The Marlins, a classified "poor" team generated $36M of revenue last year. While they've experienced some losses during the past five years, in the end, the Phish still came out $44M in the black. This year, management slashed payroll even further (with the loss of Cabrera and Willis) to $21M from $30M last year. By offering Hanley Ramirez (who could be better than A-Rod one day) a contract with an AAV of $11.67M, the Marlins would increase their payroll by $11.2M ($11.67M - $467K 2008 salary) to $32M. If attendance, TV revenue, and revenue sharing remain the same, the Marlins are still very healthy financially. However, with the new ballpark expected to be ready by 2012-ish, the Marlins can backload the contract so the additional revenue created by the new ballpark will offset the pay-raise at the end of the contract. In the first three years of the contract, the Marlins could pay $4-5M/year. Therefore, team payroll would only increase slightly. And, if the new ballpark falls through, the Marlins could always trade Ramirez (and his market friendly contract) to a mid/big market team.
The Marlins utilized this approach when they were courting Carlos Delgado a few years ago. Here is the structure of Delgado's 4 year-$52M contract:
- 2005: $4M
- 2006: $13.5M
- 2007: $14.5M
- 2008: $16M
- 2009: $16M option, $4M buyout
When the stadium financing fell through at the end of 2005, the Marlins traded Delgado to the big market Mets following the 2005 season. The Marlins were able to escape the larger portions of the deal, though they had to pay the Mets $7M in the deal. I think a similar strategy is in order with the proposed Hanley Ramirez deal. But let's not be fooled; let the numbers (P&L statement) dictate spending, not the mouths of owners.
2 comments:
Tell that carpetbagger, Jeffrey Loria, to pony up the cash and quit dealing art.
Enjoyed your post and blog - I just wanted to add that the Ramirez contract does not kick in until 2009 [$5.5 in 2009 & $7.0 in 2010]. So these last 3 years before they begin seeing increased revenues from the new ballpark - even after the Ramirez signing - they will still be under their 2007 salary levels given the other current salaries - levels at which they pocketed all their revenue sharing [RS] monies.
We know that the Pirates will get $35 million in RS this year - under none of the criteria to determine the allocations of RS monies, would the Marlins receive less than the Pirates.
Think of it [3 years x $35 million] a $105 million gift from MLB - the Marlins are funding their stadium construction costs [$120 million] on the backs of the revenue sharing payer teams - monies which are intended to address the salary disparities created by local revenue disparities. The Marlins have not applied RS monies towards salaries since 2005!
Where is the Players Union on this issue? Where are the complaints from the RS payer teams?
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