Mike Benjamin, and Kevin Young. Those were “recognizable players” one and all, but youth is so much more exciting!

    What’s not to love about Hanley Ramirez, Miguel Cabrerra, Dan Uggla, Josh Willingham, Mike Jacobs, Dontrelle Willis, Josh Johnson, and Anibel Sanchez? I’m glad there is a team out there that is giving guys like these a chance to play rather than just blocking them with “experienced veterans” the way all the other teams would do.

  3. I totally agree. As a Marlins fan from Miami, I’m with their program. I think Beinfest does an EXCELLENT job of heading that organization and is a superb talent evaluator. He knows that you can consistently be competitive in baseball with good pitching and he is more than willing to give up over-valued vets for some good, young arms. As a REAL Marlins fan and a tremendous baseball fan, I have absolutely no problem with rebuilding every few years if I can have a legitimate shot to win a World Series every 5 years or so. I’ve already experienced TWO in my lifetime and there’s not a whole lot of people that can say that.

  4. Another reason the Marlins have a small fanbase is because here in Florida, there is little to no emphasis on Baseball. I was raised a football fan, and basically grew up thinking baseball wasn’t a sport. The only reason I follow it at all, nowadays, is because my girlfriend is from Boston.

    (Of course, the Marlins could try to appeal to more Cuban fans to solve that problem)

  5. I wish the Pirates would do this. Have a payroll of like 15 mill every year for about 4 years. That would be 30 mill from the luxury tax going into an account each year (earning interest even). Then the 5th year, spend the regular 15 mill PLUS that saved up 120 mill on payroll and win the world series. within a week after the season, completely dismantle the team and start the process over again. That way instead of soon to be 15 consecutive losing seasons, we’d have 12 losing seasons and three world championships.

  6. Yea, they could try to appeal to the Hispanic fans, in general, but they’d need to get off the Dade/Broward line at Dolphin Stadium. They could perhaps do that if they moved south but then they’d lose a lot of those richer Broward fans. Hard to say what would work.

    But yea, with So. Fla. sports it’s always tough. The fanbase is hard to tie down other than the Dolphins/Canes since there are so many distractions. It’s a beautiful city with beautiful women – why hang out in a fuckin’ stadium when you’ve got that all around you? haha

  7. Hey Nick, the Marlins haven’t traded Willis and Cabrera yet because they are still making little in terms of their value. Give it a year or two and Willis will be gone. And while that would be a huge blow, Willis leaving is ok. If they ever move Miguel Cabrera, they will have failed at life. That’s a very special player that doesn’t come around very often.

    Just like Hanley, Hermida, Willingham, Sanchez and Olsen. They won’t be making major dollars for another 3-4 years, thats why they won’t be going anywhere either.

    Now imagine if the Marlins had a decent owner instead of a cheapskate. They could have a dynasty at somepoint, on their hands (atleast talent wise)

  8. A look at the Marlins attendance history, when adjusted for winning seasons, shows that the fire sales have had minimal impact on attendance. Which makes sense as the first one happened 5 years after the franchise’s birth and 2 years after building a competitive team. And the next one happened 2 years after their second championship and building of competitive clubs that failed to win or increase attendance.

  9. Adam, the Pirates do something similar to that. To date, the Pirates have been the only team to be found using net revenue sharing transfers (luxury tax goes towards league expenditures) towards purposes they were not intended for. McClatchey was paying down stadium debt with them. While it appears the Marlins are increasing their investment in scouting and development, both players and their new stadium.

  10. TV Ratings says:

    To let everyone know, there is a fan base for baseball in Miami, MLB wouldn’t be down here if there wasn’t. Just look to the TV ratings the Marlins are the top 10 at last check in ratings and that was last YEAR!!! Just b/c no one goes to the stadium doesn’t mean there aren’t fans.

  11. The actual location of the stadium IS a problem. As for trying to reach the Hispanic fans… it’s a tricky deal. Bear in mind Miami is a town that’s all about bandwagon jumping. It took Shaq to actually fill up the AA during the regular season. The year before his arrival, when Lamar Odom, Caron Butler, Damon Jones and rookie Dwayne Wade made it to the second round of the playoffs? You could still find empty seats at the home games.

    Also, this town is all about seeing and being seen. If you want to see some jaw-dropping babes at a sports venue you just have to hang around Bayside Marketplace after a Heat playoff game. The sport becomes an event, one that leads to subsequent fine dining, cubs and bars. Dolphin Stadium’s location prevents you from doing all that, there’s no place worth going in the vicinity.

    My solution? Do some serious ass, Netherlands-caliber hydraulic engineering and build on land reclaimed from the sea, smack in the middle of friggin’ South Beach! Connect the ball park to the mainland with a nice bridge/boardwalk/promenade. As it is right now, I attend 20 to 25 Marlins games a year. With my waterbound park? I WOULD MOVE THERE!

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