THE BUSINESS AND POLITICS OF SPORTS
(Cozumel, Mexico) – The woman sitting in the back on the cruise had a question during a Miami and the Super Bowl speech session last Friday. She wanted to know how the recently renamed Miami Marlins Major League Baseball franchise all of a sudden had money to spend on free agents players like Albert Pujols or Jose Reyes.
The Florida Marlins franchise was a cash poor business that got rid of high priced players while playing in a football stadium in Broward County despite winning two World Series. The revenue challenged organization now seems flush with cash after years of being revenue deprived. Now the franchise has more to pursue expensive free agents.
There is a simple answer to the woman’s query.
Miami residents and a significant number of tourists including those from the New York-New Jersey area are paying various tax levies that will go to pay for the construction of the Marlins new stadium and parking garages at the site of the old Orange Bowl. Miami is a city that does not seem able to afford to pay hundreds of millions of dollars for a baseball stadium and garage. And the city is on the hook to pay property taxes on the garages thanks to the deal cooked up with Jeffrey Loria, the New York art dealer who owns the Miami Marlins. The franchise will keep a lot of the money generated by the parking not the city. Just another perk for the team.
Downtown Miami near the Port of Miami and the Miami Heat’s arena is a rather interesting place. There are a quite a number of empty storefronts in the area and the high rise buildings loaded with condos have signs hanging from the sides of the buildings screaming about the availability of luxury housing in the downtown. Apparently you can get a place to live at 50 cents on the dollar at these buildings and some of the people who have bought condos are from Asia and South America (Argentina and Brazil) and might not be too interested in Marlins baseball. The weak American dollar has made the buildings attractive to foreigners. But the foreigners, too, are contributing dollars that will pad the Marlins’ bottom line.
The paradox is that Miami has money for sports, in this case for the financing of a stadium which is really a public park that cannot be used by local residents for activities. Yet the city might not have money for essential services.
But why be concerned with essential services in a bad economy in an area loaded with foreclosures and empty condos when you can get a Pujols or Reyes on the local Major League Baseball team thanks to public subsidies.
The stadium will be the “catalyst” be the “rebirth” of baseball in Miami and allow Marlins ownership to spend on players according to those in the know in baseball. Hundreds of millions of dollars being poured into a municipally-owned stadium with a financial contribution from the Marlins owner Loria that probably will give him a barrel filled with money from people who will never set foot inside the facility—tourists and local taxpayers—through increased revenue from concessions, parking and signage.
The city’s decision to fund the stadium did not go well with the community. The mayor, Carlos Alvarez, was recalled and lost in a landslide during a special election last March. Although there was a laundry list of complaints about Alvarez, the stadium expenditure seemed to be the most pressing grievance. The stadium for Loria means more money for his franchise, but it is pretty doubtful that Little Havana will see much of a positive economic impact from the Marlins’ new yard. Stadiums and arenas are not economic engines that can revitalize a city or a large area surrounding a facility.
Miami seemingly has found another "financial catalyst" if the Little Havana park fails, as there is some talk of building a casino and luxury hotel on the waterfront near the port although the plan has not been well received by city business leaders like Arison.