MLB Aware of Sherman/Jeter Plans for Fire Sale, Approved Bid Anyway

JohnWallStreet

Miami-based radio host Dan LeBatard had a contentious interview with MLB Commissioner Rob Manfred where he accused MLB of accepting the Bruce Sherman/Derek Jeter ownership group bid despite plans to immediately slash team salary (down to $90 million, from $115 million) and trade star Giancarlo Stanton (to the New York Yankees). Manfred essentially denied those allegations, saying on-air, “we don’t approve, dictate or necessarily ask clubs what they’re going to do with respect to their individual operations. Those are local decisions that really are not part of the approval process”. It now appears LeBatard’s accusations were backed by factual data; bids by Jorge Mas and Wayne Rothbaum, while not the highest, would have kept the team competitive.

Howie Long-Short: MLB accepted the Sherman/Jeter group’s $1.2 billion offer, despite knowing the group was paying estimated $400 million more than the franchise is worth; and, $200 million more than the next highest bidder was willing to pay. The group must cut payroll to show a profitable business model and to raise the $200 million they still seek to cover debt and expenses. Jeter says he’s confident revenue will increase, but that appears unlikely. Attendance will remain down with a bad product on the field and broadcast rights are locked-up through 2020. Jorge Mas, the best prospect for ownership, bid just over $1 billion for the team; the local businessman had planned to keep Stanton, maintain a $130 million payroll and hire a new manager.

Fan Marino: Jeter, who only put up $25 million, will be the team’s CEO and be paid a $5 million salary. That would make him the NFL’s highest paid front-office executive (the highest paid make just shy of $4 million/year), but in baseball Derek is going to have to build a championship winner or two to catch Theo Epstein (up to $10 million/year). Inexplicably, he’s earning as much same as 4x World Series winner Brian Cashman.

Other Marlins bidders had plans very different from Jeter’s

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