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SEC Opens Investigation Into Marlins' Ballpark Deal With County, City
Published December 5, 2011
The SEC has "opened a wide-ranging investigation into the Miami Marlins’ controversial ballpark deal with Miami-Dade County and the city of Miami, demanding financial information underpinning nearly $500 million in bond sales as well as records of campaign contributions from the Marlins to local and state elected leaders," according to Rabin, Brannigan & Mazzei of the MIAMI HERALD. The SEC "gave the city and county until Jan. 6 to deliver everything from minutes of meetings between government leaders," Marlins Owner Jeffrey Loria and MLB Commissioner Bud Selig, to records of Marlins finances dating back to '07. The financing agreement to build the ballpark "left the county and city on the hook for almost 80 percent of the overall $634 million tab, which critics considered a giveaway to the Marlins." The subpoenas "focus heavily on the Marlins, requesting communications to and from team executives, documentation that might show the team’s ability to pay for or contribute to the financing of the stadium, and information on any meetings involving not only Loria and Selig," but also team President David Samson and former MLB President & COO Bob DuPuy, who "was instrumental at the latter end of the hard-fought deal" (MIAMI HERALD, 12/3). The Marlins in a statement said that they are "aware of the investigation." The statement read in part, "Of course we will fully cooperate with the SEC's investigation as needed and assist in whatever way possible." It is "not clear whether MLB has received subpoenas" (WALL STREET JOURNAL, 12/4).
WHAT TOOK SO LONG? YAHOO SPORTS' Jeff Passan wrote, "For two decades now, Major League Baseball has funded its rise from corporate slacker to gilded cash cow on the backs of taxpayers bullied into building new stadiums. It's a marvel the government took so long to sniff out the rot that emanates from these deals, though not much of a surprise that the Miami Marlins were the target when they did." Cities "kowtowing to those that want them to pay for stadiums is as commonplace as it is abhorrent," and the Marlins "pushed the limits on exactly how much a team can hold its city hostage" (SPORTS.YAHOO.com, 12/3). Miami Commissioner Francis Suarez worries that if the investigation finds wrongdoing "it could cost the city in different ways." Suarez: "Our ability to borrow money could be affected, our credit rating could change, and it could hurt financially if [we're] required to pay back-penalties or fees" (NBCMIAMI.com, 12/4).
FREE AGENT IMPACT: In Ft. Lauderdale, Juan Rodriguez noted the SEC probe "may not have a bearing from the club's standpoint, but whether it gives some free agents pause can't be discounted." They may now "have concerns about signing a long-term deal to play in Miami only to find themselves on the trading block after a couple of seasons if the result of the investigation [impacts] the franchise financially" (South Florida SUN-SENTINEL, 12/4). Marlins Senior VP/Communications & Broadcasting P.J. Loyello said in a text message, "It will have no affect whatsoever on our roster plans" (PALMBEACHPOST.com, 12/3).
IMAGE MAKEOVER: The Marlins this weekend signed free agents SS Jose Reyes and P Heath Bell, and in N.Y., Ken Belson on Saturday wrote under the header, "By Raising Roof, Marlins Hope Interest Will Follow." The Marlins will move into a new ballpark next season, but what is "truly getting everyone’s attention is that a team long associated with low payrolls and little inclination to pursue top-tier free agents suddenly seems inclined to spend money." It is "possible that the Marlins are talking to every prominent free agent just to drum up headlines and sell season tickets," and "plenty of teams have increased their payroll before moving into a new stadium only to reverse course a few seasons later." But the Marlins "may be serious about their change of image" (N.Y. TIMES, 12/3).