Report: Marlins, Loria have 'handshake agreement' to sell team for $1.6 billion
One small problem though: the buyer doesn't have enough cash on hand to complete the deal
Earlier this winter, word got out that Marlins owner Jeffrey Loria was willing to sell the team for $1.7 billion. I'm guessing several other owners would be willing to sell their clubs for a similar sum. Nothing wrong with being ambitious, right?
Well, according to Mike Ozanian of Forbes, the Marlins currently have a "handshake agreement" in place to sell the team for $1.6 billion. A sale does not appear to be imminent -- these things take time anyway -- and the Marlins have not yet commented on the report.
The Steven Wine of the Associated Press and Jon Heyman of Fan Rag Sports have also confirmed the report of a tentative agreement to sell the team. Darren Rovell of ESPN has reported that Charles Kushner is part of the group seeking to purchase the club. Kushner is the father-in-law to Ivanka Trump. His son, Jared Kushner, is a senior advisor to President Trump.
Here are six things to know about the Marlins reportedly having a "handshake agreement" in place to sell the team.
1. Loria purchased the team for $158.5 million in 2002
Loria, who owed the Expos from 1999-2002, purchased the Marlins as part of a series of transactions involving former commissioner Bud Selig and John Henry, who owned the Marlins at the time and currently owns the Red Sox.
As part of the deal, Loria sold the Expos to the other 29 MLB owners for $120 million -- the team was effectively run by the commissioner's office until the franchise moved to Washington to become the Nationals -- and purchased the Marlins from Henry for $158.5 million. That paved the way for Henry to purchase the Red Sox.
The series of transactions happened after MLB attempted to contract the Expos and Twins. Loria was sued by minority owners of the Expos and the case eventually went to arbitration. The panel sided with Loria and the transactions were completed. He outfoxed everyone, as our colleague Jonah Keri noted.
2. The Marlins are worth $675 million
According to Ozanian, the Marlins are currently worth $675 million. That, of course, does not mean they should sell for $675 million. Other factors like the ballpark, the television contract and future earning potential are considered when determining the final sale price.
The Dodgers sold for $2 billion in 2012, when Forbes valued the club at $1.4 billion. However, Frank McCourt, the team's previous owner, was heavily in debt and locked in a bitter divorce case that was draining money. There were extenuating circumstances with the sale of the Dodgers.
3. The new owner doesn't have enough cash on hand
The $1.6 billion sale of the Marlins cannot be completed right now because the prospective owner does not have enough cash on hand. Ozanian explains:
My sources would not say who the $1.6 billion handshake agreement was with other than he is a real estate developer based in New York City. The problem, according to these sources, is the potential buyer is not liquid, meaning he does not have the cash to buy the Marlins because his net worth is tied up in real estate. Thus, for the real estate developer to purchase the Marlins would likely require more debt than MLB would be comfortable with.
MLB has debt limits for their owners, and while new owners are given a grace period before meeting those limits, the league could still reject the sale if it's not comfortable with the financial details. Also, the new owner must be approved by the other 29 owners.
4. The Marlins have a new park and a soon-to-be expired television deal
As I said earlier, the ballpark and television contract also factor into any team's sale price. Marlins Park opened in 2012 and was built with hundreds of millions of dollars of taxpayer money, meaning the team's ballpark debt is relatively small. The new owner will like that.
The club's television contract with Fox Sports Florida is, frankly, terrible by today's standards. Their annual local television revenue is in the $20 million range. The Dodgers, on the other hand, signed a television deal worth nearly $300 million a year soon after their 2012 sale.
The good news is the Marlins' deal with Fox Sports Florida will expire following the 2020 season, which isn't that far away. The new owner will come in knowing his television revenue will undoubtedly increase dramatically after four seasons.
5. The Marlins don't have many long-term contracts
Player contracts absolutely matter in any potential team sale. The Marlins have one monster contract on the books, the 13-year deal worth $325 million they gave Giancarlo Stanton two years ago. Stanton is still owed $309.5 million through 2027, though he could opt out of the contract following the 2020 season.
Aside from Stanton, the team has long-term commitments to Dee Gordon ($46.7 million through 2020) and Christian Yelich ($46.75 million through 2021) and that's pretty much it. The team has a relatively clean slate financially, which any new owner would appreciate. Stanton is the only huge money deal on the books.
6. A new owner could be just what the Marlins need
Under Loria, the Marlins have consistently ranked near the bottom of the league in payroll and attendance. That's despite a new ballpark and MLB's revenue sharing system, which takes money from big market teams and gives it to small market teams.
A new owner could provide a nice boost to the franchise by infusing money into the team and appealing to fans. Let's face it, Loria is maybe the most disliked owner in sports. A new owner wouldn't have to try very hard to earn goodwill with the fans and help get the franchise on the right track.
CBS Sports HQ Daily Newsletter
Get the best highlights and stories - yeah, just the good stuff handpicked by our team to start your day.
Thanks for signing up!
Keep an eye on your inbox for the latest sports news.
There was an error processing your subscription.
They'll face the Indians in the ALDS
Plus the Rockies moved into wild-card position. Here's everything you need to know about Tuesday's...
The Giants aren't good anymore and now have lots of players in their 30s locked up long te...
Surgery was recommended earlier this month
Keep checking back for the latest rumors, firings and hires around the MLB managerial caro...
The Mets don't want to disrespect the integrity of the playoff race