Protecting local government interests: Jurisdictions at risk from slimy sports teams owners and the Miami Marlins as an example
Professional sports leagues control who owns teams. And the leagues and local team owners "gang up" against local jurisdictions in aiming to maximize the amount of government-provided monies for new stadiums and arenas.
If the team ownership group is flawed -- for example, yesterday's Washington Post has a nice column, "Boswell: Whatever Bryce Harper decides, the Washington Nationals played this right," about the difference in quality management and being principle-driven comparing the Washington Redskins football team and the Washington Nationals baseball team.
Granted neither team aims to leave any financial crumb on the table when it comes to their negotiating position with local and state governments, that being said, it's better to have "a public-private partnership" with a principled team and one that is managed well than an ownership group without principles and poorly managed team.
Just recognize that the government needs to protect its interests rather than expecting the team to do it for them.
The Miami Marlins are a good example of this. The team was owned by a guy with a bad reputation, first with the Montreal Expos, which he ended up selling to Major League Baseball--the team became the Washington Nationals, and in return was allowed to acquire the team in Miami.
Parsons, construction managers for the stadium.
Miami-Dade County, in return for money--about $500 million of a total cost of $600 million--for a new stadium, negotiated a 5% payment of "future profits" were the team to be sold before Spring 2018.
It was expected that the new stadium and retractable roof would lead to success on the field ("By Raising Roof, Marlins Hope Interest Will Follow," New York Times).
Instead, the team has had losing seasons every year since the new stadium opened. It's fair to say this is a better example of the fact that the quality of management is more important than a new stadium in determining success.
Loria sold the team last fall.
Now he is trying to get out of paying Miami-Dade County any money. He bought the team for about $158 million and sold it for $1.2 billion.
It's now tied up in Court ("Jeffrey Loria to county: trust my numbers on the Marlins sale. Judge: no way.," Miami Herald).
Note that this does reflect my recommendation that localities negotiate a kind of virtual interest in a team to reflect the value of monies provided for stadiums/arenas ("Stadiums and arenas as the enabling infrastructure for "money-making" platforms," 2014; "New Year's Post #3: More thinking on "return on investment" from different types of sports facilities and DC, and an Olympics in DC," 2015).
Although I think this percentage should be significantly more than 5% since without the stadium-arena as platform, there is no team.
Given the Loria machinations, I'd recommend that this ownership interest be reflected in a lien on the sale of a team, or at least that a performance bond be required, to make it more likely that the team will not renege.
In any case, governments are at the mercy of the professional leagues in terms of who owns the team and how they'll operate it.
This is significantly asymmetric in terms of what is expected by the Leagues vis a vis local governments and financing.