Should MLB Teams Disclose Financial Reports?

August 25, 2010 |

On Monday, the popular sports-tabloid website, Deadspin.com, released leaked financial records for a handful of Major League Baseball franchises. Among the collection of scripts, internal data regarding the Tampa Bay Rays, Florida Marlins, Pittsburgh Pirates and Los Angeles Angels were revealed for the cyber world to see.

Of the disseminated information, the documents regarding the Pirates and Marlins have gained the most scrutiny among the viewing public and media.

I have reviewed the documents, which can be found here …..

DEADSPIN DOCS

In being totally honest, I’ll assert that I can’t really form a distinguishable opinion by simply reviewing the slew of documents. It’s the kinda stuff accountants are paid to understand. But, some of the respective numbers are pretty daunting.

The documents reference an array of different revenue sources, including ticket sales, concessions, merchandising, broadcast yields and subsidization. The same documents also reveal information about expenditures, like travel, ballpark operations and salaries. However, some expenditures are attributed to complex debits, like salary payouts for past backloaded contracts.

Thus, I’m simply trusting the respected news sources who’ve broken things down for us …..

According to the Associated Press, the Pittsburgh Pirates netted $15 and $14 million profits, in 2007 and 2008, respectively. In fact, in 2008, ownership committed to paying out $20.4 million to partners. Yet, the franchise remains uncompetitive, while refusing to commit additional cash resources to one of baseball’s lowest payrolls.

ASSOCIATED PRESS ARTICLE

Aside from my disdain for the Steelers, part of me feels badly for Pittsburgh’s baseball fans. While I HATE anything black and gold, as well as that stupid “We Are Family” song, it’s a working class town and people deserve their money’s worth.

That said, I think it’s the burden of Pirates fans to collectively assemble and make a stance against the team’s ownership. Have you ever heard of such an innovative idea?
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As for the situation in South Florida, things are a little different. The Marlins have been much more competitive than the Pirates, and they have two World Championships within the last 13 years to show for it. Winning is proof.

That said, the Marlins consistently manage a very low payroll and seem to stay in the vicinity of .500 with prime young talent. They have not been a legitimate contender in the 7 years following their last World Championship.

Yet, Marlins owner, Jeffrey Luria, may have even dirtier hands than Pirates honcho, Robert Nutting …..

While Nutting can rightfully be compared to a thief who steals loyalty and hope from hardworking citizens, notable sources are suspicious that Loria mislead elected officials and constintuents when he poor-mouthed for a new stadium, in 2008.

The Marlins’ new home is slated to open for the start of the 2012 Major League Baseball season. Right now, it’s simply named “Miami Ballpark” …. which is nothing more than a generic code indicating Luria has not sold the naming rights, YET.

According to the Miami Herald, this situation could get very ugly over the next few weeks …..
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MIAMI HERALD ARTICLE
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Evidently, Jeffrey Luria and his cast of ownership minions used a manipulative strategy to gain public funding for the new stadium. Of course, they applied the usual strongarm tactics, like threatening to move the team, if the PEOPLE OF SOUTH FLORIDA did not foot the bill for the Marlins new home.
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During negotiations, Luria refused to open the Marlins’ books or provide any finiancial information regarding the team’s business practices. But, he leveraged and persuaded by insisting the team was going BROKE. Lawmakers bit on his story and the citizens are paying the bill.

However, the documents released earlier this week paint a much different picture of the Florida Marlins, circa 2008.

According to the Herald, the Marlins tallied a cool $38 million profit, in 2008. This was on the heels of a $48 million stimulus contribution to the franchise, thanks to Major League Baseball’s LUXURY TAX. So much for using those funds to build a better ballclub, huh?

Stay tuned to the situation in South Florida. As much as Bud Selig doesn’t want financial records shared with the public, his sport is quite possibly on the verge of its next scandal.

Speaking of Uncle Bud, I wonder if he’s going to take any action? Hmmm …. wait a minute ….

Bud Selig has access to the financial records of all the ballclubs. He’s also intimately aware of the specific payrolls of teams, right? Selig is on the record, numerous times, saying the LUXURY TAX exists as a means to fund the lesser competitive teams, and to help these same organizations in becoming competitive in challenging markets.

And, Bud Selig, must know the Pirates and Marlins are not using these subsidization funds for the purpose intended. Yet, the leaking of the records demonstrates that he has done nothing about it. Hey, if you don’t oppose something, you condone it right?

Add this situation to the mounting pile of embarrassments that have occured during Bud Selig’s watch as commissioner. And, we’re not talking about simple baseball issues, like All Star games THAT COUNT or slotting draft bonuses.

We’re talking about the greatest pitcher of the modern generation being indicted by Congress. We’re talking about players killing themselves in drunken driving accidents and pummeling in-laws outside the team’s lockerroom. What would Roger Goodell do with Francisco Rodriguez?

Now, we’re learning the needy franchises aren’t so needy, after all. And, it’s happened while this guy is steering the ship …..
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Bud Selig is the COMMISSIONER OF MAJOR LEAGUE BASEBALL. He is supposed to protect the sport’s integrity, image and reputation. Yet, he’s done everything but his job. He’s a failure, because he’s dishonest and obligated to a corrupt relationship with owners.

It’s impossible to be impartial when you’re on owner, yourself. When Bud Selig became commisioner, he owed LOTS of favors. You can bet on that. He has performed his job, while honoring favors and knowing plenty of skeletons could be revealed by those he served.

These are the distinguishing differences between Roger Goodell, David Stern and Selig. And, it’s exactly why the newly leaked financial records of Major League Baseball organizations are going to end up causing more problems for the game, itself.

Heck, Congress might end up getting involved in this situation, too. If this Florida Marlins situation grows legs, look out !!!! Whether you endorse governmental intervention or not, it’s obvious that some entity must be tasked with policing the game.

We’re not talking about simple strikezones or player conduct. Indeed, we’re dissecting the very sobering reality that Major League Baseball clubs are misappropriating MILLIONS of dollars. I’ll agree that Florida lawmakers should have insisted on seeing the Marlins’ financial records. But, their negligence does not excuse Luria from misleading them and lying about finances. This isn’t a poker game, in Vegas.

This is very real money. And, the public trust is at stake. Somebody must ensure the existence of an honest relationship between ballclubs and everyone else.

The commissioner isn’t doing it.

At this point, I think Bud Selig’s best gesture (outside of resigning) would be to bring a degree of transparency to the finances of ALL the ballclubs. Why? Well, we have every reason to believe malfeasance is afoot. And, aside from the worlds of pro rasslin’ and roller derby, we want to know our sports leagues are not riddled with impropriety.

Open the books, Bud.

For once, please do something pro-active ….. before this situation blows up in your face, as well.

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